Wow, this series of posts is proving to be more popular than any two years of my blog put together! (And John, I’ll be doing another post on Malaysia soon.) So far in this series, I have tackled:

Length of rights
Right of first refusal
Subsidiary rights
Out of print & bankruptcy

I hadn’t originally planned to include anything on auditing but was struck by Mags’ comment on the Length of Rights post. Mags said:

What happens if you do not receive any money or sales figures but know your book is selling? Does that give you an option to get out of the contract early?

In a nutshell, no, although I wonder whether Mags should be approaching a lawyer. If she has evidence of sales and no royalties forthcoming, I’m sure a good lawyer will be able to work with that. However, let’s see if we can distill some general points from a situation like this.

It occurs to me that the publishers that behave in this way (selling but not paying) have the worst contracts. I don’t know why that is. A correlation between being bastard people and creating bastard contracts perhaps? Your guess is as good as mine.

As I replied to Mags, some contracts have clauses that say that if you haven’t been paid for a certain amount of time, you have the right to take back your work, however this is by no means universal. What is more universal is an auditing clause that normally gives you the right to audit the Publisher’s books once a year. Something like this:

The Author may, with sixty (60) days [sic] written notice but not more than once a year, assign and designate a certified public accountant to examine the Publisher’s records as they relate to the Work. Such examination shall be at the Author’s expense unless errors are found in excess of ten percent (10%) of royalties in the Author’s favor, then Publisher shall pay amounts owing for the Work and the reasonable cost of the audit.

That’s not a bad deal. I quite like this one, which doesn’t have such an annual limitation:

The Publisher shall keep professional, comprehensive and complete records of all dealings of any nature, disposal or transfer in respect of the Work. The Publisher shall co-operate fully with the Author in any audit and assist in providing such information as the Author may request to establish whether there are any errors or omissions and to fully audit the accounts.

A couple of contracts I’ve seen (including the notorious one from AC-Pub) doesn’t even have a specific audit clause, content to lump such issues together in the general Disputes clause. But my favourite comes from a big big women’s fiction publisher. The clause is quite long so let me summarise the legalese:

Author shall have the right, upon reasonable notice and during usual business hours but not more than once each year, to have the books and records of Publisher examined at the place where the same are regularly maintained insofar as they relate to the Work, by a certified and independent public accountant. [okay so far] Such examination shall be at the expense of Author unless the net of all errors found aggregate to mroe than five percent (5%) of the total sum accrued to Author and are to Author’s disadvantage, in which case the reasonable expense of such examination shall be payable by Publisher. [there's that fluffy word "reasonable" again, but that's mighty decent of them, nonetheless] … No such examination shall be made by Author’s accountant upon a contingent fee basis.

Whoa, Nelly! So Big Women’s Publisher is telling me under what conditions I can hire an accountant that **I’m** paying for???? They put this last sentence in, of course, to circumvent all those freelance auditors out there who make a living from finding publisher errors, charging only a percentage of what they find. Still, arrogant much on behalf of the publisher? It gets worse though.

As a condition precedent to the exercise by Author of this right…Author’s…accountant shall execute an agreement, in a form acceptable to Publisher, to the effect that any information obtained as a result of such examination shall be held strictly confidential and shall not be revealed to any third party other than Author or Author’s representative, without Publisher’s prior written consent, [and, in case that wasn't clear] which consent may be withheld in [sic] Publisher’s sole discretion. Author also agrees to hold all information and statements provided to Author or Author’s accountant in strictest confidence…

This is the problem with writers. As a general rule, they don’t like to help each other. They see every other author out there as a potential rival for readership and the editors’ and publisher’s largesse. Clauses like this don’t help because they enable such ultimately self-defeating behaviour. What it’s saying is that if I find that Big Pub is swindling me, I cannot tell anyone else about it without Big Pub’s written consent. This is not a slam-dunk for the publisher because, if I was caught in this situation, my first avenue of recourse would be to consult an IP lawyer and find out if the clause is even enforceable. (Remember that: Publishers knowingly put in clauses that are not enforceable by law. They depend on your ignorance–and, quite frankly, your desperation–as an author to go along with them.)

The thing that saddens me about this clause is that a lot of authors will read it and actually sigh with relief. As long as they are all right, that’s all that matters. The publisher won’t let them tell anyone else, so it’s not really their fault if their fellow authors get shafted, right?

That’s a tad depressing (and one I’ve had personal experience of) so next week, some humour as we hit the kooky bits with AC-Pub, who escaped the blade in this particular episode.