When Is a Book Acceptable, and Who Says So?

THE ACCEPTABILITY PROVISION of a book contract can be summarized as follows: A publisher engages an author to write a book, stipulating in the contract that if the manuscript is not acceptable in the publisher’s sole discretion, the publisher may reject it and require the author to repay in full the advance he was paid on signing the contract. Until that advance is repaid, the publisher will not release the author from the contract, thus restricting the author from entering into a contract with another publisher for that (and perhaps any other) literary work.

Inherent in this provision are three potentially explosive elements. The first is that acceptability depends entirely on the arbitrary editorial judgment of the publisher. The second is that the author is required to repay every penny to his publisher when his manuscript is determined to be unacceptable. The third is that the author is restrained from selling his book to another publisher until his original publisher has been repaid, or at least until satisfactory provisions for repayment have been made. (And if there is an option clause in the original contract, the author may be prohibited from selling any other work to another publisher until satisfactory refund arrangements have been made with the publisher of the first part.)

This mixture has indeed exploded on numerous occasions, and with growing frequency as the stakes in our business have grown higher. But there is a qualitative difference between disputes over acceptability and those over most other items in publishing contracts. Whereas 99 percent of the quarrels that arise between authors and publishers end up being negotiated, settled, or compromised, those over acceptability often end up being litigated to final judgments. Now, publishers are loath to spend money on lawsuits, especially against authors, because it is expensive and makes for poor public relations. But when it comes to the question of acceptability, a publisher may be counted on to fight like the devil even though it looks lousy to dun and sue authors and the legal costs exceed the prospects of recovery of the money paid to the author. And authors who might otherwise shrink from the expense of prosecuting or defending a lawsuit have been known to dig in against all reason to wage war over the acceptability provision. Both sides seem anxious to make law on this issue. And when that happens, it usually means that a principle or precedent is involved that transcends money.

Authors frequently balk over the seeming right of life and death accorded in the provision that gives publishers the sole discretion to accept or reject a manuscript. But if the publisher doesn’t have that right, who else should have it? The author? Of course a publisher is entitled to that right. As in any other business enterprise, the party that commissions a work is entitled to approval of the merchandise. It’s only the potential to abuse the right that makes authors anxious, and there are enough instances of abuse to justify that anxiety.

In defense of publishers, it must be said that abuses occur less frequently than might be expected, and for two reasons. The first is that most publishers are extremely cautious about engaging authors to write books. Before contracting for an unwritten book a publisher will require ample evidence of the author’s track record, writing skill, and reliability so as to minimize the possibility that the author will not deliver, will deliver late, or will deliver a problem manuscript.

The second reason is that most publishing companies today are run by committee. Just as the decision to hire a writer is not left to one editor, neither is the decision to accept or reject the finished product. Rather, the manuscript is circulated among members of the editorial board. This is particularly true when the sponsoring editor has doubts about the quality of the material. That editor’s judgment is on the line, for he was responsible for advocating the company’s investment in the project to begin with. If he rejects it, wasting his firm’s time and raising the possibility that the money paid the author thus far won’t be recovered, he loses face, prestige, and authority with his colleagues and employers. Sometimes he loses his job. Therefore, the editor who feels negatively about a delivered manuscript will seek backup from others on the editorial board, just as he solicited that backup when he acquired the book. And unless the manuscript is truly a stinker, the board may vote to go ahead with publication or revision despite its reservations. So there are fail-safe mechanisms operative at publishing companies that can reduce the potential for arbitrary rejection.

Nevertheless, abuses of “sole discretion” do occur. I can recall more than a few occasions when a publisher contracted for an unwritten book, then rejected the manuscript because the subject was no longer as timely or relevant as it was when the publisher signed up the author, or because the editor who commissioned the project was no longer there to lend support and enthusiasm to it. A notable example of this occurred when William Morrow rejected William Safire’s manuscript of a book about Richard Nixon. Safire contended that the real reason Morrow found his book unsatisfactory was that between the time Morrow commissioned the book and the time Safire completed it, Richard Nixon had become persona non grata with the American public.

