Publishing Agreement Checklist: Grant, Royalties, Warranties, and Reversion

By Casey Scott McKay · 2025-05-21

Sixteen phases for reviewing or negotiating a book contract, ordered by what is obtainable rather than by the order clauses appear in the form. It opens with the grant of rights and a subsidiary rights schedule worked line by line, because everything else operates inside them and publishers concede scope more readily than money. The money phases cover the advance schedule, the acceptance standard that makes the delivery payment conditional, the royalty base that makes a headline percentage meaningless, the deep-discount threshold, and the reserve that holds money for years when left undefined. A modeling phase runs three sales scenarios before terms are agreed. Later phases supply the sales-threshold reversion that replaces the broken out-of-print clause, the four indemnity amendments in order of value, the agency clause that outlives the agency, and the two calendar entries made on signing day.

IP and Technology > Copyright | Checklist | Published 21 May 2025 - Updated 30 May 2026 | Casey Scott McKay - marksy.us

Summary. Sixteen phases for reviewing or negotiating a book contract, ordered by what is obtainable rather than by the order clauses appear in the form. It opens with the grant of rights and a subsidiary rights schedule worked line by line, because everything else operates inside them and publishers concede scope more readily than money. The money phases cover the advance schedule, the acceptance standard that makes the delivery payment conditional, the royalty base that makes a headline percentage meaningless, the deep-discount threshold, and the reserve that holds money for years when left undefined. A modeling phase runs three sales scenarios before terms are agreed. Later phases supply the sales-threshold reversion that replaces the broken out-of-print clause, the four indemnity amendments in order of value, the agency clause that outlives the agency, and the two calendar entries made on signing day.

Keywords: publishing contract review · grant of rights · territory and language · subsidiary rights schedule · use it or lose it · advance schedule · delivery and acceptance · first proceeds repayment · royalty base · deep discount threshold · ebook escalation · reserve cap · audit rights · sales threshold reversion · option narrowing · non-compete narrowing · indemnity limits · additional insured · agency clause revocability · section 203 calendar

What this checklist is for

This is the working document for a book contract. It does not re-teach the deal. If you cannot say in one sentence why the traditional out-of-print clause no longer triggers, read The Publishing Deal first. The reasoning behind each box, with model language, is in Negotiating a Book Publishing Agreement. This document tells you what to do, in order.

Who should use it. Counsel reviewing a publishing agreement for an author; agents working alongside counsel; in-house counsel at a publisher who wants to know which asks are reasonable; and authors negotiating without representation, who are the readers most exposed by the form.

What you'll need before you start. The proposed agreement and every schedule and exhibit; the agency agreement, if any; the author's prior publishing contracts, because option and non-compete clauses in an earlier deal may constrain this one; sales data or comparable-title data for the modeling phase; and the manuscript's permissions inventory, because the permissions obligation is frequently the author's.

The worked matter. Marta Oyibo, first novel, mid-size publisher, $60,000 advance, agent at 15%, the publisher's standard form.

| Phase | What you accomplish | Typical elapsed time | |---|---|---| | 1 | Negotiate the grant | 1-3 weeks | | 2 | Work the subsidiary rights schedule | 1 week | | 3 | Fix the advance schedule | 3 days | | 4 | Fix the acceptance standard | 3 days | | 5 | Work the royalty base | 1 week | | 6 | Model three scenarios | 1 week | | 7 | Cap the reserve | 2 days | | 8 | Build usable accounting and audit rights | 3 days | | 9 | Replace the out-of-print clause | 3 days | | 10 | Narrow the option and the non-compete | 3 days | | 11 | Fix the warranty and indemnity | 1 week | | 12 | Work the second-layer clauses | 1 week | | 13 | Check the agency clause | 2 days | | 14 | Calendar the § 203 window | 1 hour | | 15 | Handle the other deal structures | as applicable | | 16 | Budget and close | 2-6 weeks |

