Business Musings: An Example of Writerly Cluelessness (Negotiation/Contracts)

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The universe keeps giving me excellent examples of things I try to teach on this blog. When I wrote a recent post titled “Knowing What You Want,”  that example was one of the first positive examples I had found on how to negotiate.

Today’s post does not contain a positive example, I’m afraid. It’s an example of something I stress over and over again, but writers never see the downside of it—the problems with a verbal agreement.

A large number of you sent me a link to this article in The Sydney Morning Herald, in Australia.  Selwa Anthony, a literary agent, is suing international bestselling writer Kate Morton for breach of contract.

Most of you sent me this as a case of agents behaving badly. And yeah, there’s probably a lot of that here. Those examples are easy to find, I’m sorry to say. I can find dozens of them, although few of them as extreme as the one from the spring concerning Donadio & Olson.

The rest of you sent me the article because the writer was beyond clueless about the business of writing. I mean, seriously. She admitted in open court she had no idea that an advance was an advance against royalties and that the book could earn a lot more money over and above the advance. The level of her cluelessness about business shouldn’t shock me, but it does. It really does.

Finding examples of writerly cluelessness is pretty easy too (although, as I said, not to this extreme, usually). What I saw in this article isn’t the agent behaving badly or even the extreme naivete of the author.

What I saw was the danger of agreeing to anything verbally.

When I teach writers how to negotiate, I tell them over and over and over again not to negotiate on the phone. I tell them to conduct all of their business by email. I also advise them to have a contract with whomever they’re doing business with, even if they have to write a short minimal contract themselves.

Writers don’t listen to me, most of the time. Even if I can convince them not to talk to someone about film and TV rights on the phone, the same writer will turn around and negotiate audio rights on the phone. Or will have a “phone meeting” with terms to be negotiated later.

The problem is that once you have that phone conversation, you’ve moved into a he said/she said situation. (Or in this case, a she said/she said situation.) According to The Sydney Evening Herald, Kate Morton says there was no phone call in 2002 that stipulated the terms of her relationship with Selwa Anthony. Selwa Anthony says there was indeed one of those conversations.

If Anthony did not take concurrent notes of the conversation or reference it in email later, then there is no proof that the conversation ever took place.

If she did take notes or mention the call in a later email, then she has legal upperhand.

It’s pretty easy to lie about what happened in a phone call. One party could say that the other party agreed to all kinds of terms. The other party could say that the phone call was about where to have lunch on the following Monday.

Without a document that backs up what occurred in the phone call, then the solution comes down to whoever is the most believable in court.

I don’t take phone calls from anyone I’m about to do business with. I take phone calls with a handful of people that I’m doing business with after we have a written agreement in place.

If we end up having a phone call, I take concurrent notes while I’m on the phone. When I hang up, I email that person immediately, saying it was great to talk and great to learn (or agree to) whatever the heck it was that we discussed.

Then I print up that email and save the printed version with my notes. I also keep the digital copy of the email in a folder on my computer and in my email program.

Why do I print? Because, my friends, I have gone through so many iterations of email programs and webservers and technology that I have learned that a digital file is not permanent. For example, this Morton case dates from 2002.

If I had to reference an email from 2002, that’s six generations of computers ago. The email program I was using at the time was Outlook (and a 2001 version at that). The email address I used no longer exists because the company went out of business.

However, the paper copy of any important email from that year is in my (admittedly messy) paper filing system. With a few hours and a bit of patience, I can find that email. If the email has to do with legal agreements or has to do with any negotiation, I could find it even faster, because my paper system is less messy when it comes to contracts, deals, negotiations, and subsidiary rights approaches.

Who do I believe in the case of Selwa Anthony and Kate Morton? Honestly, I believe the agent. I think the phone call happened. I think Anthony told Morton the details of their relationship.

I think Morton didn’t understand a word of that conversation and did what most people do when they don’t understand something: she forgot about it because to her, it wasn’t important.

I have no idea how the court will resolve any of this, and frankly that’s between the two of them.

But for you writers out there—including you indies who will do a lot of negotiation (even with lawyers as your back-ups)—learn from this.

