Tuesday, December 11, 2007

Victoria Strauss -- The Interminable Agency Clause

An "interminable agency clause" (sometimes called an "interminable rights clause" or a "perpetual agency clause") is language inserted into an author-agency agreement whereby the agency claims the right to remain the agency of record not just for the duration of any contracts it negotiates, but for the life of copyright. In other words, once the agency sells your book, it has the right to represent that book for as long as the book is in copyright (currently your life plus 70 years).

Why is this a problem? Suppose you decide to move to a new agency, as often happens. If your old agency's agreement included an interminable agency clause, you might not be able to bring with you any of the rights your old agency sold for you, even if the contracts covering those rights had long expired. Those rights, which can sometimes be profitably re-sold (especially if you score a success with a new work) are one of the things that can make you attractive to a new agent. Also, why would you want to leave your rights sitting with an agency with which you no longer see eye to eye?

Or suppose your old agency doesn't have a problem with you taking your rights elsewhere, but because of an interminable agency clause claims the right to collect commissions on any future sales of work it originally sold for you--even if it has nothing to do with those sales. Why should an agency be paid for a sale it didn't make? Obviously an agency's right to commissions should extend over the life of any contract it brokers, but once the contract ends, the benefit of the agency's work to you also ends, and so should its right to commissions.

Many professional writers' groups warn against interminable agency clauses, including the Authors Guild, SFWA, RWA, SCBWI, and Novelists Inc.. According to the Authors Guild, "the minimal prospective benefit the clause provides is far outweighed by the inconvenience it causes authors and their estates and by the responsibilities that accompany the clause." In addition to the concerns identified above, the Authors Guild points out that your agency is unlikely to be around for the life of copyright, that changes in personnel and ownership may have an impact on skill and reputability, and that interminable representation can greatly complicate not just the task of literary executors, but also of the agency, which would need to track and enforce interminable rights.

This isn't a new issue. The Authors Guild warning was issued in 2004. But the problem isn't going away. Just today, in fact, an author-agency agreement with interminable agency language came across my desk--the eighth I've seen in the past year. Clearly, authors need to be on their guard. Trouble is, the language can be subtle enough that it's easy to overlook or misunderstand. Several of the authors who sent me contracts were aware of the warnings against interminable agency language, but still failed to spot it.

Below are some examples of the different ways in which agencies frame interminable agency clauses, with the dangerous phrases bolded. All are taken from agency contracts in my possession.

** "The Agency and its right to receive commissions hereunder shall be co-extensive with the life of the copyright of the Work and any renewals thereof."

** "At time of termination of Agreement, all Work(s) sold by Agent shall remain with Agent and Agent shall remain Agent of Record in perpetuity unless otherwise agreed to by both Parties."

** "In the event that any Rights are sold, licensed, or otherwise disposed of by [agency], Licensor agrees that [agency] shall be irrevocably designated the agent for those Rights to the Work for perpetuity."

** "The Agency is entitled to the above-mentioned percentages as specified...for the legal life of the Work on agreements pertaining to the Work."

** "Author grants to agents/representatives and assigns the sole and exclusive right of selling in book form the above work in the United States of America and its Dependencies and anywhere in the world during the full terms of copyright and any renewals thereof."

** "It is understood that if rights to the Work have been sold during the term of this Agreement, Agent's interest in the Work is irrevocable...In recognition thereof, and in such case, Author hereby acknowledges and agrees that, regardless of when made or by whom, any and all contracts or agreements...regarding the Work are covered by the terms of this agreement; [and] agrees to arrange for all such contracts and agreements, regardless of when made or by whom, to name Agent as Author's agent of record."

What should you do if you encounter this kind of language? Here's what the Authors Guild recommends:

The best approach is for agents to simply drop the clause. Agents who are determined to retain a contractual right to represent an out-of-print work could adopt a clause such as the one that follows:

"On termination of this [publishing] Agreement, Agent will continue to have the right to represent the Work and collect a commission for the placement of the Work provided that (1) Agent places the Work within 6 months of the termination of this Agreement and (2) Agent sought a reversion of rights on Author's behalf within 6 months of the time the Work was out of print as defined in this Agreement."

13 comments:

Anonymous said...

Hmmm. I considered myself aware of this and thought I reviewed my contract carefully, but now I can't tell.

"If X sells a Project to a publisher, X will be the agent of record for the Project's income-producing duration and will irrevocably keep 15% of all the Author's inocme relevant to such a project."

It goes on to elaborate that they will not be required to return any legitimately received commissions. I connected the "irrevocably keep" to that--because it doesn't say "irrevocably RECEIVE." And I interpreted income-producing duration to mean until reversion of rights.

Victoria Strauss said...

Obligatory disclaimer: I'm not a lawyer, so what follows isn't legal advice.

Your interpretation may well be correct--this isn't intended to be an interminable agency clause. But the language is certainly ambiguous. Speaking for myself, I'd definitely want to change the clause to make it clear that the agent would be agent of record only for the duration of the publishing contract.

I see another concern as well. By giving the agent the right to keep 15% of "all the Author's income relevant to such a project," the clause might entitle the agent to unearned income. An agent should receive a commission only on sales she actually makes. If the publisher retains rights and sells them (book club rights, for instance), the agent shouldn't get 15% of your portion of that income just because she was the one who sold your book to the publisher.

Here's how I might revise this clause:

If X sells a Project to a publisher, X will be the agent of record for the duration of the publishing contract and will irrevocably keep 15% of the author's royalties deriving from the contract.

