February 24, 2012
Rowling Settles Contract Dispute with Former Agent
The Telegraph reports here that JK Rowling has settled a dispute with her former literary agent, Christopher Little. Little was the agent who pulled Rowling's manuscript for the first Harry Potter book out of the slush pile. Much to Little's surprise, Rowling decided to join a former agent of Little's, Neil Blair, at Blair's new agency. It seems like there's loads of contract law issues here - Little undoubtedly had an exclusive agreement with Rowling to represent her, Blair may have had a non-compete with Little. Did Little's agency agreement contain the exclusive right to represent Rowling with respect, not just to her published works and associated film rights, but "new media" such as Rowling's Pottermore website (which she and Blair were working on while both were with Little)? Did the work done by Rowling and Blair on Pottermore violate their agreements with Little? Unfortunately for us contracts profs, the terms of the agreements are all confidential....
This situation brings up an issue that I've always wondered about with respect to exclusive agency agreements -contract law seems to me somewhat one-sided, in favor of agents, when it comes to exclusive agency contracts. Wood v. Lucy, Lady Duff Gordon held that an exclusive agency agreement that did not specify performance targets did not lack consideration because it was implied that an exclusive agent would exercise reasonable efforts to perform, otherwise the agent wouldn't get paid. But I think it's not uncommon for agents representing uknown writers, actors and singers, to spend their time on their established clients and only use minimal efforts to promote their new, lesser known, clients. Clients typically terminate the agency after the period of exclusivity in that situation, but under the rationale in the Lady Duff Gordon case, couldn't the clients sue for "breach" of the duty to use reasonable efforts? I would think the answer is yes. The bigger hurdle would be damages, which would be hard to calculate with any certainty for a new, unproven artist. There's also the bargaining power issue. There's typically a lack of bargaining power between a new client and an agent (we're not talking here about Rowling the rich and famous author, but Rowling the unpublished struggling single mom on government benefits). Theoretically, a client could terminate an agency agreement during the period of exclusivity if the agent is not exercising reasonable efforts - but a client would only do that if she had another agent or was able to sell her [insert creative work here] on her own. In that case, the terminated agent would likely sue the client for a share of any royalties, claiming that the client did not give the agent adequate time to perform under the agency agreement.
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Great post, Nancy. There's a lot to think about here. I wonder, for example, if the standard agency contract with an "unknown" is exclusive. I have often heard of would-be authors shopping their manuscripts around to multiple agents. Is it always the case that when an agent picks up an author, the agent demands exclusivity?
In addition, Lady Duff is of little help because she was not unknown. If the situation is as you say -- that is, if the typical agent does very little for her unknowns while focusing on more marketable clients -- would a court find minimal effort to be reasonable for the purposes of suit alleging breach of an exclusive agency relationship?
Posted by: Jeremy Telman | Feb 25, 2012 7:21:54 AM
Thanks for commenting. Yes, from what I've seen, an agency agreement to represent an author (even an "unknown") is always exclusive. As for your second point, Lady Duff (the case) is still relevant because it establishes a standard for exclusive agency contracts even if the determination of reasonableness would be different depending upon who the author was. In other words, an author arguing that an exclusive agency agreement lacks consideration because there were no specific duties outlined would probably not prevail under the Lady Duff case unless she could show that the agent did not use reasonable efforts to promote her work. As you pointed out, the agent could argue that minimal efforts are "reasonable" given the author's status but I think in order to prevail, the agent would still have to show some efforts (contacted editors, sent out the manuscript, etc). There may not be as many opportunities for the agent to push for the new author, but it can't simply be signing up the client and putting the manuscript in a drawer....
Posted by: Nancy | Feb 28, 2012 6:46:15 AM