Phase 1 — Negotiate the grant

[ ] Read the grant clause first.
- Why. Every other term operates inside it. An author who negotiates royalties without reading the territory and language grant has optimized the wrong number.
[ ] Identify the three axes: rights (which formats and which subsidiary rights); territory (world, world English, North American, U.S. and territories, or a defined open market); and language (world English versus all languages).
[ ] Confirm the legal frame: copyright vests in the author, 17 U.S.C. § 201(a); it is divisible, § 201(d); and an exclusive transfer requires a signed writing, 17 U.S.C. § 204(a).
[ ] Ask, in order of obtainability: a use-it-or-lose-it on every subsidiary right taken; retention of film, television, stage, and merchandising; retention of translation or a 75/25 split with a reverter; world English rather than world; and a negotiated royalty for formats "hereafter devised."
- Model use-it-or-lose-it. If Publisher has not entered into a license for any Subsidiary Right listed in Schedule A within twenty-four (24) months after first publication, that right shall revert to Author automatically upon written notice, free of any obligation to Publisher.
[ ] Note the duration: "for the full term of copyright, including renewals and extensions" is standard, and the realistic alternative is not a term of years but the Phase 9 reversion triggers.
[ ] Check prior contracts for an option or non-compete that constrains this deal.

Phase 2 — Work the subsidiary rights schedule

[ ] Go line by line, applying two principles: retain what the publisher will not exploit, and attach a use-it-or-lose-it to everything it takes.

| Right | Publisher's usual position | Realistic author outcome | |---|---|---| | First serial | Author often retains | Retain, or 90/10 | | Second serial | Publisher takes | 50/50 | | Book club and special editions | Publisher takes | 50/50 | | Foreign translation | Contested | Retain, or 75/25 with a 24-month reverter | | British Commonwealth | Contested | Retain where the author has representation | | Audio | Publisher increasingly insists | 25% of net if produced; 50/50 if licensed | | Film, television, stage | Author usually retains | Retain | | Merchandising and games | Author usually retains | Retain | | Electronic and enhanced | Publisher takes | Negotiated royalty, not a split | | Anthology and permissions | Publisher takes | 50/50 plus context approval | | Large print, Braille, accessible | Publisher takes | Accept; require it be done | | Abridgement | Publisher takes | 50/50 plus approval | | Formats not yet existing | Publisher takes | Negotiated royalty; refuse a default |

[ ] Add three schedule-level asks: approval over context for permissions and anthology licenses; license-level accounting identifying each licensee and terms rather than one "subsidiary income" line; and thirty days' notice before any subsidiary license is signed.

Phase 3 — Fix the advance schedule

[ ] Confirm the advance is non-refundable against royalties, not a payment.
[ ] Push the weight toward signature and delivery: half on signature and half on acceptance, or at minimum one-half, one-quarter, one-quarter.
- Why. Publication dates move and the last tranche can be years out.
[ ] Ask for first-proceeds repayment if the manuscript is rejected — the author repays out of what a new publisher pays, not immediately.
[ ] Confirm whether any portion is tied to paperback publication or a fixed period after hardcover, and price that delay.

Phase 4 — Fix the acceptance standard

[ ] Replace "satisfactory to the Publisher in form and content" with a reasonable editorial judgment standard.
[ ] Require a written statement of deficiencies within a stated period, a defined revision opportunity, and a response deadline.
- Model. Publisher shall within forty-five (45) days either accept the manuscript or deliver a written statement specifying in reasonable detail the respects in which it is not acceptable. Author shall have ninety (90) days to revise and resubmit, and Publisher shall respond within thirty (30) days. Publisher may not reject without having provided such a statement and such an opportunity.
- Trap. Without these, the acceptance clause is an option to walk away, and the delivery payment is conditional on a subjective judgment.

Phase 5 — Work the royalty base

[ ] Identify the base for every format: percentage of list price or of net receipts.
- Why. 15% of list and 25% of net are not comparable, because net follows a wholesale discount that may exceed 50%.
[ ] Record the rates: hardcover escalating on list; trade paperback; mass market; ebook, commonly 25% of net; audio, commonly 25% of net if publisher-produced.
[ ] Negotiate the deep-discount threshold from 50% to 55% or higher, and add a floor royalty below which the rate cannot fall.
- Why. As retail has concentrated, a growing share of sales falls above the threshold, which means the headline rate applies to a shrinking portion of actual sales.
[ ] Check special sales, premiums, and remainders. Ask for notice before remaindering and a right to purchase at the remainder price.
[ ] Check export and open-market rates, and confirm what "export" means given the territory grant.
[ ] Negotiate a specific direct-to-consumer rate rather than accepting a default.
[ ] Where a higher ebook rate is refused, ask for an escalation after a unit threshold — 25% to 30% of net after 25,000 copies — which publishers concede more readily.

