Contract Basics: Option Clause

The Option Clause in a contract is all about the future of your career. Basically, in this clause, you promise your current publisher the first chance to negotiate an offer for your next book. Many people advise against having this contractual obligation at all, but as long as it's written fairly, all it means is that you will either have another contract coming your way without having to send out multiple queries, or you may have to wait a little longer before querying your next project. That being said, a poorly negotiated option clause can severely limit the future of your writing career, so pay attention!

What you should watch out for:

Definition of "next work"—this should be as specific as possible. For instance, the contract may actually say "Author's next work," but it is in your interest to narrow that down as much as possible, e.g. to next novel-length work, in a specific genre and a specific age category. If you're writing under a pseudonym for one genre but not for another, you could also add "written under the pseudonym ____" or "written as _____." If you are planning on writing more books with characters from the first, or in the same world, you can even limit this clause to a future novel-length work featuring characters from this book, or to the next book in this series, etc.

This way, if you write in multiple genres or have unrelated works in the same genre, you are under no obligation to approach this publisher first or to wait until the optioned book is ready for a publisher to see before seeking publication for those other books (for instance if they're in a genre this company doesn't publish).

Timelines—the publisher could give you a specific deadline by which you have to offer them the next book, or they could have a vague timeframe such as "within 3 months of publication" of the first book. They will also likely give themselves a cushion for making a decision with regards to this work. What you want:

Don't tie the pitch of the next book to the publication date of the first, as this could change or be delayed, and therefore unnecessarily draw out the process.
Don't agree to a deadline for the option work if you can't meet it with a polished manuscript.

Consider negotiating a limited amount of material, for instance first X chapters and a synopsis, not a full manuscript.

The publisher may give you a deadline for the work but want to start counting the time they have to get back to you after publication of the first work. There is no reason to do this (from the writer's perspective)!

The time they have should be tied either to the date you deliver the optioned work or the date they accept the first work. If it is tied to the latter, you should make sure any deadline you have for the option work is as close to the probable date of delivery & acceptance as possible—so that work you rushed to finish is not sitting with the publisher without being read, thereby wasting precious time.

Limit the amount of time the publisher has to make a decision and an offer. A few sources recommend 30 days, but the publisher may ask for more. I would definitely recommend keeping it to under 90 days as that is plenty of time to decide whether they're interested in this next book.
Limit the amount of time the negotiations can continue, so that you're not stuck in an endless cycle of negotiation for 6 months or a year, etc. The recommended limit I've seen is 30–90 days for the negotiations.

Consider that if the publisher has 90 days to make an offer and then 90 days to negotiate that offer, that's about 6 months of your time to which they are entitled before you're allowed to show the work to anyone else.

Any language limiting your ability to say no to a deal you feel is unfair is nonstandard and inappropriate. Just because the publisher has an option on your book does not mean you are required to accept their offer.

There should be language stating that if you cannot reach an agreement with terms for the next contract that you have the right to refuse the offer with no further obligation to the publisher.
Some publishers may want to have the option of topping/matching any offer you receive from someone else—Amazon, for instance, states this as a rule for finalists (perhaps semi-finalists?) in their breakthrough novel contest. Every piece of advice I've seen says that you shouldn't go for this.

As an aside, Amazon also says, as far as I know, that the contest's grand prize winner is required to sign the offered contract without negotiating. Personally, I think this is much too risky as you literally do not know what you're getting yourself into, and you've agreed to their terms before ever seeing the contract.

A well-negotiated option clause is important if you're interested in writing in multiple genres, for multiple age categories, both fiction and non-fiction, or simply for multiple publishers at once—for instance a vampire series for one publisher and a zombie series for another. Remember that just because you aren't obligated to show a work to your publisher, doesn't mean you can't offer it to that publisher if you have a great relationship and would like to continue being published by the same house. Negotiating this clause is about limiting your contractual, legal obligations, allowing you more freedom and control for the future of your career.

Questions? Thoughts? Corrections? Please leave them in the comments!

This post is a part of my Publishing Contracts sequence. Please click here to learn more about it and view the very important disclaimer.