Authors Guild Advisory: Interminable Agency Clause
Reprinted with permission from The Authors Guild
Certain literary agencies include in their author-agent agreements or in the book publishing contracts they negotiate an "interminable agency" clause. Such a clause grants the agent the exclusive, irrevocable right to represent the works subject to the agreement for the entire term of those works' copyright. (Some agents use the phrase "agency coupled with an interest" in their contracts. This is apparently an attempt to secure similar interminable rights to represent works.)
Some members of the Guild and several writers' groups, including the Romance Writers of America, have written to us recently of their concerns about the interminable agency clause. Although the William Morris Agency has drawn most of the criticism, the interminable agency clause is used by several agencies, many of them quite competent and deservingly well regarded. We believe that most haven't given the clause much real thought and use it out of habit or because they borrowed language from another agency's form.
It is our hope that by addressing this clause agencies that currently use it will realize that 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, and will remove it from their contracts.
BURDENS OF THE CLAUSE ON AUTHORS AND THEIR ESTATES
The interminable agency clause, in the view of the Guild, is inappropriate and causes the author and the author's heirs needless trouble. Here are some of the problems with the clause:
The clause may entitle the agency to unearned income. The agency is compensated, as it should be, for its work in securing a contract for your work. Once the work goes out of print, however, the benefit you have realized from the agency's work ends, and so should the compensation. The agency should be compensated only for any new placement of the work that the agency secures. (No competent agent would countenance a similar interminable grant to a publisher, so that the first publisher of a work is entitled to a share of the income from a work even after the work goes out of print and a new publisher republishes it. Such a grant goes far beyond the traditional publishing license and would be tantamount to giving the publisher a permanent share in the author's copyright.)
The clause can greatly complicate the task of an author's literary executor. Your executor will not only have to keep track of such important matters as which of your works are still under contract, but will also have to determine whether an agency has an interminable right to represent any of your out-of-print works. In the event that you've had more than one agent (and more than one interminable agency clause applies) your estate will be contractually obligated to work with each of those agencies.
Your agency is unlikely to be around for the term of your copyright, which is now your lifetime plus 70 years. The copyright of a work written today will last on average 100 years or more. A lot of things will happen in that time. Your agency may merge, dissolve, or change names, providing more complications for your executor. Even if your agency survives or there's a clear successor, there's the question of ability. Your agent may be quite competent (most are), but will your agent's successor be?
The clause may conflict with other agreements signed with the agency. In some cases, including some recent contracts with the William Morris Agency, the interminable agency clause does not appear in the author-agent agreement but it does show up in the publishing contract. This discrepancy, in our view, would render the clause unenforceable, particularly if the agent failed to point out the additional rights the author was granting the agency. (We believe that new contracts with William Morris are now consistent.)
We don't want to overstate the problem. It's been our experience that most reputable agents, when asked to relinquish their contractual right to represent an out-of-print work, willingly (in most cases eagerly) do so. Still, the author shouldn't have to ask, nor should the author's heirs.
BENEFITS AND OBLIGATIONS OF THE CLAUSE TO THE AGENCY
The benefit to the agency of interminability is difficult to fathom. So long as the agency continues to faithfully perform its duties, no one seriously questions its entitlement to a commission for the duration of the publishing contracts it secures. On the other hand, the clause offers scant shelter to the agency that materially fails to perform its duties -- no competent court would rule that an author is obligated to pay a commission to such an agency. The apparent objective of the clause, to secure compensation for the exploitation of the work after it goes out of print, seems rather pointless. Once the work goes out of print and the publishing contract ends, the residual economic value of the work, regretfully, is usually vanishingly small. The opportunities for an agent to realize a meaningful commission on the work are even smaller.
The agent's continued right to this faint hope of compensation doesn't come without obligation or potential liability. The agency must continue to competently discharge its fiduciary obligations to represent the author's (or the author's estate's) interest in the work. The agency cannot sit idle: it must actively seek a new publisher for the work and report to the author or the author's estate on the agency's efforts in this regard. It must also diligently respond to any licensing and permission requests for the work.
A level-headed cost-benefit analysis of the clause, purely from the agent's perspective, weighs heavily in favor of dropping it.
FIXING THE PROBLEM
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."
MODEL CONTRACT PROVISION
The Authors Guild has added the following to the Model Contract Guide commentary on Agency Clauses:
Some agency clauses provide that the agent will exclusively represent the Work for the life of its copyright, or that the agency is "coupled with an interest." The Guild strongly recommends against such terms. The agent is certainly entitled to her commission for every contract she procures, but if the Work goes out of print and you later retain a new agent to remarket it, your former agent should have no further claim to commissions on new contracts for the Work."
If you have questions about the interminable agency clause, please contact our legal department at email@example.com.