Phase 6 — Model three scenarios

[ ] Build a model for modest, expected, and strong sales, computing: gross receipts by format and channel; royalties after the reduction clauses; the earn-out point; payment timing including the reserve; and the agent's commission.
[ ] Determine how much of the mix falls into deep discount, which tells you whether moving the threshold is worth more than a point on the top rate.
[ ] Determine when money actually arrives. Semi-annual accounting with a ninety-day lag and a three-period reserve means royalties on a sale early in a period are paid roughly eighteen months later.
[ ] Determine whether the advance is likely to earn out, and tell the author, because many books do not and an author budgeting on expected royalties is planning on a number the model says is unlikely.
[ ] Determine which negotiated points pay off in which scenario, so negotiating capital goes where it matters.
[ ] Run the Phase 9 reversion threshold against the modest scenario and confirm it would actually operate.
- Trap. A threshold set too low never triggers, which is the same failure as the traditional out-of-print clause in different clothing.

Phase 7 — Cap the reserve

[ ] Replace "a reasonable reserve against returns" with a defined provision.
- Model. Publisher may withhold a reserve not exceeding twenty percent (20%) of royalties otherwise payable in any accounting period, held for no more than three (3) accounting periods and liquidated in full thereafter. Each statement shall separately state the reserve taken, released, and cumulative.
[ ] Ask for the disclosure even if the cap is refused.
- Why. A statement that shows the reserve is a statement an author can audit, and an undefined reserve is the most common reason an earning book pays late.

Phase 8 — Build usable accounting and audit rights

[ ] Confirm frequency and lag; ask for quarterly where the deal supports it.
[ ] Require the statement to show, by format and channel: copies printed, sold, returned, and on hand; the rate applied; gross and net receipts; reserve taken and released; subsidiary income by license; and the running balance against the advance.
[ ] Secure audit rights: examination on thirty days' notice, twice yearly, at the author's expense unless the audit shows an underpayment above 5%, in which case the publisher pays the cost plus the underpayment with interest; and a five-year objection period.
[ ] Delete or limit joint accounting, which lets the publisher offset an unearned advance on one book against royalties earned on another.
[ ] Ask for statements delivered to the author directly, in parallel with the agent.
- Why. It costs the publisher nothing and it is the only way an author can actually run the audit right.

Phase 8A — Reading a royalty statement

An author who cannot read a statement cannot exercise any of the rights negotiated above. Walk the client through one, line by line, the first time it arrives.

[ ] Reconcile copies. Printed, shipped, sold, returned, and on hand should reconcile period to period. A discrepancy is not necessarily an error, but it is the first question.
[ ] Check the royalty rate applied against the contract, per format and per channel. The most common error is a format sold at the wrong tier — a trade paperback royalty applied to hardcover sales, or a deep-discount rate applied to sales that were not deeply discounted.
[ ] Check the escalations. If the contract escalates after 5,000 copies, confirm the escalation actually happened and that the count aggregated correctly across formats where the contract says it should.
[ ] Check the base. Confirm that royalties computed on net receipts are computed on receipts and not on some other figure, and that royalties computed on list use the correct list price for the period.
[ ] Check the deep-discount classification. How many units were classified as deep discount, and at what discount? This is the largest single source of unexpected shortfall and the hardest line to verify without an audit.
[ ] Check the reserve against the Phase 7 cap: the amount taken, the amount released, the cumulative held, and how many periods each tranche has been held.
[ ] Check subsidiary income license by license against the Phase 2 notice obligation. Income appearing for a license the author was never notified of is a contract problem as well as an accounting one.
[ ] Check the advance balance, and confirm no cross-collateralization from another title has been applied.
[ ] Check the agent's deduction against the agency agreement's commission rate and scope.
[ ] Diarize the objection period. The Phase 8 audit right has a limitation period, and an author who never reads statements loses the right to object to the early ones.

