Author’s Note: This is not meant to be commentary on any particularly literary agency or its contract (including my own), nor any press or its publishing contract. It’s not one-size fits all advice and doesn’t include everything any contract can include because one of the beautiful things about contracts is they’re not one-size fits all documents. I should also mention my background is in commercial and enterprise contracts, not publishing contracts, but there are some tips and tricks about contracts that span the landscape, and I’ve seen a bunch of literary agency contracts and some publishing contracts at this point. For context on my background, I spent 11 years working as a senior litigation paralegal at a law firm that represents only employers primarily in employment, employee benefits, and labor law matters, but also handled a lot of contract work in commercial construction and manufacturing. Currently, I’m employed as a Vice President of Compliance at a medical software company and one of my primary responsibilities is drafting, reviewing, and negotiating all our client, vendor, and employment contracts. In my career, I’ve reviewed hundreds of contracts, from several paragraph letter agreements to hundreds of pages master service agreements and everything in between.

Disclaimer: Despite the above, I am not a lawyer and nothing in this blog should be construed to constitute legal advice or be depended upon as legal advice. I am also not a literary agent. If you have questions about your literary agency or publishing contract, you should consult legal counsel of your own choosing and/or discuss it with your agent (or contract an agent for the purpose of helping you negotiate a contract directly with a publishing house). Further, it should be noted that contract laws and principles can (and do) vary state to state (in the USA and certainly even more so internationally).

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Contracts 101

Building Blocks of a Contract: Fancy Legal Language Incoming

Contracts (also called agreements) are basically just written documents that outline the terms two (or more) parties have agreed to in exchange for the parties providing one another with something the other wants. They can be verbal but uh… the TL;DR of this entire blog is they absolutely shouldn’t be in publishing. Ever. Like huge red flag if that’s happening to you. Don’t even go a step further. An offer is (often) verbal. It should be solidified by a written agreement that you read (the whole thing) and sign.

Contracts are built using certain “building blocks” aka legal structures that form the provisions of the agreement. They are usually:

Representations, Warranties, and Indemnification: The representation is an assertion one party makes to another to induce them to enter into a contract in the first place. The warranty is the promise the representation is true. Usually, a warranty is also accompanied by a promise of indemnification if the warranty proves false. This means that if the warranty doesn’t hold up (or someone alleges it doesn’t, don’t forget people can sue for bogus reasons and real reasons alike), the person who made the representation will take responsibility (financial and legal) if the other party gets sued. (Hypothetical Example: Representation: This book that you’re offering on was written by me. Warranty: My promise to my agent and agency no one else wrote this book and it isn’t stolen. Indemnification: The book sells in a preempt (under the same representations and warranties now passed on to the publishing house) and halfway through edits, my editor finds out Chat GPT wrote my book. The publishing house sues me and my agency. I lied, indemnification kicks in. It’s my responsibility to cover my defense and my agency’s defense and likely any settlement or judgment). Pro tip: Don’t steal, write your own books, and this representation and warranty is not a difficult one to meet.

Covenants: Covenants are basically promises from one party to the other to take action or refrain from taking action. Covenants and warranties are often mixed up and sometimes used interchangeably. They are not technically the same thing, however, as warranties are usually promising something about the state of affairs before the contract begins, while covenants are promising action or non-action during or after the term of the contract. (Hypothetical Example: In a literary agency contract, a covenant could be the promise your agency or agent makes to you to make a good faith effort to sell your book.)

Rights: Rights are what the party who has agreed to a covenant gets in exchange for agreeing to the covenant. (In the example I provided earlier, it’s the right of the agent to take a commission for actually selling the book).

Conditions: A condition is something that must be met in order for rights under the agreement to be triggered. There are different ways conditions are applied in contracts (and they can be applied in several different ways in the same contract). (Hypothetical Example: In an agency contract, a set of conditions might be that an agent must not only sell your book to a publisher but they must also have a signed contract in hand and money be paid out before they get their commission).

Mutual Statement of Fact: These are clarifying statements that limit or clarify the above things. You’ll often find them at the beginning and end of a contract. They consist of standard contract provisions like jurisdiction, choice of law provisions, definitions, arbitration or mediation clauses, and the like.

