Is my agent (even if fired) entitled to commission my option book?

Hi Noah,

Great blog. I have a question unrelated to this post - after firing an agent, can she use the options clause in your publishing contract between you and your publisher to claim a commission on future works?

Thank you.

--Anonymous


This is a sophisticated question, and one which is rarely addressed.

For those of you who may not know, a standard publishing agreement contains an “option clause,” which gives your publisher the first and exclusive right to acquire the next book you write. The standard publishing agreement also contains an “agency clause” (for authors represented by agents) which assures your agent that he will receive his commission. The issue at hand is not the option clause itself: it would be quite unusual for an option clause to contain any language referencing the agent. The real issue is the agency clause: it is quite common for an agency clause to reference the author’s option book. This language usually states that if the publisher buys the author’s next book (the option book), then the agent will be entitled to commission that, too.

From the agent’s perspective, the agent is the one that introduced the author to the publisher, and thus if the author continues the relationship with that publisher for a subsequent book, the agent should be entitled to commission that, too. This is relatively standard, and in many scenarios, this is justified: an agent can work for years to finally land an author a deal, and in some cases, once the author is all setup, the author will fire the agent in order to not have to pay him a commission on future works. Alternately, the author may fire the agent in order to switch to another agent. In such a scenario, the original agent may feel burned, and feel entitled to commission at least one more book between the author and the publisher. This language exists to enforce that.

But there are a number of reasons an author-agent relationship can fall apart during the months or years it takes to complete a book, and it’s not always due to greed or a lack of loyalty on the author’s part. In some cases, the author may be working in good faith with the agent, while the agent may, along the way, become unresponsive or unsupportive. Thus the author may very well feel entitled to fire the agent, and may feel that the agent should not be entitled to a commission on an option book.

In most cases, this is not an issue, since authors who are setup with a publisher are usually happy, especially if they continue this relationship for subsequent books, and they’ll usually be grateful and want to continue have their agent represent them. And in most cases, agents, for their part, will continue to work hard, and continue to be eager to represent the author.

But if things do fall apart, and if it does become an issue, then legally, if the agency clause contains this language, then the agent does have a legal basis to receive that commission. In order to ensure he receives this commission, an agent may sue the author and/or publisher. It can get very messy. This is why a few publishers, who don’t want to get caught up in spats between authors and agents, will refuse to allow this language in agency clauses. Most publishers do, though, and it remains fairly standard.

Keep in mind that this language is fairly limited: it only entitles your agent to a commission if you sell your next book to the same publisher, and it only entitles them to commission that next option book (not subsequent books). Thus there are ways around it. For example, if your publisher rejects your next book and you sell it to a different publisher, then the agent cannot claim a commission. Or if your publisher rejects your option book, but then you write a different book and sell it to that same publisher, your agent cannot claim a commission on that either, since technically, it’s not your option book (even though you remain with the same publisher).

Finally, keep in mind that you may also have signed a separate agency agreement directly with your agent, and that, too, may contain pertinent language. You need to check both to make sure you are completely free and clear. (Also read my post, “Can I fire my agent mid-submission?”)