What to Look For In a Literary Agency Contract

Today, we continue the #Publishing Law for Writers series on literary agents with a look at agency contracts.

When a literary agent offers a writer representation, the agent should also give the author a contract that governs that relationship. In most (if not all) U.S. states, the law requires an agency relationship of this nature to be documented in writing. Even if the law did not require a written contract, both agent and author benefit from a contract.

Contracts clarify the parties’ rights, duties, and obligations, and avoid ambiguity. 

Sometimes, authors find contracts “scary” or “too formal”–but publishing is a business, and you need to become a professional if you want a writing career. Publishing professionals use contracts to document and establish the terms of business relationships, including agency. 

Without a contract, certain critical aspects of the agency relationship may remain unclear or subject to dispute. By presenting an agency contract up front, the agent is documenting the legal relationship and the associated expectations. 

To many authors, it seems strange to document such a personal relationship with a written contract. In reality, the contract makes the personal part easier.

Although we can’t cover every aspect of a literary agency contract today, here are some important things to look for in agency contracts:

1. The Contract Term & Termination Procedures. Most agency contracts last “until terminated” and allow either side to terminate (with special provisions for works on submission or sold before termination). Normally, the agent continues to receive commissions on works sold during the contract term (even after termination) until the end of those contracts. Normally, the agent also receives commissions on works submitted to publishers before termination and sold on the basis of those submissions.

2. The Covered Works. Some agents represent authors on an “all works” basis, while others prefer to contract on a work-by-work basis. The contract should state, clearly, which of the author’s works are covered; if not all book-length works, the contract should also state how the author and agent will decide which works will be covered in the future.

3. The amount of the agent’s commission, and any variations in commission amounts. Legitimate literary agents do not charge fees, and are paid a percentage of money the author receives when the agent sells the author’s work. (Here’s a good article about fees and why they’re inappropriate.) The current industry standard for literary agent commissions is 15% of the author’s receipts (before taxes) on domestic sales, and 20% on foreign and subsidiary rights. The higher percentage on foreign and subsidiary rights is because these sales often involve the use of sub-agents or specialists who associate with the primary agent for these sales.

Note: Authors sometimes feel that agents “aren’t worth” 15-20%, but most successful traditionally published authors will tell you otherwise. If you plan to self-publish, agents probably aren’t necessary for you (you’ll still need a lawyer for contract review, however), but if you publish traditionally, an agent generally spends hundreds, if not thousands, of hours working on the author’s behalf. Agents spend hundreds (or thousands) of hours working for clients. The bulk of that is early-career work, where pay is low. Many times, agents make less than minimum wage until (and unless) the author’s work breaks out or until the author has many works in print.

4. The contract should state that the author has the right to approve (or reject) all contracts before acceptance. 

5. What, if any, commissions the agent is entitled to receive after termination of the contract. (As I mentioned earlier, it’s normal for agents to receive commissions on projects sold during the agency term even after termination of the contract.) Also, the author should be able to request a list of submission dates & editors to whom unsold works were submitted before termination. This way, it’s clear when commissions are due (or not) if the work subsequently sells.

Without a written contract, some or all of these terms remain ambiguous, which means that in the event of disputes, the author is not well protected. Also: the agent is unprotected. A solid contract protects both the author and the agent.

People often underestimate the importance of contracts when starting a business relationship, because everyone gets along at the beginning. Don’t make that mistake.

(Also: if you have an agent, but no written contract, it’s never too late to put the agreement in writing. Talk with your agent about putting a written contract in place to protect you both.)

On Twitter, I always end my stream with a picture of one of my seahorses, as a palate cleanser. Starting today, I’m doing that here as well:

16D06 Magellan

Have a great week!