Five Contract Terms Every Writer Should Know

April 22, 2014

http://www.dreamstime.com/stock-photo-vintage-leather-briefcase-image24803840Your words are your creation, your identity, and your currency, and scam artists will try to steal them from you. They’ll hand you a contract and claim “it’s standard. Everyone signs it.”

Don’t believe them. Every contract is negotiable, especially when you know what to negotiate. Here are some basics terms to help you understand contracts.

1.   License. A license is a right to use only; you, the creator, retain actual ownership of the copyrighted work.  99% of the time, a writer will be granting a license (not an assignment).

A license is similar to a lease. Suppose you are a landlord, and you lease portions of your property to various tenants. You still own the building. Some apartments may be exclusive to one tenant, while other portions, such as the lobby, may be used by all tenants and are non-exclusive.

Licenses may be exclusive or non-exclusive, world-wide or geographically-restricted, short-term or perpetual, royalty-free or royalty-paying, limited to particular format such as audio books, print, e-books or language; the permutations are endless.

But you will only know what you are granting if you read the contract.  Carefully.

2.  Exclusive. If you grant an exclusive license to a publisher, then that publisher has the right to stop everyone else from using your work, even you.

Never grant an exclusive license without understanding exactly what you are doing. Never grant an exclusive license to someone who cannot exploit your work for your benefit. Never.

I have seen online contracts with self-publishing service companies in which the writer grants the company an exclusive license in every format for the life of the copyright. Even the author cannot use her own work. These aggressive clauses are buried deep in the document. Search them out. If you see one, do not agree.

3.  Assignment. When you transfer actual ownership of a creation, that transfer is called an assignment. An assignment is forever (with few exceptions), so do not use the word casually. While a license may be terminated if the licensee fails to pay royalties or exceeds its rights, an assignment is rarely reversible.

On the flip side, there are times when you want a full assignment of rights. When you hire a freelancer to create your cover, website or custom illustrations, then that freelancer should assign all rights to the final work to you upon completion and full payment.
http://www.dreamstime.com/stock-photos-red-book-glasses-image24394203

4.  Indemnity. An indemnity is a promise to defend and reimburse someone from a legal claim and economic loss. As a writer, you will sign many agreements in which you “warrant” your work is original and non-infringing and you agree to indemnify the other party from any claim to the contrary. This means you must hire the attorneys and pay everyone’s legal fees, damage awards and settlement costs.

Read all representations, warranties and indemnities in your contracts. If you don’t understand them, ask the other party to explain what the contract means in an email, and save that email. And consult an attorney. If you cannot make the warranties with confidence, then revise them to reflect reality.

5.  NDA. Non-Disclosure Agreement. If you sign an NDA or confidentiality agreement, take the responsibility seriously. No matter how excited you are about the project, don’t brag or leak information. You could get sued.

If you want your editors, cover designers, agents, and so on to keep quiet about your current project, have them sign a Non-Disclosure Agreement.

Have you been tripped up by contract terms? Please leave a comment and let other writers know.

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2 responses to “Five Contract Terms Every Writer Should Know”

  1. Jill dye says:

    Is this reasonable? (After stating Author/Artist is sole representative of original work, free of plagiarism, no libelous matter or civil rights violation, or infringement on existing copyright, and not heretofore published in book form), “The Author/Artist agrees to indemnify and hold Company harmless from any loss or damages suffered by Co. including reasonable attorneys’ fees required to defend Co.”
    Thank you.

    • Jill, Unfortunately, this is standard language in contracts for with both traditional and self-publishing companies. Sometimes, in a traditional publishing contract, it negotiated so that the author is protected by the publisher’s insurance or there is some sharing of risk. After all, the publisher is enjoying the profits from the book and should share some of the risk. But in self-publishing, the author is the publisher and accepts all these risks.

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