Anytime you are considering collaborating with another writer on a project, realize that the first step after deciding to go ahead, is to write up a contract between the two of you. This is essential whether the collaborator is your mother, brother, sister, pastor or best friend. It does not have to be long, too formal, or prepared by a lawyer. The two of you can compose it together and then sign it. It needs to indicate how the byline will be written (co-authors, as told to, with, inside acknowledgment, or whatever); how the proceeds will be split (50/50, 40/60, or whatever), this applies to the advance, royalties and subsidiary rights; who has the final word on disagreements; who is responsible for what part of the writing or research; how and when the contract can be terminated (usually by either party on 30 days written notice); as well as anything that may become an issue with this particular book. Anticipate any potential problems ahead of time and include the solutions to those in the contract.
The contract should also indicate what happens if the collaboration is terminated before the book is completed. Is the person initiating the termination entitled to any remuneration or a lesser percentage of the royalties? What if the termination is by mutual agreement? Who is entitled to go ahead and complete the project? Always prepare the contract to cover the worst-case scenario. For example, I worked with a co-author for two and a half years before deciding the partnership was not going to work. I backed out of the collaboration agreement, but because of the time I had invested, the contract with the publisher indicated that I still got 20% of the other author’s royalties.
If you plan to do subsequent books with the same co-author, you will want to have a separate contract for each project. When doing more than one book with a collaborator, it usually works well to alternate which one of you will have the final work on each project. When preparing each new contract, be sure to resolve any problems that have come up earlier and have solutions for those reflected in the new contract.
When collaborating, a publisher does not care what the arrangement is between the two authors. You simply tell them what the arrangement is and they will write it into the contract as you dictate.
Note: It is also a good idea to have a simple contract with other people involved in the preparation of the book—such as an editor you might hire to edit the book before submitting it to a publisher. I spoke with an author recently who hired an editor for a final edit, and paid him as agreed. When she then submitted the final manuscript to a publisher, that editor insisted he was a co-author and wanted his name on the contract. A contract with the editor (which she did not have) would have clarified his role in the project.