Answer:
As a publisher, you will want to ensure that any contracts you enter into with authors appropriately protect your interests. Your contract should specify what rights and obligations you have and what royalty payments will need to be made. Below, we look at five key clauses you should include in your publishing contract.
1. Delivery Clause
Before signing on an author, you should ensure there is a delivery clause in your agreement. This will set out when the author’s finished manuscript should be delivered to you.
These clauses also typically describe the expected standard of the finished work, providing useful writing and planning guidelines for the author. You should include a publication deadline as well, so your author will know when their book will hit stands.
2. Warranties and Indemnities
You will want to pay extra attention to any warranties or indemnities in your contract. These warranties are a promise that the author gives to you, and include promises that their work:
- is original;
- does not infringe any other intellectual property (IP); and
- is not defamatory.
By having these warranties in place, you can seek damages from the author if a third party makes a claim against you as the publisher, on the grounds that the published work infringes their rights.
Tip: The contract should usually state that the author is responsible for any IP infringement or defamation.
3. Royalties
The publishing contract should also include clauses about when and how you will pay royalties to the author. The table below details some common royalty rates in the Australian publishing industry.
| Format of Publishing | Standard Royalty Rate |
| 10% of recommended retail price | |
| Print and Digital | 25% of net receipts |
| Digital Only | 40-50% of net receipts |
It is important to note that royalty rates can and often do vary depending on various factors, including:
- how established the author is;
- the market the book is being released into; and
- whether you are planning to sell the book as a paperback, e-book or both.
4. Subsidiary Rights
Generally, the industry standard will allow the author to keep the rights to audio, film, media and merchandising rights. You should review these clauses to determine whether you:
- can publish the book in both traditional and digital formats; and
- have the exclusive or non-exclusive rights to publish the work in other languages or countries.
As this is an investment for you, you may also wish to consider whether you want the option to publish the author’s next work.
5. Dispute Resolution
It can be very useful to have a dispute resolution clause in your publishing contract. This clause aims to prevent any issues between parties from proceeding to litigation. It should clearly set out:
- what action each party should take if a disagreement arises; and
- that the contract is governed by the law in the state in which you are based. This is particularly important if the author is based in a different state, which may have different dispute resolution laws.
