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"invoice price" was defined in each author contract as "the price
shown on the Publisher’s invoices to its wholesaler and retailer
customers from which the Publisher’s wholesaler and retailer
discounts are calculated."
The Ballantine standard author contract provides that "[t]he
Publisher agrees to pay the Author a royalty on the retail price
or, for any hardcover copies, on the invoice price of each copy of
the Work sold by Publisher, less returns". A separate paragraph
of the contract requires Publisher to "render semi-annual
accountings * * * on or before February 1st for the six-month
accounting period ending in the preceding September and on or
before August 1st for the six-month accounting period ending the
preceding March." This paragraph further provides that "[e]ach
statement rendered will be accompanied by payment of the amount
shown to be due thereon, after allowance of a reasonable reserve
for returns and after recoupment of [advances]."
Both the Random House and Knopf standard author contracts
provide that "[t]he Publisher shall pay to the Author a royalty on
the invoice price of every copy sold by the Publisher, less actual
returns and a reasonable reserve for returns".3 The Random House
and Knopf standard author contracts, like the Ballantine form of
3 A few contracts in effect during the audit years, in a
format different from the contracts discussed above, provided for
the withholding of a royalty reserve against future returns only
during the first 2 years following publication.
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Last modified: May 25, 2011