Note: Many publishers will have their own contract that they prefer to use, but if you are asked to provide a contract, this is a skeleton of some of the key clauses you need. Please be aware there are nuances in every deal—and so this is not necessarily a one-contract-fits-all situation. With that in mind, here are some basic clauses with which you should become familiar.
This will confirm the agreement made between Publisher [fill in your company name and address here] (hereinafter “Publisher”), and [fill in other company or person’s name and address here], (hereinafter “Rightsholder”), concerning a work entitled __________________[put name of book here] (hereinafter “Work”), written by __________________[put author’s name here], in which Rightsholder is the sole and exclusive owner of all Rights, as hereinafter defined.
The Rightsholder hereby grants Publisher the sole and exclusive worldwide audio rights for the term of ten (10) [Note: It could be any term and is typically five, seven, or ten years.] years beginning on the date of publication of the audiobook contemplated hereunder, to publish unabridged recordings of the Work, to edit and revise and adapt the Work, and to record electronically, or in any other manner now known or hereafter developed, the Work for the purpose of duplication and distribution in any forms now known or hereafter developed (hereinafter “Audiobook”) and to sell, license and distribute the Audiobook under the Publisher’s label or its assigns. Also granted is permission to use the Rightsholder’s and author’s names in advertisement, publicity and/or promotion of the Audiobook, provided that the Rightsholder’s and author’s names will not be used in any endorsement or testimonial without Rightsholder’s prior written consent, which consent shall not be unreasonably withheld. All such rights shall hereinafter be referred to as “Rights.” Rightsholder shall not receive any additional compensation for such endorsement or testimonial. All other rights including but not limited to print, motion picture, and television, remain with the Rightsholder.
As consideration for any and all rights in the Work granted by Rightsholder hereunder, Publisher shall pay Rightsholder as follows:
(a) On sales of the Audiobook, less returns of unsold stock: Eight percent (8%) of net wholesale income received. Catalog, book, record or tape club and foreign sales payable at fifty percent (50%) of regular royalty rate. [Note: The 8 percent may be low in today’s market. You may see 10, 12, or even 15 percent on hard copy sales, if you are doing hard copy. Resist 15 percent.]
(b) On revenue received for downloads of the Audiobook, fifteen percent (15%) of net wholesale income received. [Note: Fifteen percent is fine for download sales. It can go up to 50 percent but should not exceed 50 percent unless you are working with a best-selling title—and even then, only if it is hugely best-selling.]
(c) On use of the Audiobooks for review, advertising, publicity or the like to promote the sale and distribution of the Audiobook, no royalties shall be paid. No royalties shall be paid on any Audiobooks sold to Rightsholder at a discount, given in exchange for damaged or defective goods or for sales of remainders or overstocks.
Publisher agrees to render an accounting to Rightsholder, which shall cover the period to the thirty-first day of December or the thirtieth day of June, whichever first follows publication of the Audiobook, then semi-annually during the first two (2) years following release of Audiobook by Publisher. After the initial two (2) year period, Publisher shall render a statement annually if sales in any calendar year period total a minimum of one hundred (100) copies, whereafter Publisher shall only render statements annually after each period where the total number of units sold for the preceding period(s) exceed one hundred (100) copies. Publisher shall send such statements, with checks in payment of amounts due, on or about the last day of March and September. Publisher shall maintain a reasonable reserve, not to exceed twenty-five percent (25%), against returns of the Audiobook and the amount thereof shall be deducted from the payments to Rightsholder. Rightsholder shall have the right to inspect Publisher’s books of accounting, upon reasonable written request and sufficient notice, to determine the accuracy of statements rendered to Rightsholder, provided that there may not be more than one such examination in any twelve-month period, and that each such statement shall be deemed incontestable two years after the date upon which such statement is issued unless an examination has taken place and a claim with respect thereto has been asserted in such two-year period.
The Rightsholder warrants and represents that the Work is original; that Rightsholder is the sole author and proprietor of the Work or is otherwise legally entitled to enter into this Agreement; that Rightsholder has the full power and authority to enter into this agreement and to grant the Rights granted hereunder to Publisher; that there are no claims, liens or encumbrances against the Work, that Rightsholder has not previously assigned, transferred or otherwise encumbered the Work in any manner which will conflict, interfere with, or impair the Rights granted to Publisher herein. Rightsholder further warrants and represents that the Work, when published by Publisher, will not infringe upon any statutory or common law, invade the right of privacy or publicity of any third person, or contain any matter that is defamatory, libelous or slanderous or otherwise in contravention of the rights of any third persons or party anywhere in the world, that nothing contained in the Work is injurious, harmful or damaging to the health of a user, and that all statements in the Work asserted as facts are true or are based upon reasonable research for accuracy. Rightsholder agrees to indemnify and hold harmless Publisher, and its officers, directors, shareholders, employees, agents, representatives, successors, licensees, assigns, distributors and any seller of the CD against any loss, liability, damage, cost, expense, claim, demand, action or proceeding that may be brought, including reasonable attorney fees and costs, arising from a breach or alleged breach of warranties set forth in this paragraph or otherwise arising from the Work or the Rights thereto. [Indemnification is in the event someone sues you for something the rightsholder has warranted is okay for you to do. Note that indemnification is helpful if your rightsholder has deep pockets but otherwise may be fairly meaningless if they do not have the money or insurance coverage to actually indemnify you.]
Publisher shall give the Rightsholder, free of charge, five (5) [Note: Give as many copies as you wish. Five is not a hard and fast rule.] copies of the Audiobook. If published in hard copy, should the Rightsholder desire more copies, Publisher will provide the same at a discount of fifty percent (50%) from retail, with no royalties paid on such sales.
The provisions of this Agreement shall apply to, inure to the benefit of and bind the heirs, successors, executors, administrators, and assigns of the Rightsholder, and the successors and assigns of Publisher.
Publisher shall copyright the Audiobook and shall own the copyright thereto. [Note: The rightsholder keeps the copyright to the underlying material. You, the publisher, will own the copyright only to the audio recording and when your term expires, absent an agreement otherwise, you will no longer have the right to exploit the recording, even if you own the copyright to it.]
Rightsholder agrees that no default by Publisher shall cause Rightsholder irreparable damage entitling Rightsholder to an injunction or other equitable relief; it being agreed that Rightsholder shall be entitled to seek only monetary damages, if any, for a default by Publisher hereunder.
Any controversy arising under any provision of this Agreement shall first be attempted to be settled by mediation. In the event mediation cannot settle the controversy, the matter shall be settled by arbitration in Los Angeles, California, by the American Arbitration Association under its rules as in effect on the date of delivery of demand for arbitration. Any award resolved thereunder may be confirmed by the Superior Court of the State of California, County of Los Angeles. This Agreement shall be interpreted according to the laws of the State of California and the United States. [Note: Substitute any state you are in. The rightsholder may require their state instead. Whether to give in depends on how important it is to you and whether it is worth it to argue about it. You will not win with one of the big publishers in regard to where to arbitrate or bring suit. They will insist that the contract state their preference, not yours.]
This Agreement contains the entire understanding of the parties, and may not be modified, nor shall any waiver be effective, unless in writing and signed by all the parties.
AGREED TO AND ACCEPTED:
By: __________________ By:__________________
Its: __________________ Its: __________________
[Note: The line above means the person’s title at the company, e.g., President, Owner, Managing Member, etc.]
DATED: _________ DATED: _________