Specialist contract agencies, and consultants, can advise on such contracts and even offer a template. This section includes items which apply both to agents and to distributors, or to the one or the other, as specified. The aspects that are relevant to an agent apply equally to independents and to those cases where another publisher may take on publishers as agency clients, as described in Section 2: Gearing up for Export. If you are presented with a contract template by the other party, use the section below as a touchstone to ensure the template is fit for purpose.

The core elements to include are:

• Parties to the contract
• Definitions of terms within the contract
• Products to be covered and importantly clarity regarding the digital element as described above
• The territory
• Whether the agreement is exclusive or non-exclusive for that territory
• The term of the agreement: less than two years doesn’t allow it to establish itself, so 2-3 years is recommended, with the opportunity to renew
• Rights and duties of the parties: e.g. of the publisher, provision of sales and marketing material and sales data; of the agent or distributor, attendance at book fairs and sales conferences, market reports with a certain frequency
• For a distributor, discounts off UK retail prices to be granted to the distributor by the publisher, and the provision for exceptions that can be agreed on a case-by-case basis. If the supply is to be made on consignment (where the publisher supplies and continues to own the stock until it is sold by the distributor), the agreed percentage of revenue to be remitted to the publisher and after what period following the month of local invoicing
• Commission rates payable to agents expressed as a percentage of the sales in the territory. If any types of sale (such as special deals made by the publisher themselves) are to be excluded, this should be specified. If the amount due for a sale becomes a bad debt, it should be specified that the publisher will reclaim any commission paid
• For an agent, the level of freedom to negotiate non-standard pricing, and when the publisher’s approval will be required
• For a distributor agreement, the responsibility for paying freight charges from the publisher to the distributor: where the distributor purchases the stock, the norm is that the publisher will deliver free of charge to the distributor’s UK shipper, while the distributor pays the onward charges; in the case of consignment, the publisher normally pays freight to the distributor’s warehouse
• Any returns allowance by the publisher to the distributor: this is usually expressed as a percentage of the previous calendar year’s gross (i.e. pre-returns) purchases by the distributor from the publisher. In addition, it should be specified how the returned books will be physically processed: they may exceptionally be returned to the publisher at the distributor’s expense and at the publisher’s discretion if they want the stock and consider it worth requiring its return. Sometimes, returns will be destroyed in accordance with an agreed procedure of notification, publisher approval, and subsequent certification. Within this clause also lies the specifying of what the distributor may do in order to dispose of overstocks, with the written approval of the publisher. This is to allow the distributor to dispose reasonably of overstocks while preventing the flooding of the market, or even other markets, with low-priced stock. Such provision should also apply to Consequences of Termination, below
• The credit period to be allowed to a distributor: credit periods for international customers are longer, and discounts higher, than for home-market customers, because of freight times and costs. Although air freight is used, almost always by customer choice, it is accepted practice not to reduce credit periods for those consignments, since the customer is electing to pay the higher freight charges
• The process to be followed in the case of any breach of the contract, and remedies to be applied
• Notice period for termination or renewal: most often six months for either party
• Applicable jurisdiction: mostly this is UK
• Sales targets if mutually agreed
• Costs of promotion/marketing and how they are to be shared between the distributor and the publisher
• Exclusion of competitors: a publisher may specify competitor(s) not to be taken on by the other party, or request right of approval/rejection, or both
• Consequences of termination: for agents, reference has been made above to EU law. For distributors, this clause is vital in terms of determining and specifying what happens to the publisher’s stock. Many serious disputes have arisen because of poor stock management by the distributor, and a lack of contractual clarity. Normally, credit will be granted by the publisher in respect of any stock of current editions that is in mint and resaleable condition, as well as in respect of stock that falls within the agreed returns allowance. Responsibility for the remainder lies with the distributor. It is therefore up to the distributor to maintain prudent stock control and not build up quantities of unsaleable stock, but to take regular advantage of agreed returns allowances. This clause should include provision for the appointment of a mutually acceptable arbitrator in the event of a dispute, and agreement to accept the resulting arbitration
• Stipulation of what will transpire if either party goes into administration or is sold to a third party. Usually this will include the right of the party not subject to change to terminate the contract if the change of circumstances is in their view disadvantageous.