Clause & Effect: <b>Acceptability Provisions in Book Deals</b>

What constitutes an acceptable book manuscript has been at the heart of numerous disputes between authors and publishers. An acceptance clause in a recent dispute stated:

A Work shall be “acceptable” under this Agreement if such Work meets a standard comparable to the literary merit of Author's previous works.

In this case, internationally known author Mark Helprin signed a five-book deal containing a $2 million advance with Harcourt Brace Jovanovich Inc. (HBJ) in 1989. In 1995, HBJ published “Memoir from Antproof Case,” Helprin's first book under the contract. Helprin submitted the draft for the second book in October 2002. Two months later, HBJ's president wrote Helprin that the manuscript was unacceptable. Helprin filed suit in U.S. District Court for the Southern District of New York alleging in part that HBJ's rejection of the second book amounted to breach of contract.

HBJ moved to dismiss, contending that Helprin was barred from filing suit by Paragraph 8 of the publishing agreement that stated “if a Work is not published within the time provided in Paragraph 6 [ie, within 18 months after delivery and acceptance of the final revised manuscript] … Author may thereafter request Publisher by written notice … to publish such Work within six months after Publisher's receipt of Author's request. If, after receipt of such notice, Publisher fails to publish such Work within such period, this Agreement will terminate with respect to such Work immediately and automatically at the end of such period, all rights to such Work will revert to Author on the effective date of termination without further obligation or liability on the part of Publisher, and Author will have the right to retain any advances previously paid, but will be entitled to no other compensation, remedy, or damages, and Author will retain the right to sell such Work to another publisher and retain the proceeds. Publisher's failure to publish a Work that it has accepted according to the provisions … hereof will not alter the conditions under which Author is deemed to have satisfied his obligation in regard to such Work.”

Under HBJ's reasoning, despite rejecting the manuscript, the book was acceptable for purposes of these provisions because Helprin claimed in his suit that the manuscript met the terms of the contract's acceptability clause.

The district court rejected the argument, noting, “A contract provision cannot be read to have been fulfilled simply because, in a pleading and without more, one party says so.” Helprin v. Harcourt Inc., 277 F.Supp. 327. But the Manhattan district court also noted that New York courts facing similar fact patterns have ruled that a publisher can terminate a contract with an author if the publisher, in its sole discretion, determines that a manuscript is unsatisfactory, “provided that the termination is made in good faith, and that the failure of the author to submit a satisfactory manuscript was not caused by the publisher's bad faith.”

The court then looked at additional language in the acceptability clause of the HBJ contract that stated: “Publisher recognizes its obligation to give editorial assistance to Author in order to assist [him] in making the manuscript of each Work hereunder acceptable for publication by Publisher. However, Publisher reserves the right to determine the amount and usefulness of its editorial assistance and whether or not its editorial intervention will result in an acceptable manuscript that merits publication by Publisher.”

Helprin claimed that the rejection letter he had received from HBJ stated only that his manuscript was unacceptable. That prompted the district court to refuse to dismiss the breach of contract claim. According to the court, “There is no indication at this stage from either party that Harcourt offered any further editorial comments or assistance, nor has it been alleged by either party that Harcourt allowed Helprin an opportunity to cure whatever defects Harcourt found in the Contested Work. As a result, the Court finds that Helprin has met his burden to state a claim with regard to breach of contract based on rejection of the Contested Work.”

Still, from a practical perspective, while this ruling and the line of cases that it followed require a publisher's editorial input for valid rejection of a manuscript, per the publishing contract language, a publisher nevertheless retains the right to determine how much editorial input is needed before a rejection is made.

(The district court went on to decide, among other things, that Helprin's fraud claim based on an alleged failure to spend contractual amounts to promote the first book under the deal with HBJ was duplicative of the breach of contract claim on the matter. The court also held that because the contact didn't specify a date by which such promotional funds must be spent, additional briefings by the parties were necessary to determine whether Helprin's breach of contract claim was barred by New York's 6-year statute of limitations for contract claims.)