When to audit. The triggers are a statement that does not reconcile; a deep-discount proportion that jumps without an explanation; subsidiary income that appears without notice; a reserve that is not releasing on schedule; and a book that sold visibly well and did not earn out. Any two of those together justify the $15,000 to $60,000 an audit costs, particularly where the Phase 8 cost-shifting provision was obtained.

Phase 9 — Replace the out-of-print clause

[ ] Identify how the form defines out of print. If it turns on availability in any edition including electronic, it will never trigger.
- Why. A title available as a print-on-demand file and an ebook listing is never technically out of print, which converts a reversion right into a permanent grant.
[ ] Substitute a sales-threshold reversion.
- Model. If, in any two consecutive accounting periods commencing after the second anniversary of first publication, the Work sells fewer than [500] copies in all editions and formats combined, or generates less than $[1,000] in royalties, Author may give written notice. If Publisher does not restore sales above that threshold within six (6) months, all rights revert to Author, subject only to Publisher's right to sell existing physical inventory for six (6) months and to subsisting third-party licenses.
[ ] Address: automatic versus on notice; the inventory sell-off period; survival of existing subsidiary licenses; the author's right to purchase remaining stock, plates, and files at cost; and recordation of the reversion. 17 U.S.C. § 205.

Phase 10 — Narrow the option and the non-compete

[ ] Option. Narrow to: the next book-length work of the same kind; a response within thirty to sixty days of a proposal, not a manuscript; and no exclusive negotiation period beyond thirty days after interest is expressed.
- Trap. An open-ended option "on terms to be agreed" is a restraint on the author's next deal.
[ ] Non-compete. Narrow to: a full-length work on substantially the same subject; twelve to eighteen months around publication; with express carve-outs for articles, essays, short fiction, anthology contributions, speaking, teaching, journalism, academic work, and other media.
- Trap. Read literally, the standard clause prohibits the author from working in their field.

Phase 11 — Fix the warranty and indemnity

[ ] Understand the standard clause: the author warrants originality, non-infringement, absence of defamatory or privacy-invading content, accuracy, and power to grant — then indemnifies against claims alleging breach, including the publisher's fees, with a withholding right.
[ ] Make the four amendments, in order of value.
1. Additional insured status on the publisher's media liability policy, at the author's cost if necessary.
  - Why. The single most valuable amendment here, frequently available, almost never requested.
2. Limit the indemnity to final adjudications or settlements the author approved; at minimum exclude settlements made without consent.
3. Cap the indemnity at amounts payable to the author.
4. Limit the withholding right — a cap, a release obligation on resolution, and an accounting for what is held.
[ ] For non-fiction, narrow the accuracy warranty to "to the best of Author's knowledge after reasonable inquiry," confirm the publisher's editorial and legal review does not shift the obligation, and keep the sourcing file, which is the defense to a defamation claim years later.

Phase 12 — Work the second-layer clauses

[ ] Permissions. Who clears quoted lyrics, poetry, images, and lengthy prose, and who pays. Ask for a publisher budget or a cap. See Running a Fair Use Analysis; Fair Use Risk Assessment Checklist; Two Copyrights, One Song.
[ ] Editorial approval. Consultation on title and jacket, approval over textual changes that alter meaning, review of flap and catalogue copy.
[ ] Registration in the author's name where the author retains copyright, within three months of publication. 17 U.S.C. § 408; 17 U.S.C. § 412. See Registering a Copyright.
[ ] Infringement enforcement. Publisher first right; author step-in right; recoveries shared to reflect who bore the cost. 17 U.S.C. § 501.
[ ] Credit, expressly, on the cover, in the metadata, and in every edition.
- Why. 17 U.S.C. § 106A excludes books and Dastar Corp. v. Twentieth Century Fox Film Corp., 539 U.S. 23, 31-38 (2003) closed the Lanham Act route, so credit is purely contractual. See The Artist's Other Rights.
[ ] Author copies and reuse — free copies, the discount thereafter, and an express right to reproduce portions in subsequent work, teaching, and on the author's website.
[ ] Revised editions — who prepares, what the author is paid, and what happens on refusal.
- Trap. The standard clause lets the publisher engage someone else, charge the cost against the author's royalties, and keep using the author's name.
[ ] Assignment — free for the publisher, but require any assignee to assume the obligations in writing, and consider a reversion right if the list is sold to a party that will not publish the book.
[ ] Bankruptcy — note that a termination-on-bankruptcy clause has limited effect against the automatic stay, which is a reason to prefer the Phase 9 trigger. See Protecting a Trademark License Against Insolvency.
[ ] Governing law, forum, arbitration, and notices with an address that will still work in twenty years.

