“Victoria, thanks for sharing this info about termination clauses. Can you tell us what other things should be covered by an author-agent contract?”
From an author’s perspective (agents may feel differently), here’s what I’d want to see covered.
The scope of representation. What’s being represented. Contracts can be for a single project, all the author’s works, or for whatever works the author and agent agree on (that would be my choice.)
The duration of the contract. Some agents use time-limited contracts–a year, for instance, renewable either by mutual agreement or automatically unless the author or the agent decides to terminate. Others use open-ended contracts–you’re represented until you or the agent say otherwise. The latter is my preference. It’s easier–no worrying about renewal–and it’s more in keeping with the long-term relationship you’ll hopefully be establishing with your agent.
As I mentioned in a previous post, be wary if the contract is for six months or less.
Commissions. Commission percentages should be clearly spelled out, including split commissions and the use of co-agents (agents often use co- or sub-agents to sell in markets where they don’t have contacts or expertise–foreign countries, Hollywood. The agencies split the commission, with the commmission being higher to ensure that each agency is adequately compensated). Standard commission percentages are 15% for domestic sales and any other sales the agent makes directly, and 20-25% for co-agented sales. (There are some exceptions. A handful of successful agents charge 20% domestic to newcomers, and some agents want 30% for co-agented sales. This isn’t the norm, however.)
Note that the higher commission should be charged only when a co-agent is used. Where the agent direct-sells to overseas or dramatic markets–as larger agencies are increasingly doing–the commission should still be 15%. Many inexpert agents want to charge 20% across the board for any and all foreign or dramatic sales. Of course that’s a moot point, since an inexpert agent is unlikely to sell your foreign rights. Still, something to watch for.
Beware of agents who only charge a 10% or 12% commission on book manuscripts. I think there may be one established agency that still does this, but in most if not all cases a low commission is an inexpert or fraudulent agent’s ploy to try and hook you with a “bargain” rate so you’ll feel better about paying an upfront fee.
Reimbursable expenses. Reputable agents don’t charge upfront fees, retainers, deposits, etc., etc. You already know that. However, most agents do expect their clients to bear some of the cost of submission–postage, photocopying, Fed Ex, long distance phone calls. These should be clearly defined in the contract, as well as how they’ll be reimbursed–ideally, accrued and deducted from your advance; less ideally (and less typically) billed as they’re incurred. It’s also a good idea to have a cap for any single expense (say, $50) beyond which your permission must be sought.
(A cap on a single expense isn’t the same as a general expense cap, where the agent tells you he’ll spend no more than $75 per month or $500 per year. Where you see wording like this, beware: the agent may use it like a blank check.)
How money will be collected and disbursed. The publisher pays your agent; your agent deducts her commission and any expenses and forwards the balance to you. (This arrangement is formalized in the “agent of record” clause of a publishing contract.) The procedure for this should be clearly stated. Ideally, it should conform to the AAR’s Canon of Ethics–authors’ money should be deposited in a separate account, and payment should be disbursed no more than 10 days after the publisher’s check clears. Some agents just say they’ll disburse “promptly” or use a different time period such as two weeks–that’s OK too, as long as you’re sure they’re reputable.
Speaking of the agent of record clause, here’s something to watch out for: the so-called “perpetual representation clause” in a publishing or author-agent contract, whereby the agent designates himself “the sole and exclusive agent with respect to the work for the life of the copyright.” Your agent should be the agent of record for the life of the publishing contract only.
A termination clause. Whether your contract is time-limited or open-ended, you (or the agent) should be able to terminate it at any time, for any reason, with adequate notice. NEVER sign a contract without a termination clause, and be wary of contracts that place limitations on your ability to terminate–for instance, an excessive notice period (90 days or more), or a demand that you show cause.
What happens after termination. After you sever a contract, an agent will continue to collect commissions on any contracts she brokered for you. She’ll also usually claim a commission on any deals that were in progress at the time of termination, even if the deal is concluded after you’ve parted ways, and also, often, on any deals that result from contacts she made for you, even if those deals post-date termination. All of this should be spelled out.
Beware of unreasonable demands: claiming commission on “successor” works–for instance, a sequel to a book your old agent sold–even if the agent has nothing to do with the sale of that work; claiming commission on anything you sell for a period of years after termination, even if it’s sold through a new agent; claiming commission on any deal you make with a publisher the agent contacted, even if it’s for a different manuscript. These are all terms from actual author-agent contracts that I’ve seen.
What happens on the agent’s death, disability, or bankruptcy. How will your work be represented and your royalties paid if the agent dies or liquidates his business? Ideally, you should be able to terminate your contract at once, and instruct publishers to pay your royalties directly to you.
Other things. Language stating that all contracts or licenses are subject to your approval; a non-assignment clause stating that the rights under the author-agent contract can’t be assigned without your approval; language binding the agent to provide at least an annual accounting, with a Form 1099.
That’s it. Oh, and to keep my favorite Law Shark happy: since I’m not a lawyer, the above shouldn’t be construed as legal advice, but as commentary based on experience and research.