Here’s what you need to learn:

  1. Understand the business of writing
  2. Learn copyright, because that’s what you license. (If you don’t know this, buy the current version of The Copyright Handbook and read it, reread it, and then read it again until you understand all of it.)
  3. Never talk to someone you want to do business with over the phone. Have your preliminary conversations in email (not texts. Email).
  4. Hire an attorney to help you with contracts, even if you only hire that attorney for one hour to explain to you what a contract says. Let the attorney backstop you—meaning you do the nitty gritty of the negotiation, with the attorney providing advice.
  5. Do not hire an agent. Ever.
  6. Once you have a legal agreement in place with the people you’re doing business with, then you can talk to them on the phone if you make concurrent notes for each phone call, and if you then email the person afterward to make sure that you have a written record of everything you discussed.
  7. Print all your emails. Have digital back-ups as well.
  8. Trust but verify. If someone tells you that they work for a big production company, use IMDBPRO (and Google) to see that’s true. If they want to handle your finances, say no. If you are going to partner with them on something, check their references, including their financial references.
  9. Never agree to anything verbally even if you’re been doing business with this person for decades. Have a contract or at least a paper trail to show what you’ve agreed to.
  10. Prepare for the worst. Sometimes the worst is what happened to Kate Morton. She made 17.3 million dollars, most of which she never expected to earn. That’s creating all kinds of problems for her, problems she clearly never thought of. So, sometimes, my friends, success is the worst thing that can happen to you—at least in your relationship with the people you do business with.
  11. Make sure your agreements with other parties include provisions for success and failure.
  12. Make sure the agreements are easy to sever.

And finally….

  1. Make sure you understand the business of writing.

As I said for years, the writers whose careers end badly are always writers who don’t understand business. Make sure you’re not one of them.

Writing this blog helps me stay abreast of what’s going on in the business. You folks help me with that more than I can say. Thank you for the forwards, the links, the comments, and the shares. I greatly appreciate all of it. Please assume I haven’t seen some major article, and send it along. I would rather get five versions of the same link than none at all.

That’s just one way you readers support this blog. Some of you can afford to support it financially—and you often cover for those who can’t afford financial support. Thank you so much for that!

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Which I am going to say right now. Thank you!

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“Business Musings: An Example of Writerly Cluelessness,” copyright © 2018 by Kristine Kathryn Rusch. Image at the top of the blog copyright © Can Stock Photo/Arsgera.


18 thoughts on “Business Musings: An Example of Writerly Cluelessness (Negotiation/Contracts)

  1. As mentioned in my reply to RRHersch, above, the judgement was brought down yesterday. The court dismissed Selwa Anthony’s claim and partially upheld Kate Morton’s.
    Here’s the summary. The full judgement is also publically available.

  2. Thanks for this essay and for the link to the article about the tsimmes in Australia. It’s a good reminder that “negotiations” aren’t merely about the rosy future when a studio exec comes calling with a movie deal. They start now, with contracts with editors, cover artists, formatters, and even agents if we feel we simply must have them. It’s so easy with these people to believe we’re going to hurt their feelings or insult them if we insist on doing everything in writing.

    I think the solution comes down to being winsome, but firm. And remembering we’re not out to make a new best friend, but doing business for the sake of our writing.

  3. Little aside re English culture rather than law… Years ago, I sat in as a passive observer (on call as a technical expert) in a negotiation between American and British software folk who had an ongoing business association. Early on, one of the American team members pitched a point that no one replied to from the other side. The Americans moved swiftly on to their next proposal.

    The way I read it: the Americans were laughing inwardly, amazed that they’d been able to sneak in that particular demand, while the Brits thought it was so obviously stupid that it would have been socially embarrassing to bring it out into the open. Silence meant that they intended to ignore it so it would simply drift away, like an awkward moment between friends that they’d rather just forget.

    But that was simply my perception during the moment. No idea how it panned out.

