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Contract Terms Glossary

The clauses that decide what a writing deal is actually worth, in plain English. Every entry pairs the definition with the watch-for note from Authors Guild, National Writers Union or SFWA contract guidance, so you know not just what the term means but where it bites. Search it, or switch to Test yourself.

Grant of rights

The clause that hands the publisher specific rights in your work: which formats it may publish, in which languages, in which countries, exclusively or not. Everything a publisher may legally do with your book flows from this clause.

Watch for: Grant only the formats the publisher will actually use, list specific countries and languages, and insist on wording that the author retains all rights not specifically granted. (Source: Authors Guild Model Trade Book Contract, Grant of Rights commentary)

Territory

The geographic scope of the grant of rights: which countries the publisher may sell your book in, and in which languages.

Watch for: The Authors Guild warns against granting exclusive English-language rights in non-English-speaking countries, because that blocks you from licensing those markets to other English-language publishers. (Source: Authors Guild Model Trade Book Contract, Grant of Rights commentary)

Reserved rights

Everything you did not expressly grant. A well-drafted contract states that the author retains all rights and title in the work, subject only to the rights specifically granted to the publisher.

Watch for: Without an explicit reserved-rights sentence, new formats that did not exist at signing become an argument instead of your property. (Source: Authors Guild Model Trade Book Contract, Grant of Rights commentary)

Advance against royalties

Money paid up front and charged against everything the book later earns you. You see no further royalty money until the book has earned the advance back.

Watch for: It should be non-refundable once the manuscript is accepted. For advances under about $40,000 the Authors Guild recommends two equal installments, not a long drip tied to milestones the publisher controls. (Source: Authors Guild Model Trade Book Contract, Advance Against Royalties commentary)

Royalties

Your percentage per copy sold, calculated on either the list price of the book or the amount the publisher receives after bookseller discounts. Paid on net copies sold: shipped minus returned.

Watch for: Royalties are usually not paid on review copies, author-discount purchases, or damaged stock. Know which base (list or receipts) each rate in the grid uses. (Source: National Writers Union, Guide to Book Contracts)

Royalty escalator (breakpoints)

Rate steps that raise your royalty as sales pass thresholds. The long-standing hardcover standard: 10 percent of list price on the first 5,000 copies, 12.5 percent on the next 5,000, 15 percent beyond that.

Watch for: Both the percentages and the breakpoints are negotiable; established authors start higher and escalate sooner. (Source: National Writers Union, Guide to Book Contracts)

List price vs net receipts

The two bases for computing royalties. List (cover) price is fixed and visible; net receipts means the money actually payable to the publisher from sales or licensing, which is smaller and depends on discounts.

Watch for: Never accept a royalty on undefined "net proceeds". If the base is receipts, the contract must define exactly what is deducted before your percentage applies. (Source: National Writers Union, Guide to Book Contracts)

Deep discount clause

A provision cutting your royalty on copies sold at discounts beyond the traditional 40 to 45 percent bookseller range, typically bulk sales to big-box chains and special channels.

Watch for: As deep-discount selling grew, authors on these clauses saw sharply reduced income on huge chunks of their sales. Narrow the channel definitions and floor the rate. (Source: National Writers Union, Guide to Book Contracts)

Royalty statement (statement of account)

The periodic accounting the publisher renders, semi-annually at major trade houses, showing sales by format, rates applied, reserves held and licensing income.

Watch for: Statements should arrive even when little or no money is due. Resist wording that lets the publisher withhold both statements and payment until a minimum accrues. (Source: Authors Guild Model Trade Book Contract, Statements of Account commentary)

Reserve against returns

Royalties the publisher holds back against the copies bookstores may return unsold. The held amount appears on your statement and is released in later periods.

Watch for: Statements should itemise the reserve amount withheld, and the contract should cap how large and how long-lived reserves can be. (Source: Authors Guild Model Trade Book Contract, Statements of Account commentary)

Satisfactory manuscript (acceptance) clause

The publisher's right to accept or reject your delivered manuscript. Rejection can cancel the contract, which is why this clause decides who bears the risk of the writing period.

Watch for: Require the publisher to give a detailed description of perceived deficiencies and a chance to revise on an agreed deadline before it may reject. (Source: National Writers Union, Guide to Book Contracts)

First-proceeds clause

A softer repayment mechanism when a publisher cancels for an unsatisfactory manuscript: instead of repaying the advance from pocket, you repay it out of the first money received when another publisher buys the rejected book.

Watch for: Avoid versions that make you repay directly if the book has not resold within 12 months. Better language ends the repayment obligation entirely after a set period, around 24 months. (Source: National Writers Union, Guide to Book Contracts)

Kill fee

The portion of the agreed money you keep when the publisher cancels the work. In book deals it often appears through a first-proceeds arrangement where the original publisher accepts less than full repayment; the amount the author keeps is in effect a kill fee.

