Changing Agents . . . and those Pesky Ongoing Commissions

If you’ve been following the Australian court case between bestselling author Kate Morton and her past agent Selwa Anthony, you’ll know that parting ways with your agent may not only lead to bad feelings, but also to contractual claims.

For anyone not following the case or not familiar with the issue, authors should be aware that it’s typical in the publishing industry for your agent to take a commission on deals they’ve brokered for you, even after the agency relationship ends. (Commissions may vary, but standard commissions are around 15% for standard book publishing contracts with variations for secondary rights and foreign sales.)

This approach makes sense if you think about it: the agent gets to reap the rewards of the efforts she’s made to sell your work. Even if you leave your agent and move to a new agent, it’s not fair for the new agent to take commissions on a deal that a previous agent brokered.

The problem in the Morton/Anthony situation is that the agency agreement was never reduced to writing. Anthony (the agent) is claiming she’s entitled to continually receiving commissions on royalties paid to Morton after the termination of their agency relationship. Morton is claiming that was never a condition of the contract, and the contract was never in writing, so there’s no evidence of the ongoing commission term.

Many people have expressed skepticism that an international best-selling author with over ten years in the business is unaware of the ongoing commissions that are typical in agent contracts. However, Morton claims that she was an inexperienced debut author when Anthony first took her on as a client so, without a written explanation of this contract term, she couldn’t have been expected to know about it.

The case is ongoing in the courts of New South Wales, and it will be interesting to see what the court decides. But it does raise a couple of issues that all authors should think about with respect to agency agreements:

  1. Contracts with agents should be in writing and should be clear about what happens in the case of ongoing commissions. It’s no big deal (and is actually pretty standard industry practice) for agents to take ongoing commissions even after termination of the agency relationship, but this should be spelled out clearly in a written contract where possible.
  2. It’s also worth noting that just because a contract (or contract term) wasn’t in writing, it doesn’t mean there isn’t a valid contract, or that the term in question isn’t part of the contract. For agency contracts, there’s no problem with a purely verbal agreement, although, in practice, today most contracts will at least be evidenced by some email communications between the parties. Bear in mind that there’s no particular form these kinds of contracts have to be in: an exchange of emails where the parties agree and understand the terms can be a valid contract. A purely verbal contract (as with Morton and Anthony) can also be valid and binding, although there may be disputes about what the terms actually were in the absence of any writing.

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