What to Consider When You’re Considering Contracts

In theory, there’s almost nothing in a contract that can’t be changed. You probably can’t make the jurisdiction of your contract Manitoba if your literary agency is based in North Carolina and you live in Pennsylvania, but many other things can legally be changed. Whether they will be is a whole separate thing. Contract negotiation is really a lot more about choosing what hills you want to die on, how much risk you can tolerate, and where your negotiating position is than law, truth be told.

That said, here are some things to consider when you’re thinking about the contract negotiation process:

• The relationship between the parties and their negotiating leverage: The fact of the matter is that in negotiating a contract there is always a party who has more power. In the case of an author signing with a literary agent/agency, it is usually the agent/agency who has more negotiating leverage/power, but not always. If you’re one of those lucky authors who had multiple offers, you might have more leverage than you think. Even if you’re not, you should never underestimate the power of the word “no.” That said, that’s a risky strategy, which is where that hill to die on and risk v. reward concept comes in.
• The scope of the contract: Are you contracting with the agent as an independent contractor or the agency? For this book only or a whole career? These are things to consider when you’re negotiating a contract (and to ask about on your call as well).
• The reputation of the agent/agency including which party might be more likely to breach the agreement: For reasons we have seen play out in the public spotlight a bit too much recently, this has to be considered to the extent possible. Is this agency going to hold up their end of this contract? Are you going to be able to? Because let’s be real, litigation is expensive, out of reach for most individuals, and no one really wants to be on the other side of a lawsuit.
• Each party’s risk tolerance: What can you tolerate? What do you think the other party can tolerate? This can be tricky and is super individualized. What matters to you might be different to me. What I trust might be different from what you trust. I have negotiated hundreds of contracts and am often surprised what some companies hang onto with fervor while others shrug at (I expect this has to do with where they’ve been burned in the past). As an individual, I’m risk averse as a rule (anyone who has spent a decade plus watching people get sued tends to be), but I also know myself pretty well. I know what I’m capable of promising and what I’m not. I know contracts. I understand what I’m agreeing to and what happens if The Worst Possible Thing happens. I have contingency plans. If The Worst Possible Thing happens, I can tolerate it. This is what you should sort of evaluate for in yourself and in your contracts.
• The potential interplay of this agreement with others: For literary agency agreements, it’s important to think about how this agreement will work with your future publishing contracts. Try to think about the good and the bad. Contracts are there to prevent confusion, but no one can ever think of every situation. Still try. How do the commission payments for your agent work? Foreign rights? Film options? Audio? Multi-book deals? What if you want to write something not covered by the agreement like short stories or poems? What if you want to self-publish later? What happens if the publishing company pulls your deal through no fault of your own? What if you can’t complete the work? Who gets paid? Who doesn’t? What has to be refunded? To who? And more importantly by who? These questions don’t necessarily have to be answered in your agency contract, but if there are provisions in your contract that might play off questions like these in a potential future publishing contract, you can certainly discuss them with your agent and see how the agency negotiates publishing contracts around them (shocking no one, I did! And hey! I didn’t get immediately thrown back in the trenches 🤪)

Particular Provisions to Keep on Your Radar

When you’re dealing with an agency agreement, there are some particular provisions to pay attention to. Again, this is not one-size fits all advice and some people might care more about one thing versus another depending on their individual risk tolerance, general negotiating prowess, desire to just get going already, etc. However, these are some of the provisions making the rounds in literary circles lately, which I think deserve a little dissection.

Scope of Representation: This provision might be called different things in different contracts but in general, this should be the paragraph(s) that explain what is being represented (and what isn’t). What isn’t being represented is called a “carve-out.” Common carve-outs include previously published works, certain genres, or lengths of work like short stories, essays, poems, etc. If you’re a hybrid author or want to be, pay attention, this is likely where you’ll want to have some language about what your agency is representing and what you’ll self-publish. Or if the agency gets right of first refusal (i.e. the ability to determine/discuss/offer on trying to sell the work before you self-publish).

Agency’s Representations, Warranties, and Indemnification: These are the promises the agency is making to you and the warranties they’re true plus the promise they’ll defend you if things go south. Note: Many contracts will use terms like “gross negligence” and “willful misconduct.” These terms are: (1) defined differently state to state; and (2) highly fact-specific. However, they are generally associated with conduct that departs from the ordinary standard of care commonly accepted as usual in that industry. It’s also important to note that despite sounding scary AF they are pretty standard contract terms.