Agents and authors can cite numerous instances of publishers using the acceptability clause to renege on high-priced agreements. These publishers will agree to whatever terms it takes to get a hot author or property. Then, when the manuscript is turned in, the publisher may decide for any number of reasons that it overpaid. The publisher then threatens to reject the manuscript unless the author agrees to renegotiate the contract. The real reason for rejection may be that the publisher doesn’t have, or doesn’t want to spend, that much money. Thus far the courts have favored the publishers’ argument that they should not be compelled to publish a book that they are certain is going to lose money.

It is extremely difficult for an aggrieved author to prove in a court of law that his publisher acted in bad faith in rejecting his manuscript. The parties cannot ask judge or jury to read the manuscript, because this involves matters of taste that are beyond a court’s jurisdiction. So it’s incumbent on authors and their lawyers to demonstrate that the publisher was motivated by bad faith, and I’m happy to note a trend toward admitting good and bad faith as factors in lawsuits over the acceptability clause. Admitting those factors in turn opens the door to questions of a publisher’s editorial responsibilities, its obligations to furnish authors with editorial guidance, opportunities to rewrite, second opinions by other editors, arbitration and appeal, and other procedures designed to insure that authors are not placed totally at the mercy of publishers whose motives may be impure.

This also means that the stipulation requiring authors to repay their on-signing advance if the publisher rejects their manuscripts is coming under closer scrutiny by the courts. For if it can be shown that a publisher acted in bad faith when it turned a book down, a court may decide that the publisher is not entitled to a refund, no matter what the contract may call for. This very thing happened in a dispute between author Julia Whedon and Dell, in which the court supported Whedon’s contention that Dell had acted in bad faith by rejecting her manuscript without affording her the benefit of editorial guidance, rewrite instructions, etc. The court not only allowed her to keep the advance Dell had paid her on signing the contract, but even ruled that she had not breached her contract when she sold the rejected manuscript to another publisher before being released from her Dell contract. In fact, the court ruled that when Dell failed to furnish Whedon with adequate editorial help, Dell breached its contract and at that point the author was released with no further obligation to repay her advance.

These developments are extremely promising from the viewpoint of authors even though, at this time, they still have to fight and even go to court to gain protection that should automatically devolve on them in the boilerplate of every publishing contract. At the same time, all this legal wrangling over sole discretion only serves to obscure the real issue in the war over acceptability: Is an advance a loan? Or is it, rather, an investment?

As things stand now, publishing contracts are nothing more than free options on an author’s time, talent, and services. If, after the months or years it takes for an author to produce a book, the publisher turns the manuscript down, that publisher is entitled to get its money back in full. The only sum the publisher is out of pocket is the cost of the money—the interest, that is—that it “loaned” to the author while he was writing his book. Now, money-back guarantees are fine if you manufacture soup, soap, or spaghetti sauce. But it’s quite something else if you write books. The principle of repayment on which the acceptability clause rests is a thoroughly odious one and deserves to be fought by any means at an author’s disposal.

An advance is not a loan. It is a nonrecoverable investment, no different from an investment in a stock or bond issue, a mining or drilling operation, a Broadway show. A publisher reviews an author’s “prospectus,” his writing credits, sales records, reputation for reliability, and samples of the proposed work. If the publisher determines that a book by this author is a good investment, he puts money on it. As we have seen, the publisher truly examines book proposals as carefully as if they were “at risk” investments. Why should a publisher be entitled to get his money back while investors in every other type of offering stand to forfeit theirs? If for any reason the manuscript is disappointing to the publisher, the company has the right not to pay the balance of the advance due on delivery and acceptance. But the down payment must be forfeited and the author automatically released from his contract.

I realize that this is a hard line, but only by taking it will authors force publishers to demonstrate good faith when commissioning books. The publisher who knows he can recoup his full investment is going to have too many escape hatches when the book is delivered. He will have far fewer if he stands to lose money.

To a small degree, publishers have conceded the fairness of this position by modifying the requirement that the author promptly refund his down payment. Many houses now stipulate in their contracts that the refund may be paid out of the “first proceeds” received by the author from the sale of the rejected manuscript to another publisher. This is scarcely better than having to repay the advance at the time it’s rejected. All it means is a postponement of the day of reckoning, an extension of the date when the publisher’s “loan” must be repaid by the author.


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