CONTRACTS 101

by Cindy Ferraino

After you do a victory dance about getting the book deal you always dreamed about or your article hitting the top of the content list of a popular magazine, the celebration quickly comes to a halt when you realize you are not at the finish line yet. Your heart begins to beat faster because you know the next possible hurdle is just around the corner—the contract. For many, the idea of reviewing a contract is like being back in first grade. You know you have to listen to the teacher when you could be playing outside. You know you have to read this contract but why because there are terms in there that look like an excerpt from a foreign language syllabus.

Before I changed my status to self-employed writer, I was working as a grants and contracts administrator at a large medical university in Philadelphia. I helped shepherd the MD and PhD researchers through the channels of grants and contracts administration. While the researchers provided the technical and scientific pieces that could potentially be the next cure for diabetes, heart disease or cancer, I was there to make sure they did their magic within the confines of a budget and imposed contractual regulations. The budget process was easy but when it came to contract regulations—oh well, that was a different story. I became familiar with the terms such as indemnifications, property and intellectual rights and conditions of payments. In addition to the budget process, I was an integral part of reviewing and negotiating a grant or contract that had the best interests for every party involved.

After my son was born, I left the university and my contracts background went on a brief hiatus. Once my son went off to school, I began freelance writing. After a few writing gigs sprinkled with a few too many rejection slips, I landed an assignment for Dog Fancy magazine. I was thrilled and eagerly anticipated the arrival of a contract in my inbox. As I opened the document, the hiatus had lifted. I read through the contract and was able to send it back within a few hours.

For many new freelancers or writers who have been around the block, contract administration is not something that they can list as a perk on their resume. Instead of searching through the Yellow Pages for a contract lawyer or trying to call in a special favor to a writer friend, there are some easy ways for a newbie writer or even a seasoned writer to review a contract before putting a smiley face next to the dotted line.

PAYMENT TYPES

There are any number of different arrangements for publishers to pay writers. However, here are three of the most common and what they mean.

TAKE A DEEP BREATH, THEN READ ON

Remember breaking those seals on test booklets and the voice in the background telling you “Please read the directions slowly.” As you tried to drown out the voice because your stomach was in knots, little did you know that those imparting words of wisdom would come in handy as you perspired profusely over the legal jargon that unfolded before your eyes. The same words go for contracts.

Many writers, including myself, are anxious to get an assignment under way but the contract carrot continues to loom over our creative minds. “I’m surprised by writers who just skim a contract and then sign it without understanding what it means, “says Kelly James-Enger. James-Enger is the author of books including Six Figure Freelancing: The Writer’s Guide to Making More (Random House, 2005) and blog Dollarsanddeadlines.blogspot.com. “Most of the language in magazine contracts isn’t that complicated, but it can be confusing when you’re new to the business.”

When I receive a contract from a new publisher or editor, I make a second copy. My children call it “my sloppy copy.” I take out a highlighter and begin to mark up the key points of the contract: beginning and end date, conditions of payment, how my relationship is defined by the publisher and what the outline of the article should look like.

The beginning and end date of a contract is crucial. After I recently negotiated a contract, the editor changed the due date of the article in an e-mail. I made sure the contract was changed to reflect the new due date. The conditions of the payments are important
because it will describe when the writer will be paid and by what method. Most publishers have turned to incremental payment schedules or payments to be made online like PayPal. How the publisher considers your contractor status is important. If you’re a freelance contract writer, the contract should reflect that as well as identify you as an independent contractor for IRS tax purposes. Finally, the contract will highlight an outline of what your article or proposal should look like.

After I recently negotiated a contract, the editor changed the due date of the article in an e-mail. I made sure the contract was changed to reflect the new due date.

As you slowly digest the terms you are about to agree to for your assignment or book project, you gain a better understanding of what an editor or publisher expects from you and when.

CUTTING TO THE LEGAL CHASE

Once you have had a chance to review a contract, you may be scratching your head and saying, “Okay, now what does this all mean to me as a writer?” James-Enger describes three key areas where writers should keep sharp on when it comes to contracts—Indemnification, Pay and Exclusivity provisions.

INDEMNIFICATION is a publisher’s way of saying if something goes wrong, we are not responsible. If a claim is brought against another writer’s work, a publisher does not want to be responsible for the legal aftermath but you could be the one receiving a notice in the mail. James-Enger warns writers to be on the lookout for indemnification clauses. “In the U.S., anyone can sue anyone over just about anything,” she says. “I’m okay with agreeing to indemnification clauses that specify breaches of contract because I know I’m not going to plagiarize, libel or misquote anyone. But I can’t promise that the publication will never be sued by anyone whether or not I actually breached the contract.”

CONTRACT TIPS

Even seasoned freelancers can find themselves intimidated by contracts. Here are a few things to consider with your contract:

PAY is where you want the publisher “to show you the money.” Writers need to be aware of how publishers will discuss the terms of payment in the contract. James-Enger advises to have “payment on acceptance.” This means you will be paid when the editor agrees to accept your manuscript or article. If there is “no payment on acceptance,” some publishers will pay when the article is published. “Push for payment whenever you can,” she says.

EXCLUSIVITY PROVISIONS are where a particular publisher will not allow the writer to publish an article or manuscript that is “about the same or similar subject” during the time the publisher runs the piece. Because of the nature of the writing business, James-Enger feels writers need to negotiate this part of the contract. “I specialize in health, fitness and nutrition, and I’m always writing about a similar subject,” she says.

