THE AGENCY AGREEMENT

IVAN HOFFMAN, B.A., J.D. 


        So you have finally found an agent to represent you and your work.  Congratulations!  And now the agent has presented to you his, her or its “standard” agency agreement for you to sign.  Let me cover some (but not all) of the important provisions of this agreement so that you might be in a better position to evaluate your choices.  (This article is written as though it was directed to the party being presented the agency agreement i.e. the “you” or “your” in this article and deals with a common situation in which “you” are an author.  Also, this article is not about any specific agency or any specific agent but instead presents issues related to agency agreements in general.)

         1. The scope of the representation.  Most often, you will be giving the agency the exclusive right to represent your work throughout the world.  This exclusive right generally involves the representation in all media and may likely cover all works you do during the term of the contract.  You may wish to have the agreement cover only the one particular manuscript as opposed to signing an agreement giving the agent the exclusive rights to represent all of your writing.  After the agent and you work together for some time, it may then be acceptable to sign some sort of exclusive deal covering more than one of your works at a time.

        Indeed, some agency agreements reach so far as to cover representation for works already in existence at the time the contract is signed.  In other words, you may be giving away representation rights to past works.

        Additionally, depending upon the reach of the agency, it may or may not be the appropriate agency to represent subsidiary rights in your work such as for movies, periodicals etc.   Many agents specialize in books, while others deal in movies, television and so on.  If you give the first agent exclusive rights for all media, then it may actually turn out that you are also giving the agent the right to find sub-agents to do the actual other representation outside of the book agent’s area of expertise.  And you may end up paying a higher overall commission in this arrangement than if you had separate agency representation for each of the separate areas such as books, movies and so on.  Ideally, you should limit the representation to those areas in which the agency specializes.

        2. Term of the Agreement.  The next point of which you should be aware is the term of the rights you are giving away to represent your work.  Usually there is some broad grant, such as for the duration of the copyright or for so long as income is received but you may be able to negotiate a “condition subsequent” clause.  This is a clause that says that, notwithstanding the term, in the event that the agency does not secure a publishing deal for the manuscript within a certain time, then the agreement is terminable by you.  This time, usually not less than 6 months nor more than 2 years, is negotiable.  What is important here is that you keep it short enough so that if the agent is not doing the job you expected, you gain back your rights before the manuscript has been shopped “all over the street” and is no longer a viable package that another agent can effectively represent.

        Additionally, there is often a clause that says that even if no deal is made within the term of the contract, if you or some other agent on your behalf makes a deal within, for example, 6 months after the termination of the agency agreement with some party that the first agent dealt with on your book, you owe the first agent commission.  This clause should be re-drafted to be very narrow so that you do not end up paying the first agent for work the second agent may have done and possibly ending up paying a double commission.

        3.  The Agent’s Accounts.  Many agency agreements provide that the agent is paid directly from the source, such as for example a publisher, and the agent then deposits the checks into the agent’s account and remits to you your share after deduction for the agent’s commission.  If the agent is to be paid by the source, the agreement you have with the source should provide that you and the agent get paid separately by that source and that the agent not receive funds belonging to you.   However, if the agent does receive all funds, you should make certain that the agent deposits the checks in a separate trust account and not the agent’s general account.  In that way, should the agent have a judgment against him or her, it would be difficult for any creditor would to execute on the funds belonging to the agent’s clients in the trust account.  Keeping them separated can protect both you and the agent.  Additionally, you should provide for a short time period, say 10 days at the outside, from the time the agent gets the check until the agent sends you your share of that check.

        4. Right to sign contracts and checks.  Few publishers will accept an agent’s signature on a contract but you should be aware that the clause giving the agent the right to sign your name on contracts may be in the agent’s agreement and you should have it deleted.  Additionally, you should be aware of the possibility that the agent might ask for the right to endorse checks payable to you and you should contractually prohibit the agent from doing so.  Frankly, not having this right is also in the agent’s best interest as well.  Instead, those checks should be made payable to the agent’s trust account and disbursed as above.

        5. Warranties.  Often, the author will be required to make similar representations and warranties as the author makes to the publisher about the author’s originality and ownership rights regarding the manuscript and so on.  This means that in the event of any breach of those representations and warranties, the author may be obligated to indemnify the agent in addition to the publisher.   These provisions should be deleted in the agency agreement.

        6. Commission.  Perhaps the most important point is the commission rate, which unfortunately tends to be the least negotiable.  Ten percent is usually the minimum except in unusual circumstances while 15% is becoming more in vogue.   As I mentioned above, in the event that you grant the agent rights to represent your work in areas they traditionally do not work in, they will ask for a higher percentage in order that they might engage a sub-agent to represent the work in those areas.

The Roles of Agent and Attorney

        An agent and an attorney are completely separate roles.  One is not mutually exclusive with the other.  An experienced agent can find opportunities to make deals that an attorney may not be aware of.  But an agent should not function as an attorney.  An experienced attorney is likely to find issues, based upon the knowledge and experience of the attorney, that can, in a given circumstance, be very significant.  In any contractual relationship, many, many things can go wrong and a contract should be thorough enough to cover as many of these potentialities as possible.  The very best attorneys are those who can think of the most potential disasters that can befall a client and then seek to structure the agreement to avoid those potential disasters.  Often these type provisions have been included in agreements for years and years without much thought being given to the provisions by any parties including agents.  (Read “Standard Contracts.”)   However, as indicated, these provisions can, in a given set of circumstances, become very important.   You do not want to be the test case where such a clause becomes significant and you are left with your legal pants down around your knees.  As but a single example, remember the “Tasini” case dealing with electronic rights in print publishing agreements that went all the way to the United States Supreme Court.  (Read “Electronic Rights: The Supreme Court’s ‘Tasini” Ruling.”)

        Remember the Hoffmanism, legal maxim: “It never matters...until it matters... and then it matters!”

CONCLUSION

        As indicated, these are only some but not all of the provisions to be aware of.  Consult an attorney with experience in these matters before signing any agreement including an agency agreement.   Again, read “Standard Contracts.”
 

Copyright © 1996, 1998, 2004 Ivan Hoffman.  All Rights Reserved.

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This article is not legal advice and is not intended as legal advice.  This article is intended to provide only general, non-specific legal information.  This article is not intended to cover all the issues related to the topic discussed.  The specific facts that apply to your matter may make the outcome different than would be anticipated by you.  This article is based on United States law.  You should consult with an attorney familiar with the issues and the laws of your country.  This article does not create any attorney client relationship and is not a solicitation.

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No portion of this article may be copied, retransmitted, reposted, duplicated or otherwise used without the express written approval of the author.

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