5 Legal Terms Every Author Should Know

What is the worst mistake an indie author can make? A bad book cover? A poorly edited manuscript? A hokey website? No. It’s losing control over your work. Pause and Read the Fine Print Your work is valuable property,  just like your car or home. You wouldn’t hand over your car keys to a stranger… [Read More]

legal terms

What is the worst mistake an indie author can make?

A bad book cover? A poorly edited manuscript? A hokey website?

No. It’s losing control over your work.legal terms

Pause and Read the Fine Print

Your work is valuable property,  just like your car or home. You wouldn’t hand over your car keys to a stranger you met on the internet. You wouldn’t let someone with a slick website move into your guest room. Yet, every day, writers click ACCEPT to contracts with self-publishing companies that take too much control over the author’s work.

Why? Because they can’t bring themselves to read the fine print.

If you are like most people, online contracts with all those legal terms look like 5000 words run through a blender.  My goal is to show you where and what to look for, so you can keep the self in self-publishing.

Key Legal Terms Explainedlegal terms

Let’s start with some vocabulary.

1.  License.  When writers sign book contracts, they often say they “sold” their books. That’s not entirely correct. Authors grant publishers “licenses” to use their work, in other words, permission. Writers continue to own the underlying copyright.

A license is similar to a lease. Suppose you are a landlord of a small shopping center, and you lease portions of your property to various shop owners. You still own the building. Some shops may be used exclusively by one tenant, while use of the hallways is non-exclusive; everyone may use them.

Similarly, licenses may be exclusive or non-exclusive, world-wide or geographically-restricted, short-term or perpetual, royalty-free or royalty-paying, limited to a particular language or format, such as audio, print, or eBooks. The permutations are endless.

2.  Exclusive. If you grant an exclusive license, then the licensee has the right to stop everyone else from using the licensed work, even you.

Personally, I don’t think indie authors should ever sign exclusive licenses with self-publishing providers. They should retain the right to sell print books via CreateSpace, Ingram, bookstores, and their own sites, all at the same time. Ebooks should be distributable via KDP, Smashwords, ITunes, Digital2Digital, and other sites. The only exception is when authors choose to sign onto KDP Select for 90-day periods in order to take advantage of some promotions.

If you are publishing through a traditional or hybrid publisher, then you should expect to grant an exclusive license in return for the publisher’s investment in your work. But always draft exclusive licenses narrowly. The author-publisher relationship should be synergistic. Limit the scope of the license to the language, format, region, or other category in which the publisher has the ability to market your work successfully. For example, you would not want to grant an exclusive license to your work in all languages and formats to a small publisher that markets only English print books.

legal terms3.  Indemnity. Buried deep in all traditional and self-publishing contracts is a provision typically titled Representations. In that section, the writer warrants that the work is original, non-infringing, and non-defamatory, and that publishing the work will not violate another agreement, such as a traditional book contract. Following the representations is a clause that reads something like this: Author agrees to indemnify, defend and hold harmless publisher from any claims arising from any breach of any representation or agreement herein.

This indemnity clause is your promise to defend and reimburse the other party from legal claims and economic losses that arise from inaccuracies in your representations or your breach of the agreement. This means you must hire the attorneys and pay everyone’s expenses, damage awards, and settlement costs.

Although these clauses sound scary, they make business sense.

For example, suppose you use old photographs in a self-published memoir. If someone steps forward, claiming ownership of those images and demanding payment from you and Amazon, Amazon will expect you to defend and settle the matter at your expense. After all, it was your choice to use the old photos without permission, not theirs.

For this reason and others, it’s important to take a close look at your work for possibly infringing or defamatory material.

legal terms4.  Infringement. Infringement means the use of copyrighted work without permission. Merely giving someone credit is not enough to avoid an infringement claim; you need to get permission. Yes, there are exceptions, such as fair use. I will explain fair use more in another post, but for now, take a look at What Every Author Should Know About Fair Use.

5. Royalties. Your royalties are the portion of sale proceeds that will be paid to you.

Self-publishing companies have various ways of calculating royalties, more than I can cover in one post. But it’s critical that you know what your royalties will be on a per copy basis before you sign on. You should be able to calculate royalties assuming different trim sizes and page counts online. If the company or its website says that royalties cannot be determined until your manuscript is reviewed or formatted (and typically after you have given them your credit card number and paid a nonrefundable deposit), don’t work with that company. Find one that provides more transparency and control.

Of course, there are almost as many legal terms as there are lawyers. What are your favorites? What are your pet peeves?

(Disclaimer: Helen Sedwick is licensed to practice in California only. This information is general in nature and should not be used as a substitute for the advice of an attorney authorized to practice in your jurisdiction.)


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6 thoughts on “5 Legal Terms Every Author Should Know”

  1. Ouch!! Lots of pitfalls here… Take a second look at “Indemnity” [brackets mine]:

    – Author agrees to indemnify, defend and hold harmless publisher from any claims arising from [any] breach of any representation or agreement herein. –

    In my own experience (outside of publishing), it’s that second “any” that’ll getcha… If you see it, strike and replace with “willful” as in “from willful breach,” meaning -you knew it was wrong but did it anyway-. In fact, if you can strike all instances of the word “any,” you’re gonna sleep much easier (dang, three in just this one small sentence).

    All contracts are negotiable, and like Popsicles, risks are meant to be shared.

    1. Christopher,
      Great points. Adding the term “willful” makes a big difference for authors. Handled correctly, adding willful would mean the author will be liable only if he or she knew the material is or might well be infringing, defamatory, or a violation of a pre-existing contract.

  2. Thanks for sharing this helpful information. 🙂 — Suzanne

    1. Thank you for your kind words, Suzanne…that’s what we aim for.

  3. K. A. Jordan says:

    “Indemnity…the writer warrants that the work is original, non-infringing, and non-defamatory, and that publishing the work will not violate another agreement, such as a traditional book contract.

    This is where one can get tripped up by using song lyrics in a book. And I know there are some famous authors who got in trouble for using real people in a defamatory manner in their novels.

    It’s a fine line, but I don’t want to cross over!

  4. K.A., Yes there is a learning curve for the legal issues of publishing. With a bit of homework, writers can and should get a better sense of what’s acceptable, what’s not acceptable and most importantly, when to ask for help.

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