By replacing "income-producing duration" with "duration of the contract," you remove confusion about timeframes. By replacing "income" with "royalties," you limit the agent's commission to that particular sale. You might also need to add something to allow for subrights sales, but without actually seeing the contract, it's hard to say.

The Grump said...

Thanks for the info on the "fine print" in contracts. -- I'd extend this to publishers as well as agents.

Legalese is always a problem. So, I have another question for you. Do you have a list of reliable literary lawyers who will review contracts independently?

Granted I'm a little spooked by the writers' strike, but it seems to me that writers of all ilks have suffered an erosion of contract rights over the years.

Victoria Strauss said...

I don't maintain a list of intellectual property lawyers, and I'm always dubious of these kinds of lists online, unless they're sponsored by a reputable organization. I'd suggest using Findlaw.com to search for an intellectual property attorney in your area.

Also, the Overview page of Writer Beware includes a section on legal recourse that provides links to a couple of low-cost consultation services, including Volunteer Lawyers for the Arts, which specializes in arts-related stuff.

Anonymous said...

Thanks so much for your input!

gregory ludwig said...

Here is language in Barbara Bauer's contract:

“If the relationship ends, the agent shall continue to be entitled to commissions resulting from sales originally made by her on monies received subsequent to the termination of the relationship, in accordance with the commissions provisions set forth above.

“In the event of the author’s death, the author so authorizes the Barbara Bauer Literary Agency, Inc. to continue to act as agent on behalf of his estate in the promotion and sale of any work and authorizes contracts to be signed by the executor/executrix or other duly designated party with any recommended publisher.”

In 2001, when I had my will redrawn up, I included a provision concerning how money would be handled if/when it resulted from sales of my book manuscripts, and made reference to the Barbara Bauer Literary Agency *or* other agent or agency as the agent involved at the time of my death. This allowed for BBLA to be considered out of the picture. At the time, Dr. Bauer wanted to see a copy of the provision and I sent it to her. All was OK for everyone involved. There was no perpetuity involved for her whether or not I died. And of course now there’s not.

It pays to be careful and resolved in dealing with such provisions. By the way, it was my lawyer who added wordage to designate some other agency than BBLA.

Victoria Strauss said...

If the relationship ends, the agent shall continue to be entitled to commissions resulting from sales originally made by her on monies received subsequent to the termination of the relationship, in accordance with the commissions provisions set forth above.

This is a standard provision, ensuring that the agent is able to receive commissions for the life of any contract he or she brokers, even if he/she and the author have parted ways. There's something like it in nearly all author-agent agreements (I've seen a few agreements from amateur agents that don't include it, presumably because the agent wasn't knowledgeable enough to protect his/her own interests).

In the event of the author’s death, the author so authorizes the Barbara Bauer Literary Agency, Inc. to continue to act as agent on behalf of his estate in the promotion and sale of any work and authorizes contracts to be signed by the executor/executrix or other duly designated party with any recommended publisher.

This is more unusual. I've seen similar clauses in some author-agent agreements, but also many that don't include a provision like this. To make it clear that, if I'd moved on to a different agency before my death, my former agency wouldn't have a claim on my estate, I might amend the opening sentence thus: "If this agreement is still in force at the time of the author's death..."

Something that many authors don't realize is that author-agent agreements are negotiable. An agent isn't going to change his or her commission structure, but s/he might be willing to be flexible on other matters.

The Grump said...

Thanks, Victoria, for the legal resource info.

Hopefully, it will come in handy someday.

Gregory Ludwig said...

Concerning the Barbara Bauer provisions I noted above: I might have mentioned the contract was for one year and renewable every year. There was a certain period (half a month, I believe) leading to the renewal date within which one party alone could cancel the contract; if this wasn't done, it would be automatically renewed, and of course both parties knew this was happening when a new contract for the next year came to the author in the mail and the author would sign it. At other times, the contract could be canceled only if both parties agreed. As it happened, I canceled before the little period leading up to the renewal date, and Barbara Bauer agreed.

The provision regarding author's death, it seems, pretty clearly implicated the idea that, if the agent made a claim to rights to the author's work, the contract was still in force for its one-year period. But nowadays, given the contractual snares with other agents such as Victoria is talking about, perhaps a contract had better make this sort of fact explicit. But I understood it well enough when still working with Bauer.

Paul said...

I've made a note of that language, despite having recently declined an offer for several reasons.

The National Writers Union, which includes unpublished as well as published writers, offers a free contract review service for members. My impression is that most or all of them are lawyers.

bjh said...

I'm curious - is this legal-weasel wordage coming from, er, established and, um, solid, uh, AARP-guideline-following - okay, "legitimate" agencies?

Victoria Strauss said...

Two of the clauses I quoted come from agencies with somewhat dubious credentials, but the others are taken from the contracts of established, selling agencies with names you might recognize.

The author complaint that led to the Authors Guild warning came from a client of William Morris.

Jessica Friedman said...

The Authors' Guild is probably a better source of reliable literary lawyers than Findlaw.com. (Disclaimer: I'm one of them.) I always counsel clients against interminable agency clauses, especially when the agency refuses out of hand to modify the clause. (I also love agency agreements that nowhere state that the agent is obligated to try to sell the rights in the first place.) But many clients, especially first-time authors, are so afraid to jeopardize the deal that they accept the clause anyway.