What makes a makegood contract a good one?

Here's the central premise: You're going to sell a product, but you're not going to make it yourself Thus, you take the risk that the manufacturer will make the product properly. Here's the central psychology: If the manufacturer does something wrong, and it isn't your fault, he is liable for everything that happens. Between those two notions dwells the principle of printing makegoods.

A printer's most treasured printing contract provision limits liability to the actual cost of the work performed. There is compelling logic for such a stipulation, since printers have no control over the value of the work produced. You set the cover price, subscription cost, and ad rates. The printer can mistrim an insert, for which one publisher charges $200,000 and another charges $20,000. Imagine that the insert is for Porsche and the advertiser concludes that he sold 20 fewer cars that month because of the glitch. Would your magazine then make up the lost profits?

Principle number one

Once you realize that the printer can't participate in your business decisions, you can identify areas in which his action might damage you and determine the appropriate remedies. The first principle is simple: Your price schedule should state the cost of work of acceptable quality. You are paying for results, not efforts, and your printing contract defines the quality of the work. When the work is not right, you do not pay for it, and the makegood credit is born.

Another remedy for defective work is more direct. Reprinting the offending pages before the faulty product is shipped suits your objectives better than a credit. The value of the credit is not as high as the desire for a correctly printed product. This is the moral test of a makegood: If the laws of space and time were repealed and your schedule could be maintained with reprinting, would you seek the cash or the correction?

Principle number two

The second principle of makegoods expands the printer's liability beyond his own prices. A true makegood of necessity includes paper and distribution expenses. Be wary of contracts that limit the printer's liability to the price charged for the work. The printer is the custodian of paper you supply, and he owes you good impressions on it. He also has a responsibility for your inserts and distribution costs.

You won't be able to write a contract provision that perfectly defines defective work. The first impulse might be to attempt an exhaustive list of potential problems, but lists can be exclusionary even as they struggle for comprehensiveness. Keep such a list illustrative only.

No matter how ad-driven you are, don't allow the contract to limit madegood credits to the value of a credit you issue an advertiser. First, editorial defects are just as real, and such a provision may actually eliminate claims for non-advertising pages. Second, by the same logic that the printer escaped consequential liability, you want to avoid tying your response to an ad complaint to the makegood claim.

When negotiating this contract point, the publisher must understand the printer's anxiety: When the language suggests that a single, ink-hickey allows you to write "cancel" on the invoice, you know you've departed from fair play. The scope of the credit must equal the scope of the damage.

Your contract isn't going to cover every scenario, but your behavior can set a tone of realistic expectations that encourages the printer to rise to the occasion when real tragedy strikes. Let's say your newsstand copies ship a week late, reducing your on-sale time by a fourth. The makegood provision does you little good because the work isn't defective - it just plain isn't there. A good contract will include a provision that permits termination in the event that defective work or late shipping occurs a certain number of times.

If you've nurtured a positive relationship with your printer, you will find him keen to fix the problem. Nothing obligates him to issue a credit, but much can motivate him to satisfy you. The printer's greatest interest in your relationship is that it continue. If you've shown a real commitment, a wise printer will do his best to make up your damages.

Alex Brown is president of Printmark, a magazine production consulting firm in Montpelier, Vermont.

COPYRIGHT 1996 Copyright by Media Central Inc., A PRIMEDIA Company. All rights reserved.
COPYRIGHT 2004 Gale Group