Phase 12A — The clauses to check before an author signs anything else

A publishing contract is not the only document an author signs, and three others interact with it directly.

[ ] Speaking and appearance agreements. Check for grants of rights in the recorded performance, and for exclusivity terms that could conflict with the non-compete in Phase 10.
[ ] Film and television option agreements. Where the author retained those rights at Phase 1, the option agreement is its own negotiation: the option period and extensions, the exercise price, the purchase price as a percentage of budget with a floor and ceiling, reserved rights (sequel, prequel, publishing, live stage), credit, and a reversion if the picture is not made within a stated period. The reversion is the term most often omitted and the one that matters most, because most options never proceed.
[ ] Collaboration and co-author agreements. Joint authorship has consequences the parties rarely intend: absent agreement, each joint author may license the work non-exclusively without the other's consent, subject to a duty to account. A collaboration agreement should set ownership shares, decision-making, credit order, expense sharing, what happens if one collaborator withdraws or dies, and — critically — whether either may license the work alone. See Who Owns the Work?; Copyright Ownership and Chain of Title Checklist.
[ ] Interview and contributor releases, for a non-fiction work built on interviews. Get them in writing, covering the use of quotations and of the interviewee's name, and note that a release is not a substitute for accuracy.
[ ] The author's own website and newsletter terms, which should not conflict with the grant — an author who has granted exclusive electronic rights and then serializes on a newsletter has a problem of their own making.

Phase 13 — Check the agency clause

[ ] In the agency agreement: commission; scope of representation; term and termination; and post-termination commission. The negotiable point is not commission on the book the agent sold but whether the agent commissions new deals for the same work after termination, works merely submitted during the term, and future rights sales.
[ ] In the publishing agreement's agency clause, check three things: whether it is irrevocable; whether it survives termination of the agency agreement; and whether it can be amended without the agent's consent.
- Trap. An irrevocable agency clause in a life-of-copyright contract outlives the working relationship it was written for, and an author who changes agents years later finds money still routing through someone they no longer work with.
[ ] Ask for revocability on written notice with accrued commission preserved, or failing that, separate payment of each share.

Phase 14 — Calendar the § 203 window

[ ] Make two calendar entries on signing day: the date the termination window opens, and the date by which notice must be served.
[ ] Confirm the mechanics: a five-year window beginning thirty-five years from the grant, or where the grant covers publication, thirty-five years from publication or forty from the grant, whichever is earlier; notice served not less than two nor more than ten years before the effective date; and recordation with the Copyright Office. 17 U.S.C. § 203(a); 37 C.F.R. § 201.10.
[ ] Note the exclusions: no termination for a work made for hire, and none for a grant by will; derivative works prepared before termination may continue but no new ones may be made. § 203(b)(1).
[ ] Expect the work-for-hire fight, which turns on 17 U.S.C. § 101 and Community for Creative Non-Violence v. Reid, 490 U.S. 730, 751-53 (1989), and is contested for ghostwritten works, packaged books, and contributions to collective works.
[ ] See Transfers, Licenses, and Termination Rights; Copyright Ownership and Chain of Title Checklist.

