The Agency Agreement

July 1998
by Ivan Hoffman, B.A., J.D.
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Ivan HoffmanIvan Hoffman (photo right) is a publishing, copyright, Internet law, recording, and music attorney as well as a published writer and author. He practices in the Los Angeles area. You may reach him at ivan@ivanhoffman.com or 818/342-1762.


So you have finally found an agent to represent you and your work. Congratulations! And now the agent has presented his or her “standard” agency agreement to you for your signature. Let me cover some of the important provisions of this agreement so that you might be in a better position to evaluate your choices.

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. If this is your first dealing with the agent, 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. This might be acceptable if you have some existing working relationship with the agent but you should be aware of the clause.

Additionally, depending upon the reach of that particular agency, it may or may not be the appropriate one 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 turn out that the agent has 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 areas such as books, movies, and so on. You should ask for the right to be consulted with regarding that sub-agency in the event you grant these rights away. 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 for representing 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 six months nor more than two 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 (the author) or some other agent on your behalf makes a deal within say six 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 a commission. This clause should be drafted very narrowly and carefully so that you do not end up paying the first agent for work the second agent may have done and possibly having to pay 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. 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 to tap into the funds belonging to the agent’s clients in the trust account. Keeping them separated protects 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. Agent’s 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 want to 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.

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.

Conclusion

These are some, but certainly not all, of the important areas of which the author should be aware when presented with an agency agreement. The agent agreement, as with other agreements, is negotiable within certain parameters. The author should know these parameters in order to be in a better position to protect his or her rights.

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