Read and Write Your Own Contracts

Very often I meet writers who can’t discuss even the most basic points of their publishing contracts. They’re afraid to even read them. They’ll make the excuse, “Oh, I had my agent (or attorney) handle the contract.”

In these situations, the author is acting under a few assumptions which may or may not be true:

  1. My agent or attorney understands the deal I want
  2. My agent or attorney understands this business (book/film/videogames) better than I do
  3. My agent or attorney are working for my best interests (not theirs)

How do you know that any of this is true?  Many times, authors are unclear about what they want. They don’t even know what they can ask for, and they don’t talk long enough to their agent to find out what is possible.

This, of course, assumes that the agent actually knows what can or can’t be negotiated. Now, I have one of the best agents in the field. He really knows the publishing business for novels. He understands foreign contracts, for example, far better than I do. So if a publisher calls up and wants to purchase Yugoslavian rights to a series, he can handle that.

But years ago, I began writing a bit in the video game industry—designing games, creating proposals, scripting games—and after a few months, I asked him a question and his response was, “What are you asking me for? You know this business far better than I do.” And I had to think about it for a minute before I realized he was right. I’d probably had far more experience in the industry than he did.

In each industry, when you’re creating a contract, you need to learn what your partner is willing to offer. If a big publisher in video games is offering you a lot of money to work on a product that is licensed to Marvel, you might discover that you don’t have much wiggle room. But if you’re talking to a small publisher who can’t pay much, you can probably put together some kind of back-end deal that might be far more profitable in the long run.

My point here is this: when you meet with a producer or publisher who wants to buy the rights to your projects, you need to educate yourself. You need to let them know of any concerns you have, any inequities you worry about, and figure out what kind of a deal that you can put together that you both feel good about.

Years ago, I paid thousands of dollars to have a big Hollywood attorney read through a contract. He sent it back to me without any changes. I felt uneasy about it, so I sat down and read it—and read it again and again—trying to understand potential traps and pitfalls.

I spent a month studying it, rereading it three times a day, and I found four clauses that seemed dangerous. For example, one of the clauses said that if the company that issued the contract ever went bankrupt, they could sell the rights to my movie as an asset in bankruptcy court. I rewrote the paragraph so that if that ever happened, the rights reverted to me.

Another clause said that if they made a movie that was unprofitable, then they would be able to hold my film rights for 17 years and do a remake. I fixed that clause, too.

I really didn’t think that the investor who wrote the contract was trying to cheat me. He was new to Hollywood, a fellow with a stellar representation—a priest, in fact—and I liked him. But after I met with his attorney, the attorney went in to have a chat with the investor on a speaker phone. I happened to be at the drinking fountain and overheard the lawyer in his office breaking the “bad news” to the investor. Those four loopholes were “deal killers.”

I was astonished at the investor’s reaction: he howled like a demon being thrust down to hell. I realized that he really had been planning to pay a small option fee and then use that to take my rights. He planned to declare the company bankrupt, then go to bankruptcy court and buy the rights to his defunct company—a scam that is all too common in Hollywood.

I learned later that those “gotchas” that I found in my contract are standard wording in most Hollywood contracts and major studios demand that they be left in. As one lawyer for a major distributor put it, “We’d never sign a contract without those clauses.” So my expensive Hollywood attorney didn’t fight the wording.

Every week, I usually have to sign some kind of contract. Right now, I’m negotiating a change on a screenwriting contract. Last week I signed a contract for a short story, and two that negotiated speaker fees for conventions. I’m also talking to another producer about selling rights to a novel for use in an animated television series, and I’m writing up another contract to provide some editing services for a writer.

In short, you need to understand contracts. Raymond Feist wrote some articles for SFFWA ages ago that covered the clauses you can expect to find in publishing contracts. If I recall correctly, he also discussed the pitfalls that you might find in agency agreements with literary agents. I’m sure that there are other good books and articles that you can use to understand contracts, but my point is this: you learn to handle your own contracts. You can talk with your agent or attorneys if you like, but I only rely upon them as backup.

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Fyrecon I will be teaching a master class writing workshop at Fyrecon this June 20-22 in Layton, Utah. I’m also offering a special for Fyrecon. Get the Writing Enchanting Prose workshop there for only $350–a savings of  $150–if you use the code: EnchantedFyre19. You can register here.

SpikeCon I will also be teaching at SpikeCon on July 3rd, also in Layton, Utah. Learn more here.

Don’t forget to register for two upcoming writing workshops. Writer’s Peak July 19-20 and The Plot Thickens Master Class September 18-21. More info on MyStoryDoctor.com.

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