Writer, Editor, Reader, Fan Girl

Business Musings: Indie Contracts

canstockphoto16184263Boy, I’ve been seeing a lot of crappy contracts lately, and not at all from the place I would have expected. I expect bad clauses in traditional publishing contracts. Too many writers don’t hire intellectual property attorneys to vet those contracts, relying instead on agents, and that leads to all kinds of terrible book contracts. If you want to see what some of those are, look up the contract posts here  or pick up a copy of Deal Breakers 2013 (or wait for the new version).

However, the bad contracts I’ve been seeing these last few months don’t come from traditional publishers—directly, anyway. They come from indie writers and brand-new small press publishers. And these contracts aren’t just bad, they’re often worse than traditional publishing contracts.

The motives behind the contracts are different. Traditional publishers are trying to see how much they can get from ignorant writers with complicit agents. Indie writers/small press publishers are just as ignorant as those traditionally published writers, but the indie writers/small press publishers believe they’re on the side of the angels.

They’re not because they’re making huge mistakes. Here’s how:

Someone gets a great idea for an anthology. We’ll call that person Newbie Editor. In the past, Newbie Editor would have to convince an established editor to co-edit on the project or get a traditional publishing house to buy the project. Then Newbie Editor would have the funds to buy stories and put the book together, maybe keeping a few dollars for himself.

Because everything has changed in the last few years, Newbie Editor can fundraise on a great anthology idea all on his own. He might run a successful Kickstarter or use Patreon to fund the anthology. He might get a group of backers to put up money in exchange for “shares” in the project.

Whatever happens, Newbie Editor’s grand idea can became a marvelous book without years of work and without involving any traditional publishers.

A lot of great anthologies have appeared in the last few years because of this opportunity. Some great magazines have come on the scene as well. Dean and I took advantage of the changes to see if there was interest in our Fiction River project, which is still going strong, 3.5 years after our exploratory Kickstarter.

Almost everyone who crowd-funds an anthology or starts a magazine does so with the best of intentions. These newbie editors want to pay their writers well and put out fiction that wouldn’t have a home in more traditional venues.

Many of these projects have gone by the wayside because the Kickstarters got mismanaged or because publishing a magazine turned out to be a lot more expensive than Newbie Editor initially thought. For every successful project, half a dozen have gone down in flames.

Unfortunately, though, even the successful ones hit some weird bumps in the road. Some have lovely ebook editions, but most put out the ugliest paper editions I’ve ever seen. I supported one crowd-funded anthology by getting the reward with the paper copy. It arrived and was unreadable. Eight-point type, single spaced, words out to the edge of the paper—awful.

I’ve learned my lesson. I now expect things like that, because book design is an art form. Now when I support a new crowd-funded project, I only get the e-book edition. The paper editions are a complete crapshoot.

The bump in the road that I hadn’t expected were the contracts. Most of the readers who support these new projects never see the contracts between the publisher and the writer. That’s one of those arcane little details that matter only to the publisher and writer.

Unfortunately, this is an area where Newbie Editor and his publisher violate their own ideals. Usually, Newbie Editor was (once upon a time) a traditionally published writer. The publishing company is often owned by Newbie Editor.

And Newbie Editor is just like any other traditional writer: he never hired an IP attorney to vet his book contracts. He let his agent do it. Newbie Editor never negotiated his own short story contracts either, so he has no idea what the good or bad clauses are. In fact, Newbie Editor knows nothing about copyright or contracts—and it shows.

What happens is this: after Newbie Editor has found stories he loves, he offers to buy them from the writer for whatever fee was promised in the writers guidelines. Usually Newbie Editor gets this part mostly right. The email will say something like:

I’d like to buy your story for my anthology. We pay 10 cents per word for World English.

They won’t necessarily say what “World English” is—does it encompass first publication rights? First anthology rights? Non-exclusive?

But there’s enough information in that email that Short Story Writer writes back, happy that she’s made a sale.

And here’s where it gets ugly.

Newbie Editor sends a contract to Short Story Writer. Most short story writers are happy to make that sale. They sign the contract and send back without a second thought.

But people who read my blog and/or who have been my students know better than to do that. They actually read the contract.

And what they find is that the contract is a nightmare.

