Every once in a while, I'll set a contract in front of an author, and he or she will say, "Just tell me where to sign." I have to explain that they need to know what they're signing. The fact is, every clause in a contract can be deemed important, if you consider it's a legal document that will govern everything about your book for as long as it's in print. So let me offer several questions an author ought to think about...
1. What's the grant of rights? Your contract should ask you to grant specific rights to the publisher. Not "everything, always, in all circumstances." And rights not specifically granted to the publisher are to be retained by the author. Keep in mind that you (as the author) own the work -- you're granting a license to a publisher for them to produce and sell copies of your work. So understand what you're granting them.
2. Is the wording clear? Know what you're signing. Understand the due date, the word count, the rights being granted. Some publishers have exceptionally easy-to-read contracts (Baker, Harlequin, and Harvest House are three that come to mind). Others can have contracts that read as though they were invented by lawyers for whom English is not their first language. If you don't understand what you're signing, ask questions. And let me offer a word of advice: If you have an agent, he or she ought to be able to explain what you're signing. If you don't have an agent, you can get help from a contract evaluation service, which will charge you a couple hundred bucks to review your contract and suggest changes. [You can also have a contracts or intellectual property rights attorney review the contract, but DON'T have him or her negotiate it for you. The moment they pick up that phone, the clock is ticking...and the longer they can keep the clock ticking, the more you're going to pay.] You can also find some books at Barnes & Noble that will help you understand your contract.
3. Is there added work? Sometimes a book contract will also ask you to create something else -- study questions, additional material for an enhanced books, etc. Read the contract carefully to see if you're on the hook for an index, a bibliography, or a map to the star's homes.
4. What is acceptable? Make sure your contract offers you the chance to revise an unacceptable manuscript in order to make it acceptable. That's usually pretty simply -- the editor tells you what they want, and you, as the author, have adequate time to fix the book. Some larger houses wait until the book is completely edited and proofed before they consider it "acceptable." And some smaller houses have been know to withhold "acceptance" until, um... well, until they have the cash in hand to pay for it.
5. Who owns the copyright? A contract should state that the book's copyright will be in the author's name, not the publishers.
We'll look at some more questions you should ask when signing a contract -- feel free to drop in your questions and comments in the "comments" section!