What constitutes an acceptable book manuscript has been at the heart of numerous disputes between authors and publishers. An acceptance clause in a recent dispute stated:

A Work shall be “acceptable” under this Agreement if such Work meets a standard comparable to the literary merit of Author's previous works.

In this case, internationally known author Mark Helprin signed a five-book deal containing a $2 million advance with Harcourt Brace Jovanovich Inc. (HBJ) in 1989. In 1995, HBJ published “Memoir from Antproof Case,” Helprin's first book under the contract. Helprin submitted the draft for the second book in October 2002. Two months later, HBJ's president wrote Helprin that the manuscript was unacceptable. Helprin filed suit in U.S. District Court for the Southern District of New York alleging in part that HBJ's rejection of the second book amounted to breach of contract.

HBJ moved to dismiss, contending that Helprin was barred from filing suit by Paragraph 8 of the publishing agreement that stated “if a Work is not published within the time provided in Paragraph 6 [ie, within 18 months after delivery and acceptance of the final revised manuscript] … Author may thereafter request Publisher by written notice … to publish such Work within six months after Publisher's receipt of Author's request. If, after receipt of such notice, Publisher fails to publish such Work within such period, this Agreement will terminate with respect to such Work immediately and automatically at the end of such period, all rights to such Work will revert to Author on the effective date of termination without further obligation or liability on the part of Publisher, and Author will have the right to retain any advances previously paid, but will be entitled to no other compensation, remedy, or damages, and Author will retain the right to sell such Work to another publisher and retain the proceeds. Publisher's failure to publish a Work that it has accepted according to the provisions … hereof will not alter the conditions under which Author is deemed to have satisfied his obligation in regard to such Work.”

Under HBJ's reasoning, despite rejecting the manuscript, the book was acceptable for purposes of these provisions because Helprin claimed in his suit that the manuscript met the terms of the contract's acceptability clause.

The district court rejected the argument, noting, “A contract provision cannot be read to have been fulfilled simply because, in a pleading and without more, one party says so.” Helprin v. Harcourt Inc. , 277 F.Supp. 327. But the Manhattan district court also noted that New York courts facing similar fact patterns have ruled that a publisher can terminate a contract with an author if the publisher, in its sole discretion, determines that a manuscript is unsatisfactory, “provided that the termination is made in good faith, and that the failure of the author to submit a satisfactory manuscript was not caused by the publisher's bad faith.”

The court then looked at additional language in the acceptability clause of the HBJ contract that stated: “Publisher recognizes its obligation to give editorial assistance to Author in order to assist [him] in making the manuscript of each Work hereunder acceptable for publication by Publisher. However, Publisher reserves the right to determine the amount and usefulness of its editorial assistance and whether or not its editorial intervention will result in an acceptable manuscript that merits publication by Publisher.”

Helprin claimed that the rejection letter he had received from HBJ stated only that his manuscript was unacceptable. That prompted the district court to refuse to dismiss the breach of contract claim. According to the court, “There is no indication at this stage from either party that Harcourt offered any further editorial comments or assistance, nor has it been alleged by either party that Harcourt allowed Helprin an opportunity to cure whatever defects Harcourt found in the Contested Work. As a result, the Court finds that Helprin has met his burden to state a claim with regard to breach of contract based on rejection of the Contested Work.”

Still, from a practical perspective, while this ruling and the line of cases that it followed require a publisher's editorial input for valid rejection of a manuscript, per the publishing contract language, a publisher nevertheless retains the right to determine how much editorial input is needed before a rejection is made.

(The district court went on to decide, among other things, that Helprin's fraud claim based on an alleged failure to spend contractual amounts to promote the first book under the deal with HBJ was duplicative of the breach of contract claim on the matter. The court also held that because the contact didn't specify a date by which such promotional funds must be spent, additional briefings by the parties were necessary to determine whether Helprin's breach of contract claim was barred by New York's 6-year statute of limitations for contract claims.)