Is a “No-Haggle” Contract Always the Best Thing?

During this past year I learned a new career lesson. A contract in hand does not always equal a sale.

Huh? You say.

Let me first clarify a couple of things. I’m not a lawyer and have no legal background, so think of this article as an “opinion piece,” something designed to make you think before you sign but not to give you definite answers.

Second, my experience with contracts thus far has been with electronic publishers. This process is a bit different when dealing with a NY publisher, from what I hear. I’m dreaming of the day I get to experience that other process first hand.

So when is a contract not necessarily a good thing? The simple answer: when the terms are not acceptable and the publisher isn’t willing to negotiate.

If your dream publisher hands you a contract that takes all of your rights for the life of the copyright with a clause asking for first look on anything you write next, you may jump at the chance to sign. But if it’s not your dream publisher, then what?

Then it’s time to negotiate…if you can…and determine your deal breakers…if you can’t.

Keep in mind–if one publisher wants your book, it’s very likely another publisher will want it too. I know it’s tempting to stick with “the bird in the hand,” but how happy will you be with that “bird” when you’re locked into an unpleasant contract?

So what do I consider “unpleasant” contract terms? Life of copyright is a big one. This means the publisher will hold the rights to your book for your lifetime plus seventy years.

That’s a long time–think about it.

No big deal, you say.

I recently heard a talk by a best selling author who was trying to retrieve rights to her earlier work so that she could reprint the work in an anthology with the rest of the series. The publisher refused to relinquish the rights. I’m just guessing, but she could probably make a lot more money on a new anthology than she makes with the continuing royalties from the original publications. I could be wrong, but I’m sure that’s something she thinks about.

When you’re unpublished, any contract seems like manna from heaven, but picture yourself down the road. What parts of the contract could impact your future career?

The second part of the contract that I look at is what rights the publisher is asking for. If they publish primarily electronic and POD (print-on-demand) books, do they really need my television and movie rights, mass market, audio, and foreign rights? What do they plan to do with them? Could I (or my future agent) do something more with those rights?

That wasn’t a huge sticking point for me, but then maybe I’m not imagining the big picture.

My biggest sticking point was the all-encompassing option clause, the thing that says this publisher gets to look at the next thing I write no matter what it is. Okay, I exaggerate. They get to look at anything I write from 10,000 to 100,000 words that is either erotic, erotic romance, or romance–this is pretty much anything I write.

Option clauses ideally should be as narrow as possible. For example, they option the next book in the series–well, it makes sense that they’d want to continue to publish the series and not have you split it up and send it elsewhere. Or one publisher may say anything paranormal over 50,000 words, while another publisher may say any historical over 50K. This still gives you the freedom to sell short stories or novellas to anyone you please, and keeps your first publisher from claiming you violated your contract when you sold to the second one.

I’ve heard that there are ways around even the broadest option clauses, but ask yourself, do you want your publisher to sue you for breach of contract? I’m just saying…

There were two phrases thrown around during my recent experiences that really irked me. “Industry standard.” Just because it’s an “industry standard” doesn’t make it right for me. And is it fair to use the same contract terms as NY publishers if you’re only guaranteeing electronic publication? To me, that’s not “industry standard.” Industry standard, to my way of thinking, is a print run with national distribution in brick and mortar stores. But maybe I’m projecting…that’s my ultimate goal, so when I look at a publisher contract, that’s the prize I keep my eye on.

Another phrase was “good faith.” I don’t know if this is a true legal term or not, but the gist of this was that if I accept the first contract as is, in “good faith” I accept the next contract will be the same. This implies that I can’t negotiate for a better second contract if I accept the first. This strikes me as a Catch-22 if the publisher won’t negotiate on the first contract.

Option clauses contain more than one component. The first part is what they want the “right of first refusal” on (explained above). The second part is how long they have to look at the option book and make a decision. You want a definite time period, so that you can move that book to another publisher as soon as possible if they turn it down. Last, there may be a phrase saying you can only turn down their offer and accept another IF the other offer is financially better.

Let me just say, there may be many reasons for changing publishers, and royalty rates and advances may not be your primary focus. Time to publication, the amount of promotion they put behind you, quality of editing, covers, etc. just to give you a taste. In the case of e-publishing, you may want to switch publishers if one is more likely to put your book in print and distribute it through Ingrams (which doesn’t necessarily increase your bottom line)

But this part of the clause is saying you CAN’T accept another offer unless it’s better financially. And which is better: 40% royalties with no advance or 8% royalties with a $1000 advance? When I was facing such a clause, I was very confused by this. And what if the second publisher will ultimately reap more sales for my book, but offers a lower advance to start? Which is considered the better financial deal in terms of the contract?

In the end, after much angst, I turned down TWO “No-Haggle” contracts, but I was offered two more contracts for the same book and am very happy with the one I chose.

And that’s the key word: CHOSE. Remember that you have a choice. I remember the excitement of that first sale. Going through so many rejections, revisions, more rejections, and thinking the poor book was going to end up under my bed. When I got that first contract, I was ecstatic, so I know what compels an author to say “yes” to anything. (By the way, my first contract was awesome!) My purpose here is to get you to pause and consider your future goals: will this contract trip them up?

Did I make the right choice? Did I throw away a golden opportunity (or two)? I don’t know, but ultimately it was a decision I had to make for myself and not let any publisher make for me.

Originally published in Novel Ideas, the newsletter of the Virginia Romance Writers, March 2007

Bio: Look for Shara Lanel’s books at Loose Id, Liquid Silver Books, and New Concepts publishing. Visit her on the web at www.sharalanel.com, where you’ll find an excerpt from her latest release, SECRETS & SPIES.