In last week’s post (How to Avoid Common Agent Contract Missteps — Part 1), I discussed the first mistake to avoid when considering an agent, plus a number of ways an agent can benefit a writer’s career. This week, I will detail concepts that should be included or avoided in a typical contract between an agent and a writer.
Mistake 2: Agreeing to an Agency contract that pays an Agent advance fees, “reader fees” or other sums up front instead of, or in addition to, a commission
Good Advance Versus Bad Advance
Would you pay a real estate agent a commission before they find a buyer for your house? Of course you wouldn’t. Don’t sign an agreement with an agent that calls for you to pay them before your manuscript is sold to a publisher and the publisher has actually made a payment to you (in the form of an advance or royalties).
Unlike a lawyer, or a real estate agent, literary agents do not go through rigorous training or even obtain an “agent” license before they can take on the role. Therefore, if someone who is calling themselves an agent, promises that a publishing deal is yours for the taking, but only if you pay a sum in advance to ensure your manuscript is fast tracked, do not fall for it. If you are tempted by such an offer, send me an email. I have “client” I want you to meet. He is a Nigerian Prince and he needs assistance transferring millions of dollars to the United States.
The agent should only take payment as a percentage of what you are getting paid. Their payment should never be paid in advance of you getting paid by the publisher. That kind of advanced payment to an agent is an entirely different concept from a publisher paying you an “advance” on royalties. The latter advance would be a good thing.
According to the Writer’s Legal Guide, 4th Edition, “the vast majority of literary agents charge a commission of 15 percent on all earnings from the works they represent; this is the industry standard and is reasonable. (If they use a co-agent for foreign or film/TV deals, they will take 20, or at most 25 percent, to be shared with the co-agent. . . . Most agents [also] require their clients to cover expenses associated with their representation.” 
While a commission of 15% might be easy to spot during your review of an agreement, make sure the expense reimbursement obligation is limited and, in any event, requires your consent prior to the agent spending beyond a set amount.
Typically all royalties due from the publishing contract will be collected from the publisher by the agent on your behalf. The agent will deduct their commission and expenses, then send you the remainder.
Mistake 3: Failing to Read and Understand all Terms of the Agreement
You don’t need a lawyer to tell you this, do you? Unfortunately, I cannot tell you how many times I’ve had new clients admit to me that they failed to read a contract until after it was signed and all hell had broken loose. For that matter, I’ve observed people sign very large promissory notes, secured by mortgages on everything they owned, without bothering to even check the basic terms. Don’t do this.
Eventually, an agent may be your biggest advocate in negotiating a great “publishing contract.” But before that happens, an agent will ask you to sign away certain rights (in the agency contract), in exchange for certain efforts to sell the book. Always read and understand what you are signing (this is true both with a publishing contract and an agency contract). If you read a contract and are unsure of what something means, have a lawyer review it.
An agency agreement will often contain a provision that gives the agent an “exclusive” right to represent a book or the writer. This language ensures that the agent gets her or his standard commission even if someone else (including the author) places the work with a publisher. In this regard, it is to the writer’s advantage, at least until the agent has proven their acumen at placing one book with a publisher, to limit the agency agreement to a single manuscript (rather than to grant the exclusive right to represent all of your works). Also, while it is typical for the agent to be given the exclusive right to represent a particular work, the agent should never be given an actual ownership interest in the work itself. If you see the right of agency paired with a right of interest in your work, be concerned.
Agreement length is not about the word count. By length, I am referring to the number of months (or years) the “term” of the agency contract will continue. This term is negotiable. The agent will likely want the agreement to last for a longer period of time than the writer. Since the contract will be exclusive as it relates to the particular work, a longer term of agreement will make it more likely the agent will get paid at some point (whether they find a buyer or someone else does). As the writer, you will want the contract to last long enough to give the agent a legitimate opportunity to sell the manuscript, but not so long that they don’t feel some pressure to close a deal sooner rather than later.
Even after an agency agreement expires, it is common for there to be a post-expiration sunset period of protection for the agent. This provision will ensure the agent is paid if the work is sold within a period of time after the expiration of the agreement (e.g. three months). This discourages an unscrupulous writer from waiting until the expiration of an agency contract and immediately selling the manuscript to a pre-arranged buyer without paying a commission to the agent.
Right To Terminate
While your agency contract will typically contain a fixed term length for automatic expiration following the signing of the agreement (e.g. twelve months), it should also contain a provision that allows you to terminate the agreement before the natural expiration if the relationship is not working well. At its best, an agency relationship is a collaboration. If the relationship is strained, sometimes the best choice is to end it. Often there will be a provision that requires a period of notice from the terminating party to the other. In almost any case it will likely contain a period of time where the agent will still be entitled to receive a commission following termination.
Don’t Be Afraid To Question What You Read In The Contract
One thing that I’ve learned to do over the past seventeen years in reviewing contracts is to pull out my red pen and freely revise those provisions that do not seem fair or do not make good sense. There is a tendency to assume that if a provision is in a professionally prepared contract, especially if the provision is printed in small boilerplate print, that the provision must be there for a good reason and never altered. While it is true that someone put that language there for a reason, oftentimes the reason is wholly based on what is best for the contracting party who drafted the agreement. If a provision in an agency contract has a funny aroma to it, don’t be afraid to question it or even strike it out before signing. If you do that, at a minimum, you will get an explanation from the agent about why the provision is necessary (from their perspective).
If you want to know more about agency contracts you will find additional material in the Writer’s Legal Guide, 4th Edition by Tad Crawford and Kay Murray as well as The Writer’s Legal Companion by Brad Bunnin and Peter Beren, 3rd Edition.
Please submit any questions or comments about this post below. I’d love to hear from you.
- The Writer’s Legal Guide, Fourth Edition by Tad Crawford and Kay Murray (Allworth Press, 2013), p.234. ↑
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