Phase 15 — Handle the other deal structures

[ ] Platform self-publishing. Non-exclusive by default, except where the author enrolls in an exclusivity program. Read the term, duration, automatic renewal, and what it prohibits — typically distribution anywhere else including the author's own site. Note that royalty tiers are conditioned on price bands, file size, territory, and enrollment.
[ ] Hybrid and assisted publishing. The author pays. Ask what the author receives and what rights the publisher takes. Where the author funds production, the grant should be narrow, short, and terminable.
[ ] Predatory markers, worth naming in writing: an unsolicited approach; a large upfront fee framed as a contribution; broad rights taken notwithstanding payment; no meaningful distribution; no reversion.
[ ] Academic and professional publishing. Negotiate open-access and self-archiving rights — posting the accepted manuscript in an institutional repository after an embargo, and use in teaching. Frequently obtainable and career-relevant.
[ ] Contributions to collective works. 17 U.S.C. § 201(c) gives the collective work owner, absent express transfer, only a limited privilege, and New York Times Co. v. Tasini, 533 U.S. 483, 496-506 (2001) held it does not reach republication in a database presenting articles individually. Do not sign a broad grant where the default is favorable.
[ ] Ghostwriting. Structured as work made for hire plus an assignment fallback, which removes the writer's 17 U.S.C. § 203 termination right entirely. That is the deal; the writer should be paid for it rather than discovering it later.
[ ] Note the format question generally: an all-media grant captures formats not yet invented, as old print grants were argued to capture ebooks. Random House, Inc. v. Rosetta Books LLC, 283 F.3d 490 (2d Cir. 2002).

Phase 16 — Budget and close

| Task | Elapsed | Cost | |---|---|---| | Full contract review and markup | 1-2 weeks | $4k-$12k | | Negotiation through signature | 2-6 weeks | $6k-$25k | | Subsidiary rights schedule work | 1 week | $2k-$6k | | Termination notice and recordation | 4-8 weeks | $6k-$20k | | Royalty audit with an auditor | 3-6 months | $15k-$60k | | Reversion dispute | 2-6 months | $15k-$70k | | Litigated contract dispute | 12-24 months | $150k-$600k |

[ ] Send one consolidated markup with a cover note grouping asks into must-have, want, and nice-to-have, and say which tier each is in.
- Why. Publishers negotiate these continuously and respond well to a prioritized counterparty. It also prevents the outcome where the negotiation exhausts itself on a term nobody cared about and the reversion clause is conceded in the last exchange.
[ ] Record what was asked and refused, so the next contract with the same publisher starts from the right place.

Key Authorities at a Glance

| Authority | What it provides | Phase | |---|---|---| | 17 U.S.C. § 201(a) | Copyright vests in the author | 1 | | 17 U.S.C. § 201(c) | Collective work privilege | 15 | | 17 U.S.C. § 201(d) | Divisibility | 1 | | 17 U.S.C. § 204(a) | Signed writing for exclusive transfers | 1 | | 17 U.S.C. § 101 | Work made for hire | 14 | | Community for Creative Non-Violence v. Reid, 490 U.S. 730 (1989) | Employee status | 14 | | 17 U.S.C. § 203 | Termination of transfers | 14, 15 | | 37 C.F.R. § 201.10 | Termination notice and recordation | 14 | | 17 U.S.C. § 205 | Recordation | 9 | | 17 U.S.C. § 408 | Registration | 12 | | 17 U.S.C. § 412 | Timely registration for statutory damages and fees | 12 | | 17 U.S.C. § 501 | Infringement, for the enforcement clause | 12 | | 17 U.S.C. § 106A | VARA excludes books | 12 | | Dastar Corp. v. Twentieth Century Fox Film Corp., 539 U.S. 23 (2003) | No Lanham Act attribution claim | 12 | | New York Times Co. v. Tasini, 533 U.S. 483 (2001) | Electronic republication of contributions | 15 | | Random House, Inc. v. Rosetta Books LLC, 283 F.3d 490 (2d Cir. 2002) | Old grants and new formats | 15 | | 17 U.S.C. § 107 | Fair use, for permissions | 12 | | 17 U.S.C. § 106 | The rights being granted | 1 |

The five things people get wrong

Negotiating money before scope. Territory, language, and use-it-or-lose-it are conceded more readily than royalty points and are worth more over the life of the book.

Accepting the traditional out-of-print definition. A title that is print-on-demand and an ebook listing is never out of print, and the clause becomes a permanent grant.

Leaving the reserve undefined. A percentage, a number of periods, and a release schedule. Undefined reserves are the most common reason an earning book pays late.

Signing the indemnity as written. It covers allegations, uncapped, with unlimited withholding — and additional insured status on the publisher's policy is available and almost never requested.

Missing the § 203 window. Two calendar entries on signing day. It is the right no contract can take away and the one most often lost to a missing diary entry.