“NEXT BOOK” PROVISIONS IN PUBLISHING CONTRACTS

IVAN HOFFMAN, B.A., J.D.


        In book publishing agreements, there is often a provision granting the publisher the right to acquire the author’s next book.  It is generally called a right of first refusal.  The clause has many wrinkles to it.

        It generally reads something like:

We shall have the right to acquire your next book upon the same terms and conditions as set forth in this agreement. 
        This is a provision most favorable to the publisher and it is not up to the publisher to offer modifications to the provisions.  Instead, it is up to the author, acting out of the author’s obligation of personal responsibility, to seek modifications to the clause more favorable to the author.  And in turn, it is up to the publisher to do the same and in the middle of this tug, a deal can emerge.  We are in the “day of the deal” and no one is responsible to protect a contracting party except the contracting party.  Read “Private Laws.”

        However, the clause even as indicated, is quite vague and uncertain and can lead to much confusion and unhappiness on the part of the author.  And if the author is unhappy, the publisher will also be unhappy since the efforts by the author to avoid the clause and, in the worst case scenario, litigate it, will cost much money for both sides.

        Thus it is in both parties best interest to negotiate this provision (and the entire agreement) with great care and specificity.  Help me is almost always cheaper than fix me later.  I have been at both the litigation table and the negotiation table and the latter is much less expensive.

Some Of The Issues

        1. Does this apply to any book on any topic or is it limited to a book on the same topic?  While in the computer book field authors may become known as experts on a particular topic and the publisher may wish to “lock in” that author for another book on that topic, in the general trade arena this may not apply.  As the clause now reads, it covers any book.

        2. What if the author co-writes a book with another author?  Does the clause apply to the author’s rights in that second book?  And if so, what happens to the rights of the co-author who may have a similar provision in a contract with another publisher?

        3. What if the author is merely a contributor to some degree in the author’s next book?  Is this the author’s next book?  What if the author uses some of the material in the current book for other purposes, such as preparing lectures, seminars etc. and binds them into a book?  Does the publisher have the right to this book?

        4. What if, as in the computer book industry but also in the trade arena, a publisher has the right to put out a revised, updated edition?  (Read “Revised Edition Clauses in Computer Book Contracts.” )   If the author writes that revised and updated edition, does that count as the “next book?”

        5. If the current book is successful, should the author be bound by the “same terms and conditions” as in the current agreement?  Should the author be entitled to negotiate an entirely new agreement including all provisions such as royalties, advances, reserves and so on?  And if the author is bound by the “same terms and conditions” and if the next book is a revised version of the current book, and if the author has a royalty escalation clause whereby the author gets higher royalties on higher sales, does this mean that the next book is a “new book” that starts at unit 1 or can the “new book” be interpreted as a continuation of the old book since the market has already been established by the old book thereby depriving the publisher of the argument that the lower royalty rates are justified by marketing costs for a new book? And if the author is bound by the “same terms and conditions” does this mean that this particular clause is also part of the new deal for the new book meaning that the publisher then has the same rights as to the “author’s next book” which would be, in this example, actually the third book?  If there are open provisions, then what starts out looking like a right of first refusal now takes on the qualities of a right of first negotiation.

        6. How do the “mechanics” of this clause work?  When do the publisher’s rights commence?  Suppose the author has already written the “next book” even before the first book comes out?  Does the publisher have to acquire this next book before the first one proves itself in the marketplace?  Is it in the author’s best interest to cause the publisher to do so?  And once a proposal or a manuscript is submitted, how long does the publisher have to make its decision?

        7. And if there are open points to the “same terms and conditions” such as an advance, new royalties etc., how long do the negotiations go on for before the publisher’s rights expire?  And what happens if the publisher’s rights expire or the parties cannot agree on terms and then the author gets an offer from another publisher?  Can the first publisher have the right to match that offer and acquire the book?  Are there limits to these rights?

Conclusion

        These are just some of the issues that arise in provisions such as this.

        Keep in mind that in this article I take no position on the merits of either the author’s or the publisher’s position.  As an attorney, my job is to advocate the position in the best interests of my client.  I represent both authors and publishers, though clearly not in the same transaction.

        The purpose of this article is to point out the negotiating points that should be covered in this particular provision.  My goal in all instances is to have a contract that is clear and precise.

        Vagaries are in neither party’s best interest.

© 2001 Ivan Hoffman

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This article is not intended as a substitute for legal advice.  The specific facts that apply to your matter may make the outcome different than would be anticipated by you.  You should consult with an attorney familiar with the issues and the laws.
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No portion of this article may be copied, retransmitted, reposted, duplicated or otherwise used without the express written approval of the author.

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