Watch for: Pin down the percentage and the trigger in writing before you start work, not after the cancellation call. (Source: National Writers Union, Guide to Book Contracts)

Out-of-print clause (rights reversion)

The clause that lets you regain your rights and terminate the contract when the work is no longer selling. You trigger it by sending the publisher notice; the publisher then typically has about six months to put the work back into print or revert the rights.

Watch for: Print-on-demand and ebook availability alone should not count as in print, otherwise the publisher can hold rights forever without investing anything. Demand a revenue-based test. (Source: Authors Guild, Rights Reversion: Negotiating and Exercising Out-of-Print Clauses)

Earnings threshold

The modern trigger for reversion: the book counts as out of print when your royalties fall below a set dollar figure, for example $150 to $300 across a year (two consecutive royalty periods).

Watch for: An earnings threshold beats a sales threshold, because deep-discounted copies can keep sales numbers alive while paying you almost nothing. (Source: Authors Guild, Rights Reversion: Negotiating and Exercising Out-of-Print Clauses)

Option clause (right of first refusal)

A promise that the publisher gets to consider your next book before anyone else. You cannot be forced to sign again, but a broad option can seriously encumber offering the new work elsewhere.

Watch for: Never agree to submit a complete manuscript; a proposal is enough. Limit it to the same genre, set a 30-day decision deadline, and refuse same-terms language. (Source: National Writers Union, Guide to Book Contracts)

Right of last refusal (matching rights)

The harshest option variant: the original publisher may match any competing offer for your next book, which guts your negotiating position because other houses know they can be trumped.

Watch for: Strike matching rights entirely. The Authors Guild treats last-refusal provisions as unfair even when the first book succeeded. (Source: Authors Guild Model Trade Book Contract, Right of First Negotiation commentary)

Non-compete (competing works) clause

A restriction on publishing other work that might compete with the contracted book. Broad wording can reach sequels, series characters, or any book on a similar subject.

Watch for: Limit it to works that would directly injure the sale of the contracted book, on the same (not similar) subject, for the same market, with a firm time limit of a year or two. (Source: Authors Guild Model Trade Book Contract, Competitive Works commentary)

Representations and warranties

Your formal promises: you own the work, it is original and previously unpublished, and it does not infringe rights, defame anyone or invade privacy.

Watch for: Insist the legal-judgment promises are qualified "to the best of the Author's knowledge". You are a writer, not an insurer against every possible claim. (Source: Authors Guild Model Trade Book Contract, Representations and Warranties commentary)

Indemnity clause

Your promise to pay the publisher's losses and expenses in a lawsuit arising from a breach of your warranties.

Watch for: The dangerous versions trigger on mere "claims" or "alleged breaches". Limit indemnity to actual proven breaches, get coverage under the publisher's insurance, and cap your exposure. (Source: Authors Guild Model Trade Book Contract, Indemnities commentary)

Withholding of royalties

A publisher's right to freeze your royalty payments once someone raises a claim touching your warranties, holding your money as a war chest while the dispute runs.

Watch for: Cap the withholding at 12 months, require the held funds to sit in an interest-bearing account, and require release if no suit is actually filed. (Source: Authors Guild Model Trade Book Contract, Indemnities commentary)

Subsidiary rights

Rights the publisher may sublicense to third parties rather than exploit itself: paperback reprint, serialisation, book club, translation, audio and more, with the proceeds split between publisher and author.

Watch for: Your share is usually credited against the unearned advance and paid with the next royalty statement, months later. Negotiate pass-through payment and copies of every sublicense. (Source: National Writers Union, Guide to Book Contracts)

First North American Serial Rights (FNASR)

The right to be the first North American serial publication to print a work: the default sale for freelance articles, and historically the only transfer courts have recognised without a written agreement.

Watch for: Writers have successfully asserted that first-time online use is not included in FNASR, so name web rights separately. (Source: National Writers Union, Guide to Work for Hire Contracts (incl. glossary))

Exclusivity period

In short fiction contracts, the agreed stretch after publication, typically several months up to a year, during which you may not publish the story elsewhere.

Watch for: Reasonable in itself, but only alongside a publish-or-revert clause; otherwise a magazine that folds can leave your story in limbo, sold but never published. (Source: SFWA, Negotiating Your Short Fiction Contracts)

Publish-or-revert clause

A deadline for the publisher to actually publish. Sample language: if the publisher fails to publish within one year of the contract date, all rights revert immediately to the author, who keeps any payments already made.

Watch for: Without it, a folded magazine or a dropped anthology leaves you unable to sell the story anywhere else. (Source: SFWA, Negotiating Your Short Fiction Contracts)

Archive and withdrawal rights

For digital publications, your right to have the story withdrawn from the publisher's public archive after the exclusivity period ends.

Watch for: Some reprint markets require no concurrently active competing publication. If you never secured withdrawal rights, you cannot grant that, and the reprint sale dies. (Source: SFWA, Negotiating Your Short Fiction Contracts)

Rights bundling

A publisher taking anthology reprint, translation, audio or other auxiliary rights alongside first serial rights for one flat rate. Two markets paying the same cents per word can be buying very different rights.

