Option Clauses
by Daniel Steven

Q.  Tell me about option clauses.

                A.  These clauses traditionally give publishers the right to either buy or make an offer for the author’s next book or books.  Of course, if your novel sells well, there’s something to be said for loyalty to the press that helped you get there.  Publishers and agents alike complain that writers tend to jump ship after they’ve helped make the writers successful. The option clause, therefore, is a bit of an insurance policy for the publisher that you have to give them another shot after they invested in you.  It’s not usually an evil clause in its intent, but there are too many situations where the clause becomes impractical.

The problem is that when you enter into the publishing agreement, you don’t know whether your current book will sell well, and whether the publisher will do a good job editing and marketing it.  Further, what if your next book isn’t appropriate for this publisher?  You decide to write a sweeping historical thriller, and your current publisher specializes in cozies.  You’d have to show your historical to them, and they could hold you up from submitting it to appropriate publishers.

Best advice – eliminate the option clause entirely.  Many authors are surprised to learn that publishers will agree to delete it  – but you have to ask!  If you can’t eliminate it, however, make sure it imposes no real burden.  Get rid of any contract language requiring you to submit a completed manuscript, rather than a proposal; lengthy (more than 60 days) consideration periods for the publisher; and a requirement that you offer your next book to the publisher on the same terms as the current book. (What if your first book is a bestseller and now you can command a much higher advance and royalties?)

Ideally, you should aim at setting up a very limited period during which the publisher may bid on your next book (“right of first negotiation”), and permitting you to sell the book to other publishers if the publisher isn’t interested.  And don’t accept any clause that stipulates you can’t accept an offer from another publisher if it’s not on “better terms.”  That may sound logical, but what if Publisher A offers you more money up-front, while you trust Publisher B to do a better job at marketing?  Or perhaps you’d prefer to try a smaller publisher that can’t pay as much, but can show you more personal attention. You should always have the right to refuse your publisher’s offer, no matter what the terms are, if you choose. All the first option should do (if you have to include it) is give the publisher a right to read the work and make an offer.

You’ll also want to restrict the definition of “next work.”   Make sure it’s limited to the next work in the same genre, or in the same series, or the next work that’s in categories the publisher deals with.  And make sure the option is for no more than one book.
Even a well-restricted clause can be an annoyance because it wastes your time.  So think long-term, and never be afraid to negotiate.