Roaylties on net?

I'm assuming you're asking for general information, not individual legal advice, so general info is all I'm giving

Net should definitely be defined if that's the basis for royalties, especially since there isn't an industry standard for it. In some businesses, it might be common knowledge what "net" includes (i.e., general overhead or just specific items clearly linked to a given product and what type sof expenses are generally incurred), but that's not true of publishing, where it's much more common for payment to be based on the gross (retail) price.

Without a definition, and without any industry standard to refer to, a contract that simply provided for payment of X% of the "net income" might well be subject to a claim that there was no meeting of the minds, and therefore no contract.

On a practical note, I can't even imagine the headaches in trying to do this. It's one thing if the royalties are based on X% of the amount collected from a distributor (which is common, as I understand it, for epublishers that list books with fictionwise, etc., so the royalties from books sold at the epublisher's own website are X% of the cover price, and the royalties from books sold at a distributor's website are X% of the amount fictionwise pays to the publisher).

It would be quite another thing altogether if overhead was factored into the "net" (how and who would decide how much overhead should be attributed to a given book; and this is absurd anyway, b/c the overhead should come out of the publisher's share of the income, and if the royalty rate is too high to cover their overhead, then the business model is messed up somehow), along with, say, advertising (if there's an ad by the publisher for just one book), and the cover art, and whatever other book-specific expenses might exist.

My head hurts just thinking about it. If all they're saying is that if they list the book with a distributor, and the distributor takes a cut, then royalties are based on the net after the distributor's cut, that's easy enough to write into the contract. But to leave it as an open-ended "net," would make my legal hackles rise.

JD