Watch for: Price each right separately. If a publisher will not pay more for an auxiliary right, that is the sign it cannot use it: strike it. Any short fiction market requesting non-audio adaptation rights (film, TV, graphic novel) is a giant red flag. (Source: SFWA, Negotiating Your Short Fiction Contracts)

Work made for hire

Under section 101 of the Copyright Act, work by an employee within their job, or one of nine listed types of commissioned works under a written agreement signed before work begins. The client is treated as the legal author and owns every right from the first keystroke.

Watch for: Few book contracts validly qualify, because books are not one of the nine categories. There is no reversion and no 35-year termination right for the actual writer, ever. (Source: National Writers Union, Guide to Work for Hire Contracts (incl. glossary))

All rights

A transfer of every economic right in the work to the buyer. Unlike work made for hire you remain the legal author, which preserves one long-range safety valve: the statutory termination right.

Watch for: You cannot resell or reuse the piece, but the right to terminate the transfer after 35 years does not transfer with "all rights". (Source: National Writers Union, Guide to Work for Hire Contracts (incl. glossary))

Termination right (35-year)

The Copyright Act lets an author terminate a grant or transfer of rights 35 years after making it, exercisable within a five-year window. It is the statutory undo button on bad deals.

Watch for: It must be exercised on time, and it does not exist at all for works made for hire, because the writer was never the legal author. (Source: National Writers Union, Guide to Work for Hire Contracts (incl. glossary))

Exclusive vs non-exclusive license

An exclusive license means only that licensee may use the work in the granted way; non-exclusive means several parties can hold the same permission at once.

Watch for: Granting broad non-exclusive rights quietly limits the further marketability of the work, because you can no longer offer anyone exclusivity. (Source: National Writers Union, Guide to Work for Hire Contracts (incl. glossary))

Moral rights

The European-origin right to claim authorship and prevent modification of a work even after selling it. In the United States they are recognised only for works of visual art.

Watch for: Contracts for overseas markets may ask you to waive moral rights; know that you are giving up attribution and integrity claims in those territories. (Source: National Writers Union, Guide to Work for Hire Contracts (incl. glossary))

Joint work

A work by two or more authors intended to merge into inseparable parts of a single whole. Each joint author must contribute independently copyrightable material, not just ideas.

Watch for: Collaborations need a written agreement covering ownership shares, creative control and what happens if one author dies or walks away. (Source: National Writers Union, Guide to Work for Hire Contracts (incl. glossary))

Net days (payment terms)

The maximum time after invoicing in which the client must pay in full, for example Net 30, often paired with a late penalty and sometimes an early-payment discount.

Watch for: To be enforceable the net-days policy must be stipulated in the contract and displayed on every invoice, not just announced when payment is late. (Source: National Writers Union, Guide to Work for Hire Contracts (incl. glossary))

Milestones

Payment triggers tied to observable progress points, commonly completing drafts (first, second, final) and passing reviews.

Watch for: Tie milestones to events you control or that are objectively verifiable; successful reviews also become your evidence against a later claim of unsatisfactory work. (Source: National Writers Union, Guide to Work for Hire Contracts (incl. glossary))

Retainer

An additional payment that keeps you available for a period, even if the work has not started or stalls mid-project.

Watch for: A retainer buys your availability, not unlimited work; define what it covers before accepting one. (Source: National Writers Union, Guide to Work for Hire Contracts (incl. glossary))

Purchase order

A client document ordering goods or services that typically contains contract terms you are assumed to have accepted if you deliver.

Watch for: Review a purchase order as carefully as any contract, because delivering against it binds you to the terms printed on it. (Source: National Writers Union, Guide to Work for Hire Contracts (incl. glossary))

Portfolio copies

Your right to keep and show samples of work you produced under contract, essential for winning the next client.

Watch for: In work-for-hire deals this right must be written in; otherwise showing your own work can constitute infringement or breach of confidentiality. (Source: National Writers Union, Guide to Work for Hire Contracts (incl. glossary))

AI training clause

A modern contract provision prohibiting the use of the author's work for training artificial intelligence technologies without the author's express permission.

Watch for: The Authors Guild added this to its model contract; if your contract is silent on AI training, ask for the clause rather than assuming silence protects you. (Source: Authors Guild, Model Trade Book Contract overview)

Sublicense copies

The author's right to receive copies of sub-licenses the publisher executes, so you can verify the deals your subsidiary rights income comes from.

Watch for: Pair it with detailed royalty statements; you cannot audit income from licenses you have never seen. (Source: Authors Guild, Model Trade Book Contract overview)

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Where these definitions come from

Each entry names its source. The definitions and watch-for notes are drawn from the contract guidance the writers' organisations publish for their members:

This is general information, not legal advice. Contract language varies deal by deal; when money or reputation is on the line, consult a publishing attorney.

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