What Are Option Clauses?

What’s first right of refusal? Can I snag a two-book deal? Is an option clause good or bad?

You did it! You conquered the hard part of writing a manuscript, and now you’ve snagged the attention of a publisher. But are you ready to read a book publishing contract?

In this blog series, we’ll cover some of the basic elements of a publishing contract, as well as questions we’ve received from authors in the past. We hope this helps you feel more prepared and knowledgeable when you’re at the table.

Note: This should not be taken as legal advice. As a publisher, we review our contracts with a publishing attorney, and we’d recommend consulting your own legal counsel if you have any questions.

You’ve probably heard of the enviable multi-book deal, where some lucky author signs an agreement worth six or seven figures with a publisher. But while this specific example is probably only possible for the dwindling number of mega publishing houses, most publishing contracts generally include what is called an “option clause.”

An option clause allows a publisher to consider the author’s next book for publication. In other words, an option clause gives a publisher some kind of “dibs” on your next book. This can take a few forms:

• Right of refusal
• Right to negotiate
• Right to publish

Option clauses should include:

• When the publisher can execute this right
• What you have to show the publisher
• When you have to show them
• What the terms of the subsequent agreement will be
• When the publisher has to decide

If you’ve received an offer with an option clause that does not include these details, remember that you can always enquire about what they are and request that they’re specified in your contract. If the terms offered don’t meet your expectations or feel right to you, you can negotiate.

Types of Options

Right of refusal/Right to negotiate

Right of refusal or right to negotiate both provide a publisher with the ability to consider the author’s next book and decide if they want to publish it. Often it’s “first right of refusal/to negotiate,” meaning the publisher has the right to consider the manuscript before the author approaches any other publisher.

But tread carefully – some contracts may specify “right of last refusal,” meaning that even if the publisher initially turns down a manuscript, it can come back and match another publisher’s offer to acquire the book. More on this in When the publisher can execute this right below.

Right to publish

Right to publish is the more straightforward, two-book deal situation, where a publisher essentially acquires the next book – often the next book in a series, in a specific genre, or on a similar topic.

Depending on the publisher and the author’s relationship with them, this could either be an exciting and encouraging sign of the publisher’s faith in the author and their work, or it could be a limitation that weighs on the author and their career prospects.

Limitations and Details

When the publisher can execute this right

Along with the type of option discussed above, this is probably the most important part of an option clause. Is the publisher asking for first or last right?

First right gives the publisher an opportunity to consider a manuscript before the author considers another publisher. Last right allows the publisher to step in later, perhaps after the author has received another offer. While the original publisher should be able to match the terms offered by the second publisher, if the author was unhappy with their original publisher for any reason, it means they could be stuck with that publisher again.

What you have to show the publisher

An option clause may specify that the author needs to submit one of the following, or a combination of:

• A proposal
• An outline/summary
• A portion of the manuscript (specified length)
• The full manuscript

Ideally, the author should only need to submit a proposal and/or summary of the second work. But steer clear of or negotiate an offer that specifies “full manuscript” delivery.

A publisher should be able to make a decision about whether they want to acquire a work without the full manuscript, especially if they want to contribute to the development of the work. Plus, they should know the author’s writing style and ability, having already published one book.

When you have to show them

When does the publisher want to consider the author’s next work? After editing the first work, or a specified amount of time after it’s published? Or simply after the author has developed the required pieces to submit for the publisher’s consideration?

This detail may depend on the publisher’s publishing calendar, especially if they tend to acquire works early and plan publication seasons (or even years) ahead, with time for editing/production to be completed before prepublication marketing begins.

Or a publisher may want to allow three to six months after the first book is published to get a better idea of a book’s (or a series’) marketability and the author’s involvement in marketing their work.

If when you need to show the publisher is not specified, it may just be that the publisher is flexible – open to considering a work before the first book is published, or considering it months or even years down the line, when the author has had time and space to properly develop their next work. If you take the latter route, you’ll want to keep in touch with your publisher to continue that relationship and share occasional updates about how the project is progressing.

If you share an idea for your next work before the first is published, be sure to include all required submission materials and be clear about your intentions. It’s not unusual for an author to discuss an idea for another book with their publisher, especially to test the waters and get the publisher’s initial thoughts on development. Just don’t assume that discussion has fulfilled the option clause.

What the terms of the subsequent agreement will be

An option clause may specify the terms of the contract for the second book – for example, what the royalty rates, deadlines, or other details will be. Or similarly, an option clause may stipulate that the second work will be published under the same terms as the first.

Either way limits what the author can expect in an offer for their next work, and it could eliminate their ability to negotiate that offer – all before the work’s topic, length, and marketability may be known, as well as how their initial book performed.

The better route here is an option clause that specifies the publisher will acquire the second work “on terms agreeable to both parties.” This provides the opportunity for both parties to negotiate terms, and if one is not satisfied, to walk away entirely.

When the publisher has to decide

Finally, the option clause should indicate how long the publisher has to make a decision about whether or not they want to publish the book.

For example, it may give the publisher 15 or 30 days after receipt of the submission materials (proposal, excerpt, etc.) to decide. This kind of time limit is intentionally short so the publisher must decide quickly if they want to publish the author’s next book. Or a clause may include negotiations in the timespan given, with deadline being whenever both parties agree negotiations are over.

Are Option Clauses Good or Bad?

So are option clauses good or bad? Well, it really depends.

It depends on the terms of the clause. It depends on the publisher – and what terms they’re willing to offer – but it also depends on the author, and how well those terms match up to their goals. What are the author’s goals for their books – the initial and subsequent work? What are their writing career goals? Do they want the opportunity to auction their next work? Or would they prefer to continue working with their current publisher?

Most importantly, what was the author’s and publisher’s experience like working together on the initial book? In the best case, an option clause can be the beginning of a long-term relationship between an author and publisher, where both benefit from trust built over time and experience, belief in each other’s work, and financial security for both parties.

I like to assume everyone has the best intentions, whether we’re interacting in a work-related, professional, or personal capacity, and to remain mindful that you never know what another person may have going on in their life outside your interactions with them. But try as we might, some people may just not work well together.

Either party may have a different communication style or work ethic that unintentionally creates friction. An author may feel that an editor they’re working with, independently or at their publisher, doesn’t fully grasp their intentions or vision for a book. Or in the worst case, one or both parties may begin to feel the other is not working with them in good faith.

As with any contract or agreement, it’s best to do your homework. Know what your options for an option clause are, and think about what might be right for you. Find out what other writers who’ve worked with that publisher think about them – both from testimonials on the publisher’s website and third-party resources, like Google Reviews, Trustpilot, and the Better Business Bureau. Seek legal advice as needed.

Did your publishing contract include an option clause? Tell us about your experience in the comments.