Author’s Representations, Warranties, and Indemnification: These are the promises you’re making to the agency and the warranties plus the promise you’ll defend the agency if things go south. You should definitely make sure that whatever you’re agreeing to you’re confident you can agree to and stand by! Pro tip: Don’t lie. It really does catch up to you.

Payment Terms: This explains who is paid, how, and when. Industry standard is 15% commission to agents on an author’s US literary rights. Do not be surprised to see different commission amounts or structures for things like foreign rights, audio rights, and film rights. 15% is the standard for US literary rights (i.e. selling your book for publication and distribution in the US). There’s a lot of information right now that is just “15% is standard.” True. But not the whole truth. The entirety of the commission structure should be laid out in the payment terms, including when payments are paid and to whom (many agencies request/require payment be made from the publishing house to the agency, and the agency pays you after). This is also where you should keep an eye on contract terms that may or may not exist around what happens if your publishing contract gets pulled, or you’re unable to fulfill it for whatever reason. If there are no terms about that, you can still ask – how does your agent negotiate the contract? Can that kind of thing be worked through? We never want that to happen, but being a savvy contract negotiator is all about planning for the scenario no one saw coming. If it’s not in the agency contract, that doesn’t mean it’s a red flag, it very well might be something they negotiate in the ultimate publishing contract, but asking the question can teach you something about the agency’s negotiation habits in general. Don’t forget, the contract negotiation might end for you after you sign on your agency agreement’s dotted line, but a big part of your agent’s job is striking the best deal for you (including negotiating your publishing contract(s)!)

Term of the Agreement: This provision will tell you how long you’re entering into the agreement. Is it fixed? Or evergreen? I’ve seen some really bad information about the latter, so I’m going to take a minute to parse these out.

Fixed Term Agreement. A fixed term agreement is an agreement that lasts a specific amount of time, then ends. The agent or agency has agreed to represent you for a year or two or three or five and then the agreement is renewed or ends. If you have an agreement like that, it should also have an accompanying renewal provision explaining how the agreement can be renewed. Pay attention to that! Is it contingent upon a sale? Upon both parties wanting to continue on with the arrangement? How many days before the end of the term do you have to start the renewal process? Fixed term agreements are more common in commercial contracts than in literary agency contracts (I’ve never personally seen one in the literary space, but I’ve heard of their existence. This is the kind of agreement I negotiate most commonly in my day job, however, hence why I know a bit about them).

Evergreen Agreement. The more common type of agency agreement is an “evergreen” agreement. This kind of agreement might have a stated term, twelve months or so, but its term auto-renews unless one party terminates the agreement. This type of agreement is basically good forever until someone says otherwise. This type of agreement should be accompanied by a corresponding termination provision which explains how you make the evergreen clause stop. All contracts, however, should have a way to get out of them regardless of term, which leads me to…

Termination Clause: This is the provision of the agreement (also called an “out”) that explains how the parties end the agreement and what happens after. Termination clauses in general usually come in two forms, both of which can be present in a contract but aren’t always: (1) Termination for cause – this is what happens when one party terminates the agreement because the other party has breached it and failed to cure that breach; and (2) Termination for convenience – this is what happens when the agreement is terminated for any reason that isn’t a breach. While not mandatory, termination for cause clauses do often offer a “cure” period where the party who is alleged of breaching is notified of their infraction and given a certain period of time (say 15-30 days) to “cure” the breach. If they don’t, the party who alleged the breach, can terminate. Termination for convenience provisions usually also require notice, often 30-60 days or so. During this period, the “notice period,” the contract is still in full effect. This notice period appears to be getting confused with another set of provisions in many agency contracts that come after the termination is effectuated and which apply only to certain works.

Post-Termination Provisions: Many agency contracts also outline a period of time after the contract has been terminated. This is not the notice period described above, and what (if anything) these provisions contain varies from agency to agency. Some agencies have provisions regarding this period of time, some do not. However, in general, things discussed in these provisions seem to include: manuscripts actively out on submission with editors, how long the agency of record (aka the terminated agency) gets to continue soliciting these manuscripts, who gets the commission if they sell, what happens if they don’t sell within the period of time described, and how long a terminated author has to wait to query that project after it is released. I am unsure if these provisions might also sometimes contain a blanket prohibition from querying at all for a period of time after termination of the contract (I have never personally seen this in an agency contract) or if this is being confused with the notice period referenced above where you are still under contract (usually an exclusive contract) and thus cannot query.