Most of the contracts I’m seeing from Newbie Editors and new online magazines make no sense. I mean it. They contradict themselves on every page. Sometimes they ask for things they don’t need while ignoring things they do.

The most egregious contract I saw was just a few weeks ago. Some idiot publisher/editor had changed the language in his very bad traditional book contract to be a short story contract. This ten-page short story contract (not kidding) including right of first refusal of the poor author’s next short story! And a non-compete. And all the other horrid things we’ve been discussing about traditional publishing contracts.

That contract at least made sense. I could see exactly what that idiot publisher/editor had done. She had modified an existing document by using a global search & replace, substituting the word “book” for the words “short story.” Apparently the idiot publisher/editor thought that was what she needed to buy a 3,000 word short story.

Sigh.

But most of these newbie editor/publishers take clauses at random from every contract they’ve received in their publishing careers. The contract have boilerplate traditional publishing language that refers to other parts of a contract that aren’t there. It’ll ask for North American Rights and then say that the story will be on sale around the world in all languages. It’ll claim that the contract is for non-exclusive rights, but the writer can’t sell or publish the story without the publishers permission.

And on and on and on.

In other words, these newbie editors and publishers are too damn cheap to hire an IP Attorney to develop a valid publishing contract. Just like these people were probably too cheap to hire an IP attorney when they got their own book contracts.

I’ve received some of these cobbled-together contracts myself. I’ve worked with the editor/publisher to devise a fair contract for me, although in one or two instances, I just walked away. The handwriting was on the wall that the project was going to be a disaster, and lo and behold, it always ended up being one.

The flip side of the cobbled-together indie contract is the draconian one. Some of these new companies have hired some young, cheap attorney to develop the company’s contract. Often that attorney is the friend of a friend, and not an IP attorney at all.

Those contracts don’t just want the writer’s firstborn child, they want everything the writer owns in perpetuity. They’re terrifyingly nasty, the kind of contract that makes a traditional publishing contract seem nice and cuddly.

Writers are signing these contracts because writers are mostly ignorant about legal things. And as long as the original newbie editor/publisher is in place, the writer will probably be okay. After all, the contract was born in ignorance, so it will to live in ignorance. No one will notice how horrid the clauses are. No one will ever exercise them.

But should the project become a success, and should someone with half a brain decide to buy out the editor/publisher on the project, that new someone might actually enforce the contract clauses.

One of the short stories I sold this year is heading to Hollywood because most of the writers involved in the anthology have had successful films made of their work. If this anthology (which isn’t out yet) sells to film as an anthology series (which is how it’s being marketed at the moment), you can bet that major entertainment lawyers will be vetting every word of the initial contracts, looking for advantage.

That almost never happens with short story anthologies. “Almost never” isn’t the same as “never.” Because it has happened four times in twenty-five years in my career.

And when something is in the realm of the possible, then writers need to make sure their asses are covered for that situation.

I know a lot of you reading this want to edit your own anthology or magazine. I know many of you have already set up crowd-funding on projects.

You can’t ignore the contract phase. You need to get help developing your contract from knowledgeable people. You need an IP attorney to help you write the contract, but before you do that, you need to know what you want from that contract.

If you don’t understand copyright, then you will not understand the contract that the IP attorney comes up with.

And if you don’t understand how contracts work, then you won’t understand the warranty clauses or anything else.

Let me tell you this: a contract is a single document, like a short story. A contract has a beginning, middle and end. If you write something in the front of the contract, it will have an impact on points in the middle of the contract. And the contract might make no sense without that one thing up front—which might look completely insignificant to you.

For example, when I started editing reprint anthologies last year, I looked at the contracts I received from reprint anthology editors over my entire career. In the past, I’ve only looked at those contracts from a writer’s perspective. The contracts have mostly been good, so I didn’t change much.

However, I looked at all of those contracts with a new light as I was preparing for my own editing contract. And most of those contracts lacked the same thing—any legal protection for the editor should it become clear that the reprinted story harmed a living person or libeled someone or was plagiarized. (Sometimes these things aren’t discovered with the first publication.)

