One thing any would-be published author will encounter in one form or another is a contract. Lawyers are scary to many people. Obviously if you receive correspondence from one, unless you are and heir to a vast fortune the likelihood is it is not good news. Add to this the inevitable and never-out-of-style lawyer shows and movies...and Congress...well hell, we'd say you have good reason to be cautious. But contracts are a legal inevitability if you want to: (a) protect your rights as an author; and (b) receive a fair shake in the royalties department.
One word every would-be author should commit to memory: boilerplate. This is a legal term meaning language in contracts that is there and never changes. Typical boilerplate provisions include but are not limited to: how disputes are resolved; which state's law controls interpretation of the contract provisions; who the contract is between (author and publisher); transfer of rights; exclusivity of rights to publisher; and others. Usually these terms are what one would call non-negotiable.
There is usually room for real negotiation with a publisher if the publisher is an indie press vs. a big house; and where the product is an e-book vs. a hard copy product. The rationale behind this is a big house has no vested interest in negotiating anything. That entity has been around for a while and you are literally one of hundreds of authors. That entity figures you will be happy just to have the name associated with your product and so they, for the most part, will dictate the terms. You may have some say regarding the cover design, but even that is unlikely.
An indie press, on the other hand, will likely be more willing and able to negotiate royalty splits on things like e-books because unlike a hard copy run, e-books do not require actual per-page costs. When a big house or indie press goes to press literally, they are looking at certain up-front costs to print the product before it even leaves the distributor's facility. Many of the big houses use Lightning Source (a POD outfit - no matter what they may say, it's true - Simon & Schuster is one of their big clients). If you want to see what we mean, go to their website: www.lightningsource.com.
What points of negotiation are not considered off limits? As previously stated: e-book royalties; certain primary and secondary royalties on hard copy print runs depending on the publisher's cost; method of dispute resolution; how long the publisher has exclusive rights to your title; how the product is to be delivered to the publisher; for of notice for termination of the contract.
If you receive a publishing contract, do not rely on yourself to be able to interpret the legalities of the document. Get off your butt and have a friend of a friend who is an attorney look it over. I guarantee they will see things in it you will miss. A classic example and horror story of what happens when you don't do your homework follows:
Would-be author was offered a contract for her first novel. Publisher said she could have stock warrants in lieu of advance. Author was so excited she signed on. Silly author - a stock warrant allowed her to buy the number of shares reflected in the warrants if publisher ever became a publicly-traded corporation...which of course it never did. So the "advance" was worthless and, in fact, she would have to pay for it. Ooops.
It is also a good idea to do due diligence on the publisher. Does this mean if a company is a start-up it sucks? Obviously not. It means they won't have a track record yet. So research the people who started the company. Do they have industry credibility? Have they ever been published? There is a big bad world of shady operators out there, but don't judge all publishers by that standard. Sometimes the most advantageous contract terms will come from the smaller and start-up publishers because they seek clients and want to build credibility. Besides, who's to say one should instantly reject an indie company that wants to do things a little differently than other companies? After all, they said e-books "died out" about seven years ago...hmmmm..
Also do not write off indie houses that have traditional and self-publishing capabilities. Hey, Harlequin did it a few years ago and rocked the publishing world...but they still did it and we doubt their readership changed or their corporate board suffered any from the added revenue. Publishing is a business and the goal of both parties is to make money. Some authors who want more control over their product prefer self publishing but will use the services of an indie press to achieve that goal - it's a hybrid type of publishing contract. And they are valid.
It seriously does not take a rocket scientist to write a contract - there are plenty of templates out there to use - but if, God forbid, you wind up in a dispute with the publisher over the terms of that contract, you will spend a lot of money on attorneys to resolve it. So take some preventative measures and make sure you understand the document you are signing.
At the same time, though, it is wise not to push the envelope of chutzpah merely because you are dealing with an indie house. Somehow there is an idea floating around out there that an indie house has to do things on the author's terms or they will never "make it." Here's a big news flash: it ain't so. What will have happened is you closed a door on an opportunity.
Have some decorum and approach your contract negotiations in good faith - protect your interests; but do not perceive the publisher as the enemy who is automatically out to rip you off. Sure the publisher needs to make money - they will be selling your product. But guaranteed your product will be better once professionally edited and with a spiff cover than when it arrived as an e-mail attachment, right?
In short, don't let the contract make you lose sleep; but read it with an intelligent and logical approach to what you wish to achieve in partnership with the publisher. After all, there's a lot of litigation out there that could have been prevented by taking a little time to review and negotiate.