Negotiating the foreign sales clause in textbook contracts
If authors are not careful when negotiating language related to foreign sales in their book contracts, they can end up earning next to nothing on international sales of their books.
Stephen Gillen, an attorney with Wood Herron & Evans, said that although he cannot provide exact language authors can use to negotiate the foreign sales clause in their contracts without knowledge of the unique facts and circumstances of each case, he suggests authors use the following to start the discussion with their publisher:
“For sales outside the United States, effected through a distributor, if the distributor is an affiliate of the Publisher, then the royalty to the Author shall be calculated on the receipts of the affiliate at source. For purposes of this provision, a distributor shall be considered an affiliate if it is owned or controlled by the Publisher or if it and the Publisher are commonly owned or controlled.”
Gillen cautioned, however, that although using this language would result in royalties being calculated at the higher retail price (rather than at the deeply discounted inter-company price) it will also mean that royalties are not earned or paid until after the retail sale, which may be much later than the inter-company transaction and may not happen at all if the books do not all sell through.
Steve Gillen is the author of Guide to Textbook Publishing Contracts, a step-by-step guide to the key provisions of a typical textbook contract and how to determine what’s important to you so that you can enter into the contract negotiation process better informed. Buy today. TAA members receive discount pricing.