There are many clauses in publishing contracts that can be confusing to a first time author and that need clarification. Most of these can be negotiated by the agent (on the author’s behalf) and the publisher.
The one clause, though, that can be truly disturbing is the “acceptability clause” because it states that the sole decision as to whether a manuscript is acceptable or not is the publisher’s.
Usually we are able to get an addition to the clause that says that if the publisher finds the manuscript unacceptable, it must provide the reasons in writing and give the author the opportunity to make the requested changes.
Most of the time (I estimate over 95%), the publisher and the author work out their differences and the book is published. There are occasions, however, when publishers arbitrarily decide, for whatever reason, that they no longer want to publish the book they have contracted for and they reject the delivered manuscript and demand that the author return the advance already received. In that case, if the author refuses to return the money, the publisher will not release the author from his or her contract, thus preventing a future sale of that project.
Sadly when this happens, the only recourse an author has is to seek legal counsel, which is expensive and which does not guarantee that the author will win. Still, the publisher generally doesn’t want the bad PR a lawsuit would bring and so an author taking this route—in an extreme situation—might, in fact, either get his or her rights back or the publisher might decide to publish the book after all.
The bottom line here is that the acceptability clause is an important one and should be taken very seriously by everyone. Authors are required to deliver their manuscripts on a certain date. If an extension on the delivery date is necessary, authors should notify the publisher that they will be late, why they will be late and, on occasion, show progress on the work they are doing. Extensions are usually granted unless there is a timeliness factor due to the subject matter of the book.
Looking around for a comprehensive piece on the acceptability clause, I found this from my agent colleague Richard Curtis’ blog. It covers the subject very well and it’s worth reading, especially by first time authors.