Letter to the Editor - Implications for authors facing breach of contract by publisher | Indranil De

Letter to the Editor, Mainstream

January 10, 2023

Contracting is a standard institutional means to acquire a specified service, of a defined quality and quantity, at an agreed-on price, from a specific provider. It reduced the transaction cost of service delivery. Transaction cost is the managerial cost attributable to limited information, uncertainty, and vendor opportunism. If the transaction cost goes down through contracting services, then the economic exchange would occur. This process may become inefficient, with high transaction costs shooting up due to opportunism from parties, even after formal contracting. In this context, it is worth analyzing the opportunistic behaviour exhibited by Sage India by suddenly announcing the closure of book publishing in the first week of August 2022.

Sage cited challenges posed by economic factors, including the same induced by Covid-19 Pandemic, for the decision on closure. They specified that the decision pertains to only books, not journals published from India or books imported to meet the domestic demand. They also mentioned that they would take utmost care in completing the ongoing book projects in India. The Smrithi Sudhakaran, Senior Manager-Marketing, SAGE Publications India Pvt Ltd mentioned “We are actively looking for a new home for our book titles and will make an announcement as soon as we are able. Meanwhile, our book publishing operation is active until the point we transition it. We are continuing to support our authors and keeping in contact with them through this process” [1]. What followed this is something to be considered.

Academic book publishing has a few stages which are similar across all reputed international publishers. First, the authors submit a book proposal to the acquisition editor of the publication house. The editor would review it, considering the importance of the work and its quality. If found appropriate, the authors would be given time to submit their manuscript. The manuscript is blind-reviewed by some external exports. If the manuscript’s quality is acceptable, the authors are asked to incorporate the reviewers’ comments and resubmit the manuscript. After a final review the manuscript is accepted for publication. By this time, the publishing house would have formally contracted with the authors for manuscript publication. One important stipulation in the contract is that the authors cannot submit it for publication elsewhere.

The publishers retain all rights of production, publication, advertising and price solely to themselves. If the manuscript submitted for publication is found incomplete for any reason, then both the author and publisher agree to complete it within a stipulated time. Publisher along retains the exclusive rights to cancel the agreement if some work remains incomplete. Sage India is now using this provision to cancel ongoing contracts that both parties had already signed, and authors have handed over all required documents. The authors accept the agreement in the first place, which is inherently biased, due to the sheer lack of alternatives. They tend to trust the publishers. Nevertheless, by using this small legal avenue, Sage Publications has violated the trust of the authors. On the contrary, in public, they projected a smooth transition.

This kind of use of a small provision to cancel the agreement has a devasting consequence for the authors. The authors put a lot of effort into developing and revising the manuscript. The whole exercise spans over months with intense efforts. In today’s academic world, publication is the sine qua non in all academic activities: doctoral thesis submission, faculty recruitment, confirmation of job and promotion. Hence, a sudden cancellation of a contract after monumental efforts is highly costly to academicians. It shoots up the transaction cost for the authors suddenly, making the contracts economically inefficient.

The publishers would try to retain more control over the contract as they bear the financial burden of publication. However, with higher authority and opportunistic behaviour, they defeat the basic spirit of contracting – reduction of uncertainty and transaction cost of an exchange. Although there is a provision of arbitration in the contract, they are, again, cost-intensive. The Sage Publications withdrew from the contract due to their failure, but by shifting a part of the cost to the authors. The authors were unaware of Sage’s economic conditions till the time of the announcement of closure was made. This moral hazard problem couples with negative externality in economic change. The cancellation of contracts may be legally admissible but unfair and inefficient.

your sincerely

Indranil De

Associate Professor in Social Sciences and Economics at Institute of Rural Management Anand (IRMA), India and editor of International Journal of Rural Management. The above letter epresses my personal views