Without those protections for the editor, the editor will be sued alongside the writer in a bad situation. You can bet that the traditional publishing contract between the editor and the traditional publishing house has the standard protections for the traditional publisher. But the editor in all of those instances will be left swinging in the wind.

I added the protections for me into my contracts. But I understand contracts. I’m sure I’ve missed a few things. And I left out some clauses the attorney wanted me to include because, had those clauses been in the contract, Writer Kris would never have signed on with Editor Kris.

But I understood what I wanted from that contract, and I understood how to achieve it. If I didn’t quite know how to phrase it, well, that was what the attorney was for.

Newbie editors and publishers, I know your hearts are in the right place. But you are probably harming yourself and your writers by making your contracts an afterthought.

Writers, you need to beware of the contracts when you’re working with a sincere first-timer. The contracts I’ve seen lately are nightmares. Make sure you don’t sign one.

Negotiate it. Or walk away.

Yeah, yeah, I know. Why am I getting my undies in a bundle for a single short story? Because sometimes a short story is what a writer becomes known for. Think Flannery O’Conner’s “A Good Man is Hard To Find” or Charles Dickens’ “A Christmas Carol.”

If your classic tale has a contract that gives ownership of the story to your publisher—whoever that might be—then you’ll get no money for the decades of reprints, the movie deals, or the gaming rights.

The worst thing you can do is assume that something like that won’t happen to you. It’s just one short story, right?

Right—and it might be your entire career.

This blog has to remain financially self-sustaining. That’s why I include a donate button at the end of every business post, but I don’t do so on the fiction posts.

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“Business Musings: Indie Contracts,” copyright © 2016 by Kristine Kathryn Rusch. Image at the top of the blog copyright © 2016 by Canstock Photo/Elisanth.




22 Comments

  1. January 30, 2016    

    I began my own publishing company in 2010 to publish my work. Then I started getting requests from other authors to publish their work. So I did. All contracts I create are contracts I’d sign if I was accepted by a publisher. I’ve been dealing with contracts since my first column gig in 2000, so I’ve seen a lot of bad deals out there, ones I’ve turned down.

    My goal with my publishing company is not to make money off other writers but to treat them fairly and get their work out there. I want to make money off my books, and by having other books on the shelf, mine get more attention. With books I publish by other authors, I want to cover the costs, not make a profit.

    There are several good points brought up in this post and in the comments. I’m taking notes and seeing if they fit into my contracts. Ideally, I’d like to protect myself from damage by books by others.

    Thank you for the informative post.

  2. January 29, 2016    

    I’m an indie author. I was going to publish an anthology with stories from other authors. But now I think I’ll just write all the stories myself and create pen names. Will save agro.

  3. January 29, 2016    

    I actually did a series of posts on my site deconstructing a HORRIBLE indie publisher contract that they’d literally taken verbatim from a Maine university’s website (I found the original) and added a couple of horrible clauses into it. (Fortunately that publisher is no longer in business.) But what’s stupider is EPIC even has a sample contract on their site. It covers a wide variety of possibilities, so you can at least see what’s needed, what isn’t. The publisher I’m with now, their contract has evolved in the 90+ titles I’ve signed with then, but their early version was very similar in many ways to the EPIC base contract, and it was a solid, reasonable contract. They didn’t ask for rights they’d never use. (We even had to do a separate rider to cover audiobooks later on when they added that.) They didn’t ask for right of first refusal except for related books in a series (which is fair). No restrictions on writing elsewhere with the same pen name (unless you do what I do and go exclusive for a set time period). Their contracts are strictly TIME-based, NOT threshold. The royalty payment rate stipulations are SIMPLE and they define what is net. They clearly specify EXACTLY (by dates) when quarterly royalties and statements will be issued. There is no dicking around with semantics. There is no ambiguity.

    Oh, and here’s another shocker (sarcasm) unlike some cough famous ongoing publisher implosions that have made the rounds lately, my publisher pays ON time, EVERY time, and exactly what I’m expecting it to be. They have an online back-end system where authors can check, real-time, their on-site sales through the publisher’s site. (We can’t see our third-party sales, of course, but guesstimating by my book rankings, my payments have always been about what I expected them to be for that.)

