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In this video, literary agents James McGowan and Jessica Fast discuss the importance of understanding the author-agent agreement when signing with a literary agent. They emphasize that the agreement is a formal document that outlines the terms of representation. The hosts mention previous discussions about handling offers of representation and engaging with multiple agents but note that this video focuses on comprehending the specifics of the agreement itself, an essential step in the publishing process. They encourage viewers to pay close attention to these terms to ensure a clear understanding of the relationship with their agent.