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What licensing terms should I discuss with a cover illustrator?

When dealing with famous book cover illustrators licensing terms must be discussed to clarify usage rights. Major points are: Is it a fully-owned work or limited license for the author? May the artwork be applied for marketing and merchandise? Is there any room for modification? Some illustrators retain copyright and give exclusive or non-exclusive rights for book use. A clearer contract allows both parties to know how the artwork can be employed and thus prevents any legal problems from arising in the future.