Have you ever been robbed on the street? Decades ago, and long before the cell phone existed, I was with a friend when she was robbed. Four young men walked toward us. Yes, we should have crossed the street, but we were city girls and if we had survived assault to this point—well, surely we would continue. We were wrong. Two young men grabbed her and two grabbed me. The goal was to take our handbags. Though they did not get mine, they did take hers.
We cautiously followed them for a few blocks as they haughtily walked away. Yes, walked. After reporting the incident to the police, a resident found her handbag in a trash can. No money or keys but she was happy to recover all else.
We called it a mugging–assault with intent to rob. But because they actually took her property by force, I think the better term is theft or robbery—“the action of taking property unlawfully from a person or place by force or threat of force.”
I was reminded of this incident by a new client. Let’s call my client Bob and his agent, George. Bob had written a memoir and George had agreed to represent the memoir and shop the work to publishers. The agency agreement amounted to three badly written paragraphs. Nevertheless, the one element that was clear was that George would receive a fifteen percent commission for his efforts.
Two years later, George reported to Bob that George had found a willing publisher in the UK. Bob was thrilled and urged George to negotiate the publishing agreement. Over the next three months, via email and telephone, George repeatedly complained to Bob about how difficult the publisher was. Finally, George reported that he and the publisher agreed on the terms. Bob was to receive a $2500 advance and George would earn fifteen percent of that–$375.00.
A few days before the contract was to be executed, George called Bob. George advised Bob that George wanted a payment of $1000 from Bob to compensate George for the efforts he had taken with this very “difficult” publisher. And he wanted it before the execution of the publishing contract. When Bob asked whether agents usually received these additional payments, George assured him that they did.
Was George’s demand for money really typical of agents? Bob had no idea and had no contacts with any other agents. If Bob contacted a strange agent to ask whether this was typical, would the agent tell George? And what about the publisher? Bob could not imagine approaching the publisher directly. What would Bob say? I don’t trust my agent!
Under the agency agreement, the only money Bob owed George was the commission. But if Bob didn’t pay George the additional one thousand dollars, whether or not such payments were typical, would George scuttle the publishing deal? Not wanting to take that chance, Bob wrote a check to George for $1000.00. And like my friend so many years before, Bob was robbed.
First, George lied to Bob about literary agents—agents do not typically ask authors for payments that are not commissions. In fact, there are industry codes of ethics prohibiting any such demands. As an industry, honest and conscientious literary agents recognize how dishonest members may abuse their fiduciary duties.
Second, George had signed an agency agreement limiting his compensation to his commissions based on an advance, royalties and licensing fees. There was no provision indicating additional payments would be required. Third, while there was no physical force, George subjected Bob to duress, a psychological state causing Bob to fear the failure to pay George would lead to the loss of something of value, i.e., publication of Bob’s book.
Although George had a fiduciary duty to use his knowledge of publishing to protect Bob’s financial and professional interests, George chose instead to breach his fiduciary duty and favor his own interests instead.
Fortunately, George is a rare figure in publishing–most agents work in good faith and are honest people. But if you have the misfortune of contracting with one like George, notate and date any verbal demands and save any related written documents. Don’t make the payment and immediately seek legal advice.