    Early on, a couple of books in, they’d added a clause I wasn’t sure about simply because it was a little ambiguous. I asked them about it, they said oh, you’re right (it was about characters and the author owning the right to the actual characters) and they clarified it. Very professional, no snottiness. ANY time I ever had a contract question in the beginning (or since, although I rarely have one now LOL) they were always willing to talk to me about it and make sure I understood it, or make revisions if they agreed it needed clarification.

    The sadder thing is that earlier contract I mentioned from the other now-defunct publisher? Early on I made waves about it in an authors’ group where some of the publisher’s friends were, and I challenged, openly, some of the clauses. (Like charging for editing, insisting on adding the publishers name as a “mentor” co-author, life of copyright term, no clear specification about WHEN royalty payments and statements would be issued, NO audit clauses, etc. and said hold your horses, those are HUGE red flags. (Oh, and they had their jurisdiction set up to be applicable to the laws of one state, but adjudicated in MAINE, because they forgot to change that part, so DUH.) And I was basically told I was jealous, etc. and they didn’t want to hear my valid points because it was their FRIEND and they TRUSTED THEM.

    Uh, okay, go for it, sunshine.

    Didn’t take long for the problems to start cropping up. Especially when their royalty system was so convoluted it made zero sense and the authors were starting to realize they were getting screwed. (I heard it boiled over finally when some anthology authors actually compared notes and the dumbass publisher had listed different sales numbers for each author. Uh, DUH.)

    So when I look at a publishing contract for someone (with the extreme caveat that I am NOT an attorney and am NOT qualified to give legal advice) I can usually immediately spot red flags, or at the very least I can explain what certain clauses mean. There are “normal” attorneys who don’t practice publishing law who can’t tell a “good” publishing contract from a “bad” one because they don’t know the business. That is why it’s IMPERATIVE for an author to get legal advice before signing a contract.

    No matter what you do, please, please, PLEASE never sign a contract if you don’t know anything about publishing contracts without going over it with a fine-toothed comb and asking for help. Print it out and LOOK at it, read it, highlight it, etc.

    To this day, even though I trust my publisher, I STILL read through EVERY contract, EVERY clause, even if I know that all that’s changed is the title and dates from the last one I signed. Why? Because it’s a BUSINESS and that’s SMART business practice.

    In this day and age, there is NO excuse for any writer to get taken in by desperation to sign a contract. Not when you literally can sign up for a KDP and CreateSpace account and publish your book. NO writer should be so “desperate” for a “publishing contract” that they sign away rights. Those days are OVER.

    *Make sure the contract has a firmly set expiration date. (NOT life of copyright.)
    *Make SURE the copyright remains with YOU, NOT with the publisher.
    *Make SURE the royalty payment periods are CLEARLY and DEFINITIVELY stated. (ie Quarterly, by the 30th of the following month, with end of quarter being December 31, March 31, June 30, September 30, or something similar, a FIRM payment schedule).
    *Make SURE there are audit clauses.
    *Make SURE that royalty terms are spelled out clearly, and exactly (ie if they say “net” they define EXACTLY what net means, with no ambiguous “minus expenses” or some other crap in there). If you need an accounting degree to figure it out, don’t sign it. That used to be standard, but in today’s age, a flat-percentage based on where the book is sold and in which format is very common. And make sure the price is specified if royalty is based on “selling price” or “list price” or “cover price” depending on the format.
    *Don’t pay for editing. If you’re signing with a publisher, that’s THEIR burden, NOT yours.
    *Ditto covers.
    *The ONLY time I’ll agree it’s okay for an author to pay out money to a publisher is 1) to buy print copies (but NOT forced to do so) meaning they want to buy some for their own use at a discounted cost — again, NEVER forced to do so, or 2) if there is co-op advertising, AND it must be optional, AND it must be stipulated in advance that the author can choose to participate or not and exactly what the costs will be IN ADVANCE before they agree to it. No nebulous garbage that can be milked from an author.
    *I am strongly against threshold contracts in this day and age. I strongly urge authors to ask for changes to date-based because as with again, another public publisher bruhaha going on now, it can be played against the author.
    *Make sure there are remediation clauses in there about what can happen if either party breaches the contract.
    *Make sure there are no non-compete clauses or unreasonable first-refusal clauses. (Right of first refusal on the next book in a series or a related character or the same fictional “world”? Reasonable. Right of next refusal on ANY books you write, or any books of the same genre? NOT reasonable.)

