Author/Agent Contracts--A Cautionary
Tale
We find surprising the number of people who
correspond with us on
the subject of contracts between agents and
authors. And given these litigious times it is necessary for us to say
now what we say when we’re asked these questions.
We aren’t lawyers and this isn’t legal advice. What we know about - and
are discussing here--is custom and usage
in the literary agent business.
Until very recently it was understood, even among those newest to the
writing fraternity, that most agents do not
make contracts with the writers on their client list. The exception to
this rule has always been the huge agencies,
the ones we call the hydraheads, where literary representation is
merely part--often a small part--of what they
do. ICM, William Morris, CAA, IMG and their like have always been known
to make contracts with those for whom they
act. Such agreements speak to the nature of the representation being
offered, what it covers and what it does not.
A few of the more standard author’s representatives have used and
continue to use similar instruments, but they
are a decided minority. The chief reason being that for a purely
literary agency, whether a one person shop or
an outfit that includes a number of agents, the issue of what is being
offered requires little in the way of clarification.
The client brings a manuscript to the agent. The agent reads it, makes
a judgment about whether or not it can be
sold, and either agrees to try and do so, or in one or another manner
says thanks but no thanks. So far, in the
traditional way of doing things, no money has changed hands and there
is therefore no need for any kind of document.
About the only important thing it could speak to that is not already a
matter of record in the agent’s published
materials is how long the pair are going to remain author and client.
Such an agreement has never been tested in
court and most people--particularly successful people--couldn’t be
bothered trying to hold onto a business relationship
where one or the other really wanted out.
So the issue remains the book in hand, the product for sale right now,
and in that matter the writer, by employing
the agent, automatically steps away from the procedure. As soon as any
revisions the agent suggests and the client
agrees to are complete, the process is entirely in the hands of the
agent. She is protected by virtue of that control.
The writer is protected by the existence of very strong, easily
enforceable international copyright laws that kick
in virtually from the moment the words are written on the page. There
is also the fact that neither agent nor author
are going to make any money until the book is sold. Where there is no
money at issue, why do you need a contract?
Hold onto that fact, because we’re going to come back to it.
For the moment let’s go on to the time when the book is sold to a
publisher. Now you have a contract. It is many
pages long and laden with whereas and however and all the usual
legalese. In essence, that agreement has nothing
to do with the agent. It is between the author and the company who are
going to print and market the book. The
literary representative, the person who brokered the arrangement, is
however completely covered. In a clause of
that author-publisher contract she, the deal maker, is stipulated as
the agent of record. That proportion of the
book’s earnings which belong to her are clearly specified, and except
with the written agreement of all parties,
those terms cannot change as long as the life of the book is controlled
by that particular contract. In other words,
not unless and until the rights revert to the author. (The when and how
of rights reversion is a subject for another
column, and like all contractual terms it can vary.)
As soon as the book has been put into the hands of the publisher, they
will be responsible for editing, printing,
distributing, marketing, promoting, and collecting the earnings of the
work. And as the agent of record clause
in the contract stipulates, the publisher will pay all the
earnings--beginning with the first penny of the advance
and ending with the final dime of the last royalty statement--directly
to the agent. She will take her legally
agreed cut (as stipulated in the contract between author and publisher)
and forward the balance to her client.
Sometimes, in a far less usual arrangement, the publisher will divide
the take according to the contractual terms
and mail a check each to agent and client, but this usually occurs as a
result of the author having left the original
agent--who remains the agent of record for the book she sold--and not
wanting to have further dealings with her.
(A subject for yet another article.)
So far it seems obvious that neither agent nor writer require a
separate contract to spell out their mutually agreed-to
obligations. The big issue, the money maker, involves selling the book.
Until that happens, what’s to stipulate?
Who’s going to handle foreign rights? That comes up in the
publisher-author contract and is in fact a topic of
intense negotiation. So too the dramatic rights. And the electronic
rights. And the rights to make beanie babies
out of the major characters and market them from Tajikistan to
Tallahassee. And any other possible profit opportunities
anyone can think of related to the work the author has created.
All these issues are part of the deal painstakingly hammered out
between publisher and agent and signed by the
author. By the time they kick in there is a contract governing their
disposition. No agent would try to determine
them beforehand. They are negotiable issues, and they may well be
different in the case of each book the agent
sells for the author.
If you think about it, you can come up with a few other items involving
money. Copying costs, for example. Agents
make a number of submission copies of the ms. Maybe as many as six,
possibly even a dozen. That’s a couple of hundred
bucks. And there’s the agent’s postage, and her telephone and fax
bills. Once the book is being marketed abroad
those might be significant. What about the agent’s office rent, or the
salaries she pays any clerical staff? How
about the suits she has to buy to make a good impression on the
publishers she’s going to be meeting on the writer’s
behalf? And hey, don’t forget her childcare. Someone’s got to look
after her kids while she’s running around selling
the writer’s prose, right?
Are we descending to the ridiculous here? You bet. Deliberately so.
These expenses are real, but they are the agent’s
cost of doing business. Often in the original discussions between the
agent and the potential client the agent
will mention that she passes through copying charges and long distance
postage. Or telephone costs. Whatever. It
will be the most casual of remarks and the deductions won’t kick in
until the expense is incurred and the agent
can show the writer a third-party bill. More likely they won’t be
mentioned until after the first check arrives
from the agent. Then there is likely to be a statement showing any
monies held back for those previously agreed-to
passed through charges. But in no instance--with a legitimate
agent--will they be significant as a percentage of
the money due the writer.
It should now be obvious what is involved in the vast majority of these
agent-author contracts being so liberally
dumped into the post office boxes of the land. Upfront fees. There are
undoubtedly exceptions, but in the main
the agents who want to offer you a “contract to represent you” are
doing so for the precise purpose of spelling
out what you are legally going to owe them, regardless of whether or
not they sell a single word you’ve written--much
less sell it to a legitimate publisher.
Agent-author contracts have come into being as a result of the
proliferation of the pseudo agents. Having such
an instrument shoved under your nose--rushed to you by priority mail in
many cases--should be one of the first
tip-offs that you may not be dealing with the real thing. As we tell
those who write us about the contract they’ve
just been offered by Agent X, proceed with extreme caution.
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