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21 August 2008 @ 10:44 pm
8/21/08: Hold harmless  
Finished editing the magic lesbian plumber story and put it in the mail. Also finished putting the labels and stamps on the mailed copies of Bento #20. Also went to the gym, had lunch with deedop, and did some other errands.

I had a humungous list of to-do items when we got back from Denver. It's now almost two weeks later and I've gotten most of the stuff in the "do today" and "do this week" sub-lists done, and part of the "do next week" list. I knew at the time the list was insanely ambitious, so this is reasonable progress. Still much to do before we leave for Farthing Party, a week from today.

One of those to-do list items is to blog about a contract issue. I mentioned this issue at lunch with some newer writers during the Worldcon, and they suggested that I ought to blog it as a public service announcement.

A while ago I got a contract from a market I'd never sold to before. It included the following clause:

Author hereby agrees to indemnify and hold harmless Publisher against any cost, loss, damage, expense and judgment resulting from any breach of Author's warranties and representations herein, including, without limitation, any settlement payments and attorneys' fees and expenses, costs and disbursements.
Can you spot the problem?

At first glance this seems harmless (you should pardon the expression) enough. It means that if I, the Author, mess up and violate the warranties set up earlier in the contract -- that is, if the story is not original, or is not my own work, or has been published before, or contains slanderous or libelous material -- it's my fault and not the Publisher's, and I have to pay the damages.

The problem here is that the clause is missing the magic words "action finally sustained." As written, it enables the Publisher to respond to anyone who comes to them with an unsubstantiated claim like "this story of the Author's sends out klystron radiation that sterilized my cat!" by saying "okay, here's a million bucks" and it's the Author, not the Publisher, who has to pay it (plus attorney's fees and expenses).

Of course, you don't expect the Publisher to actually do that. But one of the rules of contracts is that you have to assume that the moment the contract is signed, both you and the Publisher will be hit by a meteor and the Publisher will be replaced by your worst enemy in the world. The purpose of contracts is to protect both sides from anything like that.

So. Adding the magic words "action finally sustained" means that the Publisher can't just settle any random claim using the Author's money. It means that you only have to pay out if the claim stands up in court.

I responded to the contract above by suggesting the following new language:

Author hereby agrees to indemnify and hold harmless Publisher against any cost, loss, damage, expense, and judgment in any action finally sustained resulting from any breach of Author's warranties and representations herein, including, without limitation, attorneys' fees and expenses, costs and disbursements.
The Publisher accepted this change and thanked me for suggesting the new language.

The moral of this story is to read and understand your contract, look for the magic words "action finally sustained," and don't be afraid to negotiate.

JoSelleupstart_crow on August 22nd, 2008 05:53 am (UTC)
I didn't know about this! Thank you :)
Smofbabesmofbabe on August 22nd, 2008 06:08 am (UTC)
Never would have spotted that.

I also wanted to add that I feel privileged to be in a community where my friends casually toss around phrases like "the magic lesbian plumber story" :->
A.kaiweilau on August 22nd, 2008 06:19 am (UTC)
Thanks for posting this!
farmgirl1146farmgirl1146 on August 22nd, 2008 06:30 am (UTC)
Thank you for bringing this to everyone's attention. It has been around (on and off, perhaps) for several years. Buz Busby alerted folks to this one, too, years ago. I have simply lined it out (deleted it) of contracts with no response from editors. That was a while ago. It is not part of the SWFA contract, which everyone should read now and then.
Hyacinthswordswoman on August 22nd, 2008 12:11 pm (UTC)
I long to read the magic lesbian plumber story!
dd-bdd_b on August 22nd, 2008 01:18 pm (UTC)
I don't think I would have spotted that, though it's clear enough now, and I'd seen the okay version before. But then, at novel length agents mostly take care of this part of the business. Pamela is still finally responsible, but expert advice is darned useful.
csinman on August 22nd, 2008 04:57 pm (UTC)
Amazing how much those three little words change the meaning! Thanks for posting this.
Leah Bobetleahbobet on August 22nd, 2008 11:02 pm (UTC)
Thank you -- I wouldn't have caught this one.

*bookmarks this into the business file*
chiefwireheadchiefwirehead on August 23rd, 2008 06:52 am (UTC)
I am curious - you are not a lawyer, nor do you play one in any venue I am aware of - so how did you spot or know about this one?
David D. Levinedavidlevine on August 23rd, 2008 04:22 pm (UTC)
It's a particular bugaboo of a member of my writing group, Jim Fiscus, who is the SFWA Western Regional Director.