WHEN TO HEAD TO THE BARGAINING TABLE

Recently, I became an independent contractor for the American Composites Manufacturing Association (ACMA). When I reviewed the terms of the contract, I was concerned how my independent contractor status was identified. Although I am not an ACMA employee, I wanted to know if I could include my ACMA publications on my resume. Before I signed the contract, I questioned this issue with my editor. My editor told me I may use this opportunity to put on my resume. I signed the contract and finished my assignment.

Writers should be able to talk to an editor or a publisher if there is a question about a term or clause in a contract. “Don’t be afraid to talk to the editor about the changes you’d like to make to a contract,” James-Enger says. “You don’t know what you’ll get or if an editor is willing to negotiate it, until you ask.”

When writers have to approach an editor for changes to a contract, James-Enger advises writers to act professionally when it comes to the negotiations. “I start out with saying—I am really excited to be working with you on this story and I appreciate the assignment, but I have a couple of issues with the contract that I’d like to talk to you about,” she says. “Sure I want a better contract but I also want to maintain a good working relationship with my editor. A scorched-earth policy doesn’t benefit any freelancer in the long run.”

In today’s economy, writers are a little more reluctant to ask for a higher rate for an article.

Negotiating payment terms is a tricky subject for some writers. Writers want to get the most bang for their buck but they don’t want to lose a great writing assignment. Do your research first before you decide to ask an editor for more money to complete the assignment. Double check the publisher’s website or look to see if the pay scale is equivalent to other publishers in the particular industry. Some publishers have a set publishing fee whereas others may have a little more wiggle room depending on the type of the assignment given. In today’s economy, writers are a little more reluctant to ask for a higher rate for an article. If the publisher seems to be open to discussion about the pay scale, just make sure you approach the situation in a professional manner so as to not turn the publisher away from giving you another assignment.

WHO WILL OWN YOUR WRITING?

Besides payment terms, another area that writers may find themselves on the other end of the negotiation table is with ownership rights. We all want to take credit for the work that we have poured our heart and soul into. Unfortunately, the business of publishing has different ways of saying how a writer can classify their work. Ownership rights vary but the biggest one that writers have a hard time trying to build up a good case against is “all rights.” “All rights” is exactly what it means: hope you are not in love with what you have just written because you will not be able to use it again.

RIGHTS AND WHAT THEY MEAN

A creative work can be used in many different ways. As the author of the work, you hold all rights to the work in question. When you agree to have your work published, you are granting a publisher the right to use your work in any number of ways. Whether that right is to publish the manuscript for the first time in a publication, or to publish it as many times and in as many ways as a publisher wishes, is up to you—it all depends on the agreed-upon terms. As a general rule, the more rights you license away, the less control you have over your work and the money you’re paid. You should strive to keep as many rights to your work as you can.

Writers and editors sometimes define rights in a number of different ways. Below you will find a classification of terms as they relate to rights.

Sometimes editors don’t take the time to specify the rights they are buying. If you sense that an editor is interested in getting stories, but doesn’t seem to know what his and the writer’s responsibilities are, be wary. In such a case, you’ll want to explain what rights you’re offering (preferably one-time or first serial rights only) and that you expect additional payment for subsequent use of your work.

The Copyright Law that went into effect January 1, 1978, states writers are primarily selling one-time rights to their work unless they—and the publisher—agree otherwise in writing. Book rights are covered fully by contract between the writer and the book publisher.

In recent months, I have written for two publications that I had given “all rights” to the company. My rationale is that I knew I would never need to use those articles again but I did make sure I was able to include those articles for my byline to show that I have publishing experience.

If you feel that you want to reuse or recycle an article that you had written a few years ago, you might want to consider negotiating an “all rights” clause or maybe going to another publisher. “We don’t take all rights so there is no reason for authors to request we change the rights clause,” says Angela Hoy, author and owner of WritersWeekly.com and Booklocker.com. “Our contracts were rated ‘Outstanding’ by Mark Levine (author of The Fine Print of Self-Publishing) and has also been called the clearest and fairest in the industry.”

James-Enger is also an advocate of negotiating contracts that include an “all rights” clause. “I hate ‘all rights’ contracts, and try to avoid signing them as they preclude me from ever reselling the piece as a reprint to other markets,” she says. “I explain that to editors, and I have been able to get editors to agree to let me retain nonexclusive reprint rights even when they buy all rights—which still lets me market the piece as a reprint.” James-Enger also advises that “if the publisher demands all rights, then negotiate if the payment is sub-standard.”

So if you are just receiving a contract in the mail for the first time or you are working with a new publisher, you should not be afraid of the legal lingo that blankets the message “we want to work with you.” Contracts are meant to protect both the interests of the publishers and writers. Publishers want the commitment from writers that he or she will provide their best work and writers want to be recognized for their best work. But between those contracts lines, the legal lingo can cause writers to feel they need a law degree to review the contract. No, just sit back and relax and enjoy the prose that will take your writing to the next level.



CINDY FERRAINO has been blessed with a variety of assignments, including newspaper articles, magazine articles, ghost-written articles, stories for books, and most recently authoring a book on accounting and bookkeeping terminology, The Complete Dictionary of Accounting & Bookkeeping Terms Explained Simply (Atlantic Publishing Group).