  4. There is nothing wrong with negotiating on the phone. Lawyer-to-lawyer phone discussions occur all the time. The mistake is treating the phone call as a contract. No, it is a negotiation, perhaps reaching an agreement, about what will go into the contract. And yes, those lawyer-calls are followed up with an email or letter: “…our telephone conversation of this date in which we discussed… and agreed to…” The implied corollary is that if the other party has a different understanding of the conversation, we need to try again. And really, the process should conclude with a paper contract with signatures. How you get to that conclusion depends on what works best for you.

    The part that strikes me as odd is that they never did a written contract. We need not read too far between the lines of the author’s stated disbelief in contracts to suspect that the agent pushed a written contract and the author refused. The telephone conversation was the agent’s attempt to bring some sense to this. She should have followed it up with that letter stating her understanding of the conversation. I assume she didn’t send such a letter, or that would have come out in court. But she’s not a lawyer and this would be an unusual situation for her. I can’t blame her for not thinking of sending that letter.

    Which brings us to the “agents behaving badly” meme. I know that all the kids are into that nowadays, but where did she behave badly? She took an unknown author with an unpublishable manuscript and encouraged her. When a publishable manuscript finally was written, the agent not only got a book deal, but multiple international deals. This isn’t an agent behaving badly. This is an agent doing her job, and doing it well. It may be that nowadays, in the era of viable self-publishing, a writer would do better on her own, but in the context of 2005, this agent was every writer’s dream.

    To be blunt, I think that when the royalties grew into the millions the writer got greedy. It dawned on her that 15% of a big pile of money is itself a substantial pile, and the writer wanted it for herself.

    1. It’s best to advise people not to have a phone conversation. That way, they’ll never get in a he-said/she-said situation. But as I said below, if you have a phone negotiation, send a follow-up in email and on paper, so that you have a record. I’ll have a future blog on how phone conversations get misused all the time in literary and film/TV negotiations.

      On the other matter, I think you confused the names. The agent is the one who said she doesn’t believe in contracts, which is odd, since the author hired her to negotiate contracts. That said, the agent is probably in the right here: I suspect she did have a phone conversation.

      However, you and I greatly part ways on the 15%. I believe no one deserves 15% for the life of the project, particularly for completing a sale and negotiating a contract. That’s ridiculous. An author can get her own sales if she’s smart and diligent, and she can hire an attorney for a flat fee to negotiate the contract for her.

      Also, as you said, the agent is not a lawyer, and if she can’t think of something as basic as following up a conversation on a business matter with a letter confirming the terms, then do you really want her negotiating a legal contract for you? Seriously? That’s not a defense at all. A lawyer has training for that, a license for that, and in the States, at least, an organization that will disbar them if they behave badly.

      1. You are right. i got the two mixed up. Now my mind is boggling? The agent doesn’t want a (written) contract with her clients? That would send me running for the hills. And of course she did have a contract: just a verbal one. Yes, there is the old joke about a verbal contract being worth the paper it is printed on, but a verbal contract is still a contract. The problem is with establishing its terms.

        That being said, it looks like she nonetheless performed the expected job of a literary agent and got those deals. Could the writer have gotten similar deals without an agent? i doubt it. The pragmatic analysis of what the agent’s rate should be is whether the writer could get similar service more cheaply, or could act on her own and come out ahead.

    2. Selwa Anthony does not write contracts between herself and the authors she represents, and her time in the business dates way back before emails or the internet. If she agrees to represent an author, she does now follow up with an email, but the contract clause regarding her agency T&C is embedded into the contract between the author and the publisher. She does a lot of work with promising authors in the hope their work will get to publishable standard, but earns her nothing if that doesn’t happen. In fact, Kate Morton’s first two unpublished manuscripts were a case in point. Morton’s relationship with Anthony pre-dates her first successful novel, The Shifting Fog (given another title in UK).

      Australia is a tiny market. 10,000 copies is a best seller. It’s almost impossible to be traditionally published without representation. There are many press articles where Morton waxes lyrical about her wonderful agent. Your final paragraph hits the nail on the head, in my opinion.

