Literary Agency Agreements

November 17, 2010

A literary agent acts as an author's sole and exclusive representative in selling her work to a publisher. She has contacts in the publishing industry and usually specializes in particular genres. The standard agent's commission is 15%. This commission typically rises to 25% on sales of foreign rights through overseas agents, who receive the additional 10%, and on sales of performing rights (motion picture, dramatic, radio and television) when they are represented by specialized co-agents, who will also receive 10%.

The cautions in my Notes on publishing contracts apply equally to agreements with literary agents. Grant and reservation of rights, single or multiple book representation, subsidiary rights, distribution of royalties, termination and ongoing commissions are among the issues that should be clarified before an author signs an agency agreement. This Note is directed to the type of agency agreement that attempts to unfairly enlarge the scope of the agency and the agent's right to commissions.

In one agreement, the agent proposed the following : "After [the agent] has negotiated the sale of any of the rights to the Work, it shall be entitled to its commissions as stated above, regardless of when the sale or sales take place." The "regardless of" and "when" phrases are ambiguous. Commissions are paid from the advance before publication) and from royalties after publication. The agent agreed to delete the provision as her commission was protected by the "agency clause" in the publishing agreement which provides that all monies earned by the author are paid directly to the agent. The agent deducts her commission and expenses from the proceeds and remits the rest to the author within a stipulated period of time (usually not more than ten to fifteen business days).

With regard to termination the agency agreement should state clearly what the mechanism is and what rights survive. In Peter Lampack Agency, Inc. v. Grimes decided in October 2010, the literary agent claimed he was entitled to commissions on a work published after termination of the agency agreement because the publishing contract he negotiated for the author contained an option provision. The court ruled that since the option work came into existence only after termination of the agency agreement the agent was not entitled to any portion of the author's proceeds from contracts negotiated by a subsequent agent.

On the other hand, a literary agent may have a claim against an author who terminates an agency agreement and returns to the publisher to complete an agreement for which the agent started negotiations. Typically the agent will insist on a paragraph that defines her post-termination right to commissions. The following would be acceptable:

Within six (6) months after termination, should you enter into an agreement for a sale of rights to the Work represented by [agent] pursuant to this agreement with a firm to which [agent]formally submitted [the Work] and has been negotiating on your behalf prior to termination, that agreement shall be deemed to have been entered into during the term of this Agreement.