Your Option Clause
- By: Jessica Faust | Date: Nov 17 2010
I’m in what I consider to be a bit of a bind. My publisher has not been the most active with my book, and not the most communicative in general. I find it rough, but understand I signed a contract, it’s technically their book now.
There’s a Right of First Refusal clause in the contract, which I didn’t think to be a big deal when I naively signed last year. However, I’m pretty much finished with the sequel to the book, and have to show them. The clause states nothing as to time frame or terms, simply says “We have the right of first refusal”.
Does this mean I HAVE to sign the contract for the next book? Do I get to negotiate the contract if I do have to sign? What would be an appropriate amount of time to wait for their response? Am I totally out of luck, or does their simple statement give me some leeway?
And this is why you want a professional to help negotiate a contract.
It’s hard to tell you exactly what you have to do or don’t have to do without having the clause and the exact terms in front of me. That being said, I will do my best to explain the clause and what you are likely required to do.
An option clause, also called right of first refusal, means that you agree to give the publisher an exclusive look at your next book. Typically, the clause appears in all or most publisher contracts, and few publishers will agree to delete it entirely. They will, however, often agree to narrow it as much as possible, which is something an agent will do for you by adding things like a time frame and a description of “next work.”
However your option clause reads, it in no way means you are required to sign a contract for the next book. The publisher can’t force you to write for them. Typically it means they have the first right to read the book and make an offer, which you would then negotiate. At that point, you can decide either to stay with the publisher or pass on the offer and shop your book to other publishers.
As for time frame, I would give them 30 days to respond before harassing them for an answer.
Jessica
Another informative response for new authors. Many thanks, Jessica.
Yet another bit of useful information. Like everyday. Thanks, Jessica. I honestly don't know what newbies to the game would do without you, Janet Reid and (the now departing) Nathan.
I've still don't understand publishers' attachment to option clauses. If I am happy with them, they will get the first look at the new work. If I'm not happy with them, then I will make sure that they don't get a hold of it. It's a bad deal for the author. If things are good, nobody needs the clause. If things are bad, it only serves the publisher and agent.
(Posting anonymously here because I am a publishing attorney.)
One other potential danger with option clauses: when I write them for publisher clients, I generally include language stating that if they exercise their right of first refusal, it will be on terms and conditions identical to the existing contract – so read carefully, to make sure that kind of language isn't also included. It still wouldn't force you to sign a contract, but it could impact the terms upon which you can sign if you go with the same publisher.
@anonymous 12:27: Publishers' attachment comes from the fact that most authors' sales increase with later books. The publisher is taking a chance – and spending money – on an author, anticipating that they will profit more as (and if) the author's fame grows. You personally may have great attachment to a publisher who took a chance on you, but many authors would feel differently when the money is on the line.
I feel the same about agents that want to lock up an exclusive deal. It seems rather pointless. You do good with this, then I'm probably going to want you to do good with another, and another. If I'm not happy, fired is fired. The exclusive business won't have done anything but tick me off from the start.
Apropos of nothing: Interesting bit here. Today's Los Angeles Times Entertainment section (11-17-10) has an article stating the Amazon is starting up Amazon Studios in partnership with Warner Brothers to upload and develop screenplays to show to prospective studios. Would that make Amazon Studios a cinematic version of a book packager?
No, I think it just makes them Godzilla.
(Seriously, it sounds like another attempt to make a profit while persuading screenwriters that they can avoid the slushpile.) 🙂
I heard a very successful author answer this question: if you like your publisher, well and good. If you don't like your publisher, send in a piece of "bound to be refused" drivel, and then the decks are cleared. As some other respondent has already pointed out, one has to wonder why this clause of purely one-sided benefit is in the contract. Some agents also use it, again purely one-sided.
I'm kind of surprised at the malevolence toward the first option clause. If you have a good agent, she/he will put a time limit on it. And, as has been noted, the publisher has already put out time/energy/money for you to make a name. Why shouldn't they have the right to protect their interests (you-the author name-is their interest) and investments? On the other hand, we have a right to protect ours as well.
However, I agree with the person who has written to Jessica. You can fall into a trap when there is no clear out clause (Time seeming like the best one and most professional on both sides.) when you do not have an agent.
We, as writers/authors should send our agents a great big thanks. If you are not reppresented by a particular agency, send all those who blog and help us a round of applause. Thank you for watching out back.
Similar to this, I've been wondering about the "non-compete" clause. This states something to the effect of:
While this Agreement is in effect the Author shall not, without the prior written consent of the Publisher, write, edit, print, or publish any sequel, series, or books containing the characters of the work or material that competes with the Work.
So if you have a series, and the pub doesn't want #2 in the series, you're never allowed to sell it to anyone else as long as they are still selling #1?
Help someone? Can this be true?!
Same poster as above here.
So, to clarify: if the pub passes on the option clause, meaning they don't want the next work that they have right of first refusal on, does that also mean that the non-compete clause is nullified?