From what I can tell, the period of time an agency has to attempt to finish up soliciting a manuscript actively on submission (different from the notice period) ranges anywhere from 90 days (seems to be pretty standard(ish)) to perpetuity (not standard, I don’t think I would sign up for this myself, but I’m not you). The work covered also seems to vary widely from only projects that are actively on submission (pretty standard) to anything you ever pitched to your agent ever (not standard). If the project sells, the agent who sold the project gets the commission (standard) and will continue to do so for that book, pretty much (also pretty standard). If the project doesn’t sell, some contracts seem to allow you to go solicit that book to whatever agent you want while others seem to say you can’t. Some say you have to wait certain periods of time, others don’t mention this at all. This is really where it seems to get quite muddy and where you really have to decide for yourself what you’re willing to accept in terms of risk, reputation, and where you might find yourself in the worst case scenario.

*Note: I haven’t read every agency contract in existence. Honestly, I’ve read probably a paltry sampling of them. Some of the information I gleaned for the above two paragraphs came from Twitter threads and allegations and might be misinterpretations of contracts, which is why understanding your contract is so important! Understanding your outs (and what happens after) is very important.

Shorter is not always Better

Contracts are all about clarity (which is why I love them). When they’re unclear, things can get needlessly messy. The best contracts plan for every scenario (or at the very least the ones most common to that industry) and describe the procedures for those scenarios. Doing that takes up word count. Real talk: ambiguity very rarely works in the favor of the party in the shitty situation. If something goes wrong, you want to be able to confidently point to your contract and say, “I know what happens now.” Even if what happens now means you have to ask for certain provisions to be waived.

So while it’s more footwork to read and negotiate a longer contract, they’re often a good indicator the agency is taking its business (and you) seriously. It’s also a good sign your agency knows how to predict common industry scenarios and negotiate a clean contract, a skill you’re going to be interested in when you’re ready to work with your agent on your next contract – your publishing contract!

Contracting an Agent for a Contract

Finally, if you receive an offer of publication from a press without an agent, please know there are agents (and lawyers) who will contract with you for the sole purpose of helping you negotiate that contract. There are fees for this, but they’re not 15% of the contract like a standard agent commission, and it’s definitely worth it, because if you think what I just wrote is complicated, it’s nothing compared to a publishing contract.

Power Dynamics

The hardest part of negotiating any contract is being (or feeling like) the “little man.” It would be irresponsible of me not to mention the power dynamics at play here. After years in the querying trenches, despite how kind and candid and honest and lovely my agent is, I was terrified to say the “wrong” thing or do the wrong thing or seem like I was being in any way entitled or difficult or less than humble. I was overcome with gratitude to even have an agent offer. So when I was sent the contract and my compliance brain kicked on, and I immediately set to red-lining and asking questions and having lawyers review the thing, I started to stress.

Maybe I should just sign it and accept the risk. Maybe it didn’t matter. Maybe I was worrying over nothing. What if I was thrown right back into the querying trenches where I came from? I should just shut up and sit down and say nothing.

Incorrect. Valid. But incorrect. This person is truly going to be your business partner. Right now, they’re representing their agency, but as soon as you sign on that line, they represent you. We all put “rep” in our bios, right? Believe it or not, you representing you is a professional look. You’re showing your new business partner that you, too, take business seriously. That you’re taking them and their offer and their agency seriously. If they view this any other way, they’re belittling you as a true equal in business.

Now, this also means you have to be professional in business. You should do your level best to understand your negotiating position, and the agency’s explanations. You should be courteous and choose your hills and be prepared to meet halfway. Negotiation is about both parties walking away feeling like they got a good deal (or if you see things from the glass half empty perspective feeling like they both got just a little bit shafted). You won’t get everything you want. Might not get nearly as much as you’d hope, but you’ll have set a good tone for your future, and you’ll have learned quite a bit about the negotiation skills of your new partner in the process.

Take care of yourselves out there.

Xoxo,

Aimee