      Having said all that, the judgement was brought down yesterday. The court dismissed Selwa Anthony’s claim and partially upheld Kate Morton’s. Whether Anthony will change her future business practice in light of this, remains to be seen.

  5. Good point about texts. I’ve been negotiating a deal in an entirely separate field, and my counterpart kept texting me business terms. Or we called. I had to rewrite everything in emails. He’s younger, I think. However, people think just because they have your number they can start texting business, and declining that avenue politely is becoming increasingly harder.

    1. Declining has always been hard, and it’s very hard with Hollywood types. But just say no. And no. And no. If they want to negotiate with you, they must do it your way. Be unavailable. I don’t give out my phone number until the negotiations are over. That works very well. I do give them a snail mail address, so if they can’t reach me by email, they have another way to reach me. But they don’t get my precious phone number until we’re done.

  6. Great article, Kris! I had read your tweet a few weeks back and knew that you would someday talk about this issue. Personally, I think the agent’s case is very weak in this case. 15% commission for the lifetime of the copyright is so crucial that it’s there in most written agent agreements as you told us.

    But a phone conversation??? Ms. Anthony may better have some proof to back it up either with a recorded conversation (that would be the best) or as you said a reference in a later email. And even then, just writing “It was great to speak to you on phone on such and such date” won’t do. Unless Ms. Anthony also listed the terms of the agreement in that email and Ms. Morton specifically said yes to all of them (which doesn’t seem like it happened because otherwise Ms. Anthony would be relying on that email than on the phone conversation). If Ms. Morton didn’t reply to the email, then it cannot be considered that Ms. Morton agreed to the terms. Because silence (in English law) is not considered acceptance. I studied law from England and what I know is that Australian law is very similar to English law and any ambiguity in contracts will be interpreted against the party relying on it.

    Since Ms. Anthony is claiming that that phone conversation was part of the contract, she better have some solid proof to back it up. Or else, the courts will rule against her.

    By the way, Ms. Morton too is asking for a refund of $2.8 million from the agent. If she audited her agent, then probably the agent is in deep trouble.

    But yes, I completely agree with you. Negotiating on phone is a terrible idea. Would like to hear from you.

    1. Great to know about English law. One of the many, many reasons I tell people not to negotiation on the phone, besides the whole clarity thing, is because laws differ from region to region. In the U.S., the laws differ from state to state. In California, for example, some oral agreements are valid. (Not all, but some.) And how do you prove that you didn’t respond or didn’t understand in a conversation that happened 16 years ago? You can’t.

      And like you, I would love to see what the audit will say. Here, the lawyers for Ms. Morton might ask for the accounting anyway. All good stuff.

      1. More about phone conversations. My husband (a US lawyer practicing in Pennsylvania) sometimes gets those calls that begin with “Our conversation is being recorded for quality control purposes.” He always declines them, saying he won’t speak on a recorded line. If they want him, they can give him an email contact and he can get back.
        HOWEVER – our refrigerator has been broken for almost 2 month, and we’ve been living from a hotel-type unit and a deep freeze all this time. We’ve been doing email chats (which can be printed out) with Sears Home Appliance Service. Finally, at the end of our collective rope, we called. The (unproductive) conversation had been recorded. And no, they will not release the transcript. Not without a subpoena.
        Sigh. I really do have better things to do than suing over a fridge. But those recorded calls? You’re better off with a printable chat every single time.
        (Plot point: it gave me story ideas 😉

        1. In most states, you can also record the call yourself (I’m not a lawyer, so check your own location’s laws on the subject), so when the other side says they’re recording the call for whatever purpose, you can also state that you’re recording the call. The equipment or app to do that shouldn’t cost very much, and that will give you your own copy.

          1. The equipment is really cheap, just search for “phone recorders.” Reporters use them all the time. My phone recorder uses micro-cassette tapes, which I think are still around. Google “cassette,” young people 🙂 In the landline days I plugged it directly into the phone receiver. Later I got an adapter to plug into the cellphone. There’s likely a digital version these days, but I wonder if a cassette might be the way to go, in case there are questions about whether the audio was altered. I agree on checking with a lawyer about which options will actually protect you.

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