    Those are just off the top of my head and the problems I see crop up most often, and the ones that make me want to smack an author for signing. LOL

  4. Teri Babcock Teri Babcock
    January 29, 2016    

    About a year and a half go I saw an indie anthology that, for 5 cents a word, wanted first world English rights for 5 years and permanent rights to all audio, movies, and video games. It was a very deliberate rights grab by people who were hedging their bets in case a lucky one or two of those stories turned out to have legs.

    But what occurs to me about these other, naive new editor/trad-writer contracts is: why does the short fiction editor have no short fiction contracts from their time as a short-fiction writer they can use as a template? If all the new editor/writer has on hand is a novel contract, that tells me they haven’t been actively writing and submitting short fiction for some time, if ever. And so I wonder why a person who doesn’t even write short stories feels entitled to edit them.

  5. January 29, 2016    

    This all reminds me of Bridge. In bridge, there’s the trick game, the scoring game, and the bidding game. They each impact each other. However, you can’t just “explain” the rules and understand the Bridge because each part of the game impacts the understanding of the game. There are so many possible moves with every hand that reaching any understanding of “good” and “bad” takes a huge amount of learning, and an accurate understanding of every other aspect of the game.

    I see publishing having the writing game (writing a sellable book), the publishing game (finding a publisher or self-publishing), the contract game (actually understanding what’s in the contract and knowing what to ask for), the marketing game (selling the book), the financial game (running a profitable business), the social game (how to interact with everyone and get things done to your benefit), and the IP game (all about what you’re licensing.)

    I must be learning something. I see how much more I don’t know all the time.

  6. January 29, 2016    

    Flowers for Algernon. So many short stories are perfect – and then get turned into something longer. Maybe back then it was the only contract a writer could get. Now, there’s no excuse.

    The veterans should self-publish a book of their own stories – and split the revenue. Those stories are so personal, I’m not sure they should ever be published by anyone except the writers.

  7. A.Beth A.Beth
    January 28, 2016    

    nod I wound up doing a lot of stuff on a small-press anthology contract, including adding in permission for assistive technology in the form of reading it (i.e., that I didn’t call that “audio rights,” because I figure a computer won’t do as good a job as a person), and some other stuff about making sure that the story could ONLY be reprinted as part of that anthology (no breaking-apart and selling the story individually! Only I get to do that!).

    I’m sure it’s got a lot of stuff that is still not-so-good, but it’s better than when I got it. And they were pretty happy for me to work with them!

  8. January 28, 2016    

    Thank you for the timely reminder. Though I’ve had a lawyer who’s a friend look over many of my contracts, I’ve never had an IP lawyer look at them. I am correcting that immediately. Though I don’t believe any of my contracts have anything egregious in them, I want to make sure. Thank you.

  9. January 28, 2016    

    Just last week, I saw exactly one of these cut-and-paste publishing agreements, and it was such a train wreck I walked straight away. A shame–I personally know and like several of the people involved, and the project sounded like a lot of fun, but, as I’ve been reminded vividly due to other events recently, these people will not be forever in control of this contract (nobody signing a contract today outlives “length of copyright”, by definition)–and if they die without a proper will, they might not even get a say in who does wind up controlling it.

    Oh well. At least it gave me an excuse to resurrect my blog series about bad contracts, and revisit some old-as-the-hills scams that a lot of new contracts seem to be setting people up for.

  10. davidelang davidelang
    January 28, 2016    

    I suspect that one problem is that most people have never seen a good contract to use as an example.

    Are there any publicly available that you would point to as examples of a good/reasonable contract to start from (or would you be willing to publish your own templates). Even with the “validate this with your own IP attorney”, it is still good to have a solid starting point and/or example to point at when arguing a point.

    • January 28, 2016    

      Interesting idea, David. I’m not an attorney, so I’m not comfortable doing that. But you got me thinking of a new project…(casts a wary eye at Kickstarter…)

      • davidelang davidelang
        January 29, 2016    

        This is what the Author’s Guild should be doing

      • January 29, 2016    

        I’d back that. I think it would be really helpful to have some base templates/examples of good contracts available with disclaimers to modify for individual situation and state laws. NOLO does good disclaimers on their templates.

