Vicki's Book News and Articles

Business: Agency Contract Clauses

Written by Vicki Hinze

On December 28, 2010

Vicki Hinze © 2004-2011

I’ve been with the same agent for 4 years and he’s done a good job for me. Now, his agency is putting a clause in my contract with my PUBLISHER that says the agency has a “vested interest” for the “life of the work.” It used to read, “for the life of the contract.” What is the difference between the life of the contract and the life of the work? Doesn’t the work only pertain to it during the life of the contract? After the contract has been satisfied, aren’t any rights created in it satisfied, too?

I want to preface any remarks by reminding you that I’m not an attorney and I’m not offering legal advice. If you want a legal opinion, you need to consult a literary attorney for his/her interpretation and/or opinion.

Speaking strictly author-to-author, I will share what I’ve learned on this with you.

Life of the contract and life of the work are two different animals.

Life of the contract is exactly that. The agent/agency, depending on how it’s worded, has a vested interest in this work until all of the terms of this contract are met and satisfied and the contract ceases to exist between the parties.

That time does not come when an author finishes the work, the publisher finishes paying for the book, and the book is no longer on the shelf. That time comes when the publisher reverts any and all rights in the work to the author.

A book can be out of print, and yet the contract is still valid and the publisher, typically at its discretion, can reissue/reprint the book at a time of its choosing.

When the publisher reverts all rights to the author, then not only have all the terms of the contract been met, but the contract itself is satisfied. The agent/agency’s interest in this project is satisfied–provided there isn’t a clause in the agreement between the author and the agent that extends the agent’s interest beyond the length of the contract.

Life of the work means the agent/agency is declaring a vested interest in the work for so long as the work exists. That means, beyond copyright, beyond copyright and fifty years after the author’s death. That means forever. If the work exists, the agent/agency has a vested interest in it.

If this “vested interest” agreement is made in the agreement between the author and the agent/agency, then it exists forever unless there is another clause in that author/agent/agency agreement that provides for severance and the return to the author of any agent/agency vested interest in the author’s works.

If this “vested interest” agreement is made in the publishing contract between the author and his/her publisher, then the agent/agency is a party to that agreement and the terms created in it are binding as stipulated and agreed to by the parties.

In other words, you sign it, you’re committed. You leave that agent/agency, and you’re still committed. The agent leaves that agency, and your work is assigned to another agent at that agency and you’re still committed. If that new assigned agent leaves and the work is reassigned to yet another new agent at the agency, you are still committed.

An attorney might or might not be able to recover the vested interest of the agent/agency once all the other terms and conditions of a contract are satisfied (say, rights are reverted by the publisher to the author), but s/he might not be able to recover those rights. That would have to be negotiated between the author and agent/agency or decided on by the courts.

Before you get hostile with your agent, understand that many agents don’t care for this “life of the work” verbiage either. What it means to them is that if they leave the agency they are with at the time the agreement is created, then the vested interest in your work stays with the agency. Most agents who leave an agency want their clients to leave with them, and they don’t want to leave the works–their income–back at their old agency.

They also don’t want to lose authority over their clients’ works. When an agent leaves the agency, the agency assigns the work to another agent–one that neither the author nor the departing agent selects, and that new agent represents the work left behind.

Then you have the agency perspective. The agency lends its weight to the agents working for it to gain assets (works). If an agent chooses to leave, is it fair for that agent to take all of those assets with him/her? Or should the agency be compensated for its efforts in attaining those assets?

A few years ago, there was a mass exodus from one of the largest agencies in the country. Many agents left and took many clients and assets with them. The agency was devalued because of the loss and it’s believed that this “life of the work” clause was generated as a result, to protect the future assets of the agency.

Just as a few years ago, several agents increased their commission to 15% versus the then standard 10% and now 15% has become standard, this clause has been picked up by more and more agencies. Some consider it negotiable, some do not.

In a pretty broad number of cases, authors have left agents they very much like because this clause was considered not negotiable. In other cases, the agents have eliminated it from the agreements of those authors who ask/insist to keep from losing those clients.

It’s my understanding that the major writing organizations are discussing this challenge and potential solutions to it. Here’s hoping that they are successful and find a solution that is fair and reasonable to everyone involved.


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