Clause by Clause: Rights of Termination
Welcome back to Clause by Clause, a series that aims to demystify publishing contracts! Previously we've talked about Options, Non-Competes, and Force Majeure, and today we're going to kick off the beginning of a new year by talking about endings. Here's what you need to know about Rights of Termination.
What is a Rights of Termination clause? A rights of termination clause lists out all the ways in which your contract can be terminated, meaning that the agreement between the parties is ended.
Risks It's really important to read your rights of termination clause thoroughly, because this is the clause that will determine how and when your rights are reverted to you. A reversion of rights means that the rights granted to the publisher under the contract (the right to publish the book, any subrights or territories that may have been granted) will be returned to the author. What can you do with reverted rights? You can self publish, you can try to resell to another publisher, you can just hang on to them until several years down the line when someone might pick up the phone and call you up to option film rights, or you can do nothing with them at all, if that's what you choose. But the point is that once rights are reverted back to you, your Work is once again under your control. It is not only desirable, it's imperative that there be a clear path for contract termination and reversion of rights.
There are many ways a contract can be terminated. One way is if either party is in breach. Being in breach of contract means that one party has either failed to fulfill their obligations under the agreement (the Author never turns in her manuscript. Or the Publisher doesn't publish the book within a stated time frame, or the Author misrepresented herself in the warranties). Essentially, if a contract terminates because of breach, something has gone wrong. Usually there is a curative period, which means that the offending party has the opportunity to course-correct if possible, and once again become complaint with the contract terms. If both parties mutually agree that the breach has been acceptably resolved, then things carry on as usual. But if the breach cannot be cured or is not cured within the stated time-frame, the contract will often terminate. Depending on the specific cause of termination, the Author may be required to return all payments made (but not always. Your contract should clearly define this).
But there are other, natural, amicable ways to terminate a contract as well, and this is the language that's sometimes missing from a contract. When the natural sales cycle of a book has reached its end, that's an organic time to terminate a contract. Often times contracts will terminate if a book goes out of print. But what defines out of print? Your contract should state it clearly. If the book is considered "in print" when only an ebook version is a available and no print copies, then your contract may very well never terminate, because ebooks are essentially "in print" forever. The out of print threshold should always be defined, whether it be defined by a number of print copies available for sale, or a minimum amount earned over consecutive royalty periods, or by other measurable standards. If your contract lacks this language, then your rights could remain in your Publisher's control for the life of the copyright on your work...long after you've died. The Publisher should not be allowed to sit on your rights indefinitely. Always make sure that the Author has rights of termination beyond breach.
Rewards The reward here is that you eventually regain control of your rights. This can have important business and career repercussions, so make sure you vet your contract carefully.
Negotiability You should definitely negotiate an equitable Rights of Termination clause if the language in your boilerplate isn't offering you enough protection.
When and how does the contract terminate?
What remedies or curative periods exist for breaches?
Is the Out of Print threshold defined?
Can the Author request a reversion of rights?
If you’ve got questions about contracts, or have a suggestion for which clause I should break down next, let me know in the comments!