        This is the sort of thing I’d expect Authors Guild, SFWA, RWA, etc. to have available for their members. With notes for editors and authors on the pros and cons of each clause and the need for balance.

        Possibly something similar for small presses with additional pros and cons to the various clauses from their perspective.

        This might be bigger than initially proposed.

    • January 28, 2016    

      The german writer’s union VS has some template contracts to download on their website.
      https://vs.verdi.de/recht-urheber/mustervertraege
      These contracts are held as industry standard here – though I don’t know whether and how intense they get modified.
      They are not in English of course but some german speaking lawyer among Kris’ readership or friends could read them as a starting point for an english version (assuming great similarities among the nations’ laws in this regard).

    • January 31, 2016    

      EPIC has info on sample contracts and red flags:

      http://epicorg.com/resources.html

    • February 3, 2016    

      Someone earlier mentioned the EPIC boilerplate, which was, in fact, drawn up in the mid-nineties because people were horrified by the terms in most traditional contracts. It’s available at http://epicorg.com/resources/9-model-contract.html

  11. January 28, 2016    

    Not trying to be an echo chamber, but be prepared to WALK AWAY from these bizarro contracts. I had a company in the U.K. want what I think was reprint rights for a short story. I never could get a straight answer out of them other than they weren’t going to pay me even thought they were putting out a hardcover edition. Not even a courtesy copy of the hardcover. smh

  12. January 28, 2016    

    Back in the day, I did a lot of temping with lawyers of various stripes from personal injury to big business attorneys, which meant I did a lot of typing up of contracts and legalese. All of these documents were reread multiple times by different people because, as my last boss said, a misplaced comma could change the entire meaning of a clause, which could in turn change the entire contract, and a good lawyer could easily take advantage of that mistake. I’m pretty sure he wasn’t exaggerating. Even if he was I took the point to heart. I’ve always been careful about my contracts but working for lawyers really put me on guard about what could go wrong. Thanks for reminding all of us not to get complacent about these things! And to remember legal documents have weight and can carry some pretty serious implications for our careers, no matter what side of the contract we’re on.

    • January 29, 2016    

      The Law 101 class I took as well as working for attorneys for a year have made me obsessive about reading and insisting on changing many contracts before I sign. I’ve always been prepared to walk away. It’s my life/work I’m signing away. I take that very seriously.

  13. January 28, 2016    

    I often wondered how those anthologies worked. Thanks for giving an insight into this. If I ever have the chance to be in one, I will be aware.

  14. January 28, 2016    

    Even only when reading the guidelines, it’s important to know what should be there and what shouldn’t. I’m a veteran, and there are a lot of calls for stories from veterans. I pass on all of them now because none of them pay anything, and the majority don’t appear to know what they’re doing. Most seem to be along the line of doing the veteran a “favor,” to help them get their stories out there, which is an automatic flag. Usually that tends to me they have no publishing experience whatsoever. But they’ll leave off things like rights, and that makes me wonder if they’ve even thought about a contract …

    But we had a call posted for a literary magazine looking for fiction. It was a legitimate call with what I typically see in the guidelines for magazines that I do submit to. It was non-paying, so I wasn’t going to submit. But one of the writer veterans had a meltdown over it, calling it scam because it listed the what rights they wanted. Then she started on about how she registers everything for copyright right away to make sure no one stole it, like it was a magic spell to protect her story. Her ranting made it look like the magazine wasn’t legitimate when it was (note: for veterans’ stories, non-paying is the ONLY option. I have never seen a paying call).

    So it’s important to know what’s going to raise flags from reading the guidelines–not what they put in, but also what gets left out. Reading lots of different guidelines, starting with pro markets is a good way to at least start learning what’s okay and what should be passed on.

  15. January 28, 2016    

    I don’t recall if you made a post out of it, I remember the subject’s come up.

    “But indies can do no wrong!” Add amazon to the cry, sometimes. Publisher A does it, and it’s an obvious example of the hubris in NY Publishing. A Kickstarter project (or a small house or…) does it and it’s only prudent self-protection.

    Sigh.

    Take care.

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