Contracts: Avoiding the Gotchas

The writer of The Passive Voice blog, a lawyer who no longer practices, has written a must-read blog post about how to avoid getting stung by nasty little clauses that a publisher or agent may try to sneak into your contract. Passive Guy calls these clauses "gotyas". Here is an example of a gotya clause:

“For services rendered and about to be rendered, the Author does hereby irrevocably assign and transfer to said agent and said agent shall retain, a sum equal to 15% as an agency coupled with an interest….”

That example comes from Kristine Kathryn Rusch's blog post: The Business Rusch: Agents. Here is Kristine's commentary:

Oh, my God. I wouldn’t have signed that as a twenty-one year old newly birthed nonfiction writer. It sounds scary because it is. It means that the writer has assigned his agent—irrevocably—15% of the book. “An interest” is a legal term and (lawyers, you can correct me), it means that the agent now has a piece of that property. 15% worth to be exact.

I am not a laywer and nothing that I say in this post is legal advice. Having made that clear, the way I read Passive Guy's post, he is saying that if you aren't sure that you or your IP lawyer have ferreted out every single last gotya clause in the contract you're thinking of signing, one way to smoke out these dastardly clauses is to add an avoidance of doubt clause (or two, or three, or ...) to your contract.

The Passive Guy gives a great explanation of what an avoidance of doubt clause is, so I'll just refer you to his blog post for that. As I understand it, though, the basic idea is this: Explicitly state what rights you seek to retain and if the publisher or agent who gave you the contract demands that one or more avoidance of doubt clauses be removed then you know that there are hidden gotya clauses in the contract and which ones to look for.

Here are Passive Guy's examples:

For the avoidance of doubt, no provision of this contract shall:

1. Give Publisher any rights to any present or future work of Author other than new books with the same characters as the Work.
2. Prevent Author from publishing any of Author’s present or future books with another publisher or self-publishing such books except for books with the same characters as described above.
3. Give Publisher any rights to electronic versions of the Work except for an ebook version of the Work with features substantially identical to those being sold at retail by Publisher on the date of this contract.
4. Give Publisher any rights to versions of the Work in electronic or other formats that are not being sold commercially at retail by one or more major book publishers on the date of this contract.
5. Give Publisher any rights to past, present or future creations of Author that are not books, including adaptations by Author or others of the Work into a form that is not a book or ebook.
6. Give Publisher any rights to modify the content of the Work as initially accepted for publication by Publisher without Author’s express written consent in a document separate from this contract.

I believe there is a lot of truth to the old saying, to be forwarned is to be forearmed. I highly recommend reading Kristine's three part series on The Business Rusche:

The Business Rusch: Surviving The Transition (Part One)
The Business Rusch: Publishers (Surviving the Transition Part 2)
The Business Rusch: Agents (Surviving the Transition Part 3)