Calculating Loss And The Breakdown of Contractual Obligations: Trickier than You Think

November 9th, 2004 · No Comments
by Booksquare

We haven’t given the Penguin UK warehouse troubles sufficient attention. Normally we’d blame the weather, but, well, darn it, it has been cold and rainy this year. Very perplexing. We do regret our lack of care and attention to this issue because the story is fascinating on so many levels. In order to catch everyone up, we will do a high-level summary (if it’s details you want, the Internet is filled with them): due to a new system that didn’t work, bad things happened at the warehouse. The books suffered. They always do.

They do not blame Penguin’s staff for the problems in supply, which were largely caused by its corporate parent Pearson. But many have seen their royalty cheques cut in half, as crucial backlist titles have slipped off the shelves. The authors would like Penguin to bump up royalties; the publisher refuses to admit legal liability, for fear of a flood of claims. The meeting ended in stalemate, with another scheduled for January. An aggrieved agent or author may yet launch a legal challenge, but Penguin hopes that if it can turn things round early next year, such threats will fade.

Well, you might say, that seems fair. One doesn’t get paid if one doesn’t work — and, surely, the authors shouldn’t lose out if the publisher fails to ship books in a timely manner (or fails to ship books at all). Yes, yes, we agree, of course that’s right, but how does one determine the value of the loss? What form of measurement could be used? Do backlist sales remain steady from year to year, or do they decline (or rise) in a predictable manner? For newer titles, how many of the books that theoretically would have shipped been (we suppose, theoretically) returned?

One might see how we weren’t tapped for the debate squad. So easy to ask the wrong questions, leading to tangents. That loss was incurred is beyond question. This is a breakdown in the contractual arrangement, though we don’t recall seeing much in the way of the publisher’s obligations (and penalties for failiing to meet them) in author agreements. Darn it, now we’re all worked up and feeling the need to go out and do some serious research on the matter…

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