But since each statement that is assertedly incorrect creates its own statute of limitations, in theory then the publisher has a very long tail period from each statement. And in the most outrageous of cases, there may be different statutory limits placed on the right to sue for fraud. This fraud may not become apparent for a long time since fraud, to be proven, often requires a showing of a pattern of behavior and that may not come to the surface for many years worth of statement. Additionally, it is possible that upon an examination of a particular royalty statement that may be the subject of a claim during the statutory period, information is discovered that exposes previously unexposed accounting errors in statements that may have had their statute run i.e., statements that go back to times before the applicable statute of limitations. In such an event, the publisher in truth may have to retain statements for many years beyond the statutory period.
Few publishers have garages large enough to hold many years worth of records.
So these shorter periods of limitation on the author's rights are designed to create some final accounting between the parties, at least as to the older statements. And the author must conduct the examination within the parameters of this contract provision or run the risk that statements that go back further than the clauses' coverage may be barred. There are potentially a great number of areas of unreported or misreported sums that may be due the author. Let me cover just a few. The publisher reports actual returns which are reductions of the royalties due.