What if my publisher loses my artwork?

Q. I write and illustrate children’s books. My contracts say that the publisher is “not responsible for the loss or damage of any material” submitted by me. That’s okay for my manuscript since I have a copy on my computer, but what can I do about original drawings and watercolors that I submit?

A. Publishers that still have such unqualified, antediluvian language in their contracts should be embarrassed (though I’m not holding my breath). What they presumably mean to say is that if something happens to your artwork that is not their fault (the building burns down, a messenger taking it to another location is mugged, etc.), they are not responsible. That may be acceptable to you. But if an employee takes a piece of your artwork home to hang in his living room or someone inadvertently uses it as a placemat when eating lunch at h/h desk, there is absolutely no reason why the publisher shouldn’t be responsible.

Virtually every publisher recognizes this and, if asked, will readily qualify the clause you quote with “provided Publisher has exercised reasonable care with respect thereto” or, at the least, “other than in the case of Publisher’s gross negligence or willful misconduct.” Although these—especially the first— can be okay, better yet would be “other than in the case of negligence, willfulness or reckless misconduct by Publisher, its employees, agents or freelancers.”

The reasons why this alternative protects you (and your work) more than the first two are:

  1. A “gross negligence” standard doesn’t provide you much protection. Essentially, it means a major foul-up—bordering on either incredible stupidity or intentional recklessness—and isn’t always that easy to prove. “Negligence” (without the adjective), however, is more likely to be the type of (mis)conduct that leads to the damage or loss of your artwork. Negligence is “the failure to act as a reasonably prudent person would under similar circumstances” or, briefly speaking, carelessness. Quite simply, the basic question involved is whether the publisher or you should bear the “risk of loss” for the carelessness of one of the publisher’s employees or freelancers. Even publishers who are intransigent on other issues should see the validity of your position if you phrase it this way.
  2. Although mentioning only “negligence” should suffice to encompass standards of conduct that are worse—such as recklessness and willfulness (negligence is by definition unintentional; recklessness, though often bordering on being intentional, is generally not either) —specifically mentioning willfulness and reckless misconduct alongside negligence should eliminate any attempt by a publisher’s lawyer to argue that negligence means carelessness only.
  3. Ordinarily speaking, referring solely to conduct by “the Publisher” should include any action (or failure to act) by its employees, freelancers and agents even if those groups of people are not listed in the clause we’re talking about. In some situations, however, a company might successfully argue that it acted with proper care in hiring the individual involved and, as such, is not responsible for certain acts by that person (e.g., ones that it could not foresee). Listing those groups of individuals in the damages clause should eliminate that possibility.

(Originally published in the Winter 2010 issue of the Authors Guild Bulletin. © Mark L. Levine

Answers to questions on this site are general in nature only. You should consult a lawyer for information about a particular situation. For more information about book publishing contracts and issues, see Levine’s book.

Should I set up a corporation?

Q. I recently set up a one-person corporation and assigned all my copyrights to it. Can the corporation sign my next publishing contract so I could avoid personal liability in the event of a lawsuit against the publisher involving my new book or a breach of any of the representations in the contract?

A. Doing that will not help if your publisher has even a modicum of business sense or, if lacking that, at least knows enough to consult a lawyer, either professionally or at a cocktail party. Although having a corporation or limited liability corporation (LLC) can be very helpful in insulating a person from personal liability if all the corporate and LLC formalities are observed, any knowledgeable publisher that permits the corporation or LLC to sign will also require you to personally guarantee all of its obligations under the publishing contract so you won’t be avoiding the problem. Anyone who sues because of something in the book would undoubtedly sue the publisher too and your guarantee would require you to personally reimburse the publisher if liability was found. In addition, people suing would likely sue both you and your corporation (or LLC) also and, since you wrote the book, it’s unlikely that you would avoid liability if liability exists.

There may be good reasons to establish a one-person corporation or LLC—e.g., income tax, investing for retirement or health care coverage—but you should check with your accountant, financial adviser or a tax lawyer to find out about those.

(Originally published in the Summer 2010 issue of the Authors Guild Bulletin. © Mark L. Levine)

Answers to questions on this site are general in nature only. You should consult a lawyer for information about a particular situation. For more information about book publishing contracts and issues, see Levine’s book.