5 Things To Watch for in Publishing Option Clauses

Most publishing contracts include not only a grant of rights to publish the work the contract governs but also an “option clause” giving the publisher rights of first refusal to consider the author’s next work(s) of fiction.

Carefully tailored option clauses are beneficial to authors as well as publishers, but authors need to ensure the option doesn’t overreach or bind them inappropriately.

Appropriately-drafted option clauses have three important features:

1. The option governs the author’s next book length work in the same series or next book-length work in the same genre only.

2. The option gives the publisher a right to review the work and to negotiatemutually acceptable contract for that work (if desired).

3. The option does not limit the author’s ability to sell the optioned work in any way if the publisher chooses not to exercise the option or if the parties can’t reach agreeable contract terms.

Here are some important red-flags to watch out for (and remove) from the option clause:

1. The option should not “include” the optioned work in the original contract, or lock the author into an identical contract for the optioned work. 

The terms of a contract should be negotiated when both parties are bound–meaning, at the time the book is bought by the publisher. If a publisher wants to include multiple books in a single contract, then the contract should be for a multi-book deal, not a single book and an option.

2. The option should not cover the “author’s next work” without limitations on genre, length, and series. That’s too broad an option.

Options should always cover only the author’s next “book-length” work, so the author isn’t legally bound to send the publisher shorter works like novellas or poems. Also, options should be limited to the next book in the author’s current series (if appropriate) or in the same genre as the contracted work. Many option clauses start out far too broad, and need to be tailored and limited through negotiation.

3. The option should be for one book only, not for “all future works” or “all future works in the series.”

Presumably, if the publisher does publish the optioned work, that new contract will also contain an option. The publisher doesn’t need more than a single option (on the next book in the series) at a time. Granting multiple options at once is dangerous, because it ties the author in if things go badly.

4. Beware of options which limit or restrict the way the author can sell the optioned work if negotiations with the publisher fail.

Some contracts try to limit the author’s options if negotiations with the publisher fail to produce a contract for the optioned work. For example: don’t agree to options that limit you to accepting only offers with “better terms” than what the publisher offered. These options are dangerous because the definition of “better terms” varies widely. If negotiations on the optioned work fail to produce a contract, the author should be able to sell the book any way (s)he wishes.

5. Don’t get so excited about the existence of an “option” that you forget to evaluate its terms carefully & get a second opinion on the language.

Literary agents and publishing lawyers spend a lot of time reading and negotiating contract language. Many times, deciphering contract language requires knowledge of the industry and the possible lurking problems as well as being able to read the actual contract. Obtain a professional opinion before signing a contract containing an option clause.