Q. My agent notified me she is retiring. She has submitted my latest novel to several publishers, but I have not yet received an offer. What happens if an offer is made? Do I still owe a commission to her?
A. Start with the general rule: an agent is entitled to receive a commission on royalties on publishing contracts she negotiated during the term of the agency agreement — even after the agency agreement is terminated – but NOT from royalties resulting from a publishing agreement signed AFTER termination of the agency. This means that if an editor to whom she sent your book makes an offer, you may hire another agent to negotiate the contract (or negotiate it yourself), even though it was through your original agent’s effort that the book was placed with that editor.
Now, for the exceptions, in order of likelihood. First, some agency agreements have a clause requiring you to pay a commission on royalties from publishing agreements made during a period of time after termination (usually six months), if the purchasing publisher had originally been solicited by your agent. This provision often is unenforceable because of poor contract draftsmanship by the agent, but any writer with such a clause should get a list of all such publishers from the agent upon termination .
Second, some literary agencies include in their agency agreements (or in the publishing contracts they negotiate) an “interminable agency” clause. Rather then limit their right to representation during the term of your agreement, such clauses grant the agent an exclusive, irrevocable right to represent your work for the entire term of those
works’ copyright. The agency will be entitled to a commission on your work even after it goes out of print from the deal the agent negotiated, and a new publisher republishes it. After your death, your executor would have to keep track not only of which of your works are still under contract, but will also have to determine whether an agency has an interminable right to represent any of your out-of-print works. Your agency may merge, dissolve, or change names, providing more complications for your executor. If you have such a clause, you should ask your agent to give you a written release from its terms.
Third, some agents use the phrase “agency coupled with an interest” in their agency agreements. This is a bit of legalese intended to make the agency relationship irrevocable (again!). Ordinarily, a principal (you) may terminate an agent “at will” (or at the end of a contract term), and the agency also terminates automatically on the death or disability of the principal. This clause, however, grants the agent the exclusive, irrevocable right to represent your works for the entire term of those works’ copyright. This means that even if you terminate the agency, and the rights to your book revert back to you from the publisher, you are obligated to pay the agency a commission forever for all future sales, even if the agency did nothing to cause that sale. It could even mean you would be paying two agency commissions, which could amount to thirty percent or more. This also would apply to your heirs. Again, if you have such a clause in your agreement, you should ask your agent to give you a written release from its terms.
Bottom line: read – and understand — your agency agreement.
Daniel Steven is Chairman of the MWA Contracts and Grievances Committee and a publishing and media attorney (www.publishlawyer.com). This column provides general legal information; consult an attorney for application of the law to your specific circumstances.
© 2006 Daniel Steven