For authors, signing a literary agreement can be both exciting and nerve-wracking. While authors may be thrilled to see their books in print, they need to ensure that they're getting the best deal possible. Literary agreements include many provisions that authors should pay particularly close to, including clauses that address copyright ownership, royalties and subsidiary rights. Some agreements may include a morals clause. One particularly important provision is the options clause. This clause gives the publisher the right to purchase additional works by the author, but it also has significant implications for the author's career and earnings. In this post, we'll, explore what options clauses are, how they work, and what authors should consider when negotiating them.
WHAT IS AN OPTION CLAUSE?
An option clause is a provision in a contract between an author and a publisher that grants the publisher the exclusive right to publish an additional work at a later date. Some option clauses only give the publisher the right of first look or first negotiation. In some instances, an option clause may also specify the terms of the subsequent agreement, including royalty rates, deadlines, and other details. Authors should be careful that their option clauses only require them to provide the publisher with a summary or proposal of the optioned work. Without doing so, an author may have to complete the optioned work before they can receive an advance payment.
Option clauses are often included in literary agreements because they provide publishers with the ability to secure future rights without committing to a full-scale acquisition upfront. This allows them to assess the potential success of an author's work before committing additional resources to that author. The options clause also provides authors with a degree of flexibility and potential for additional revenue streams.
WHAT SHOULD AN OPTION CLAUSE CONTAIN?
The option clause should have clear and definite terms. There have been a number of court cases, particularly in New York, where an option was invalidated because it was not specific enough about what the clause actually required of the parties. The clause cannot just require that the author and publisher use their "best efforts" to reach an agreement." The material terms of the option must be unambiguously stated.
Authors should try to negotiate option clauses that are as narrow as possible. Authors should look out for the following:
Publishers will want to make the language of the option clause very broad, sometimes covering whatever the author writes next. Authors should try to narrow the clause by limiting it to one book that is a follow up to their previous publication. This means that it is either next in the series or related in some way—either by genre or subject matter– to the previous book or work that was covered by the publishing agreement.
Authors should not be required to write the entire manuscript for the Publisher to know if it wants to exercise the option. Ideally, authors should only submit a proposal or summary of the optioned work. These materials should be enough for the publisher to determine if they want to extend an offer – and pay an advance — on the optioned work.
Authors should make sure that the contract clearly states when the option period begins and how long the publisher has to consider the option material. Usually, the period begins either upon acceptance or publication of the last work in the contract. Ideally, a publisher will not have longer than 30 days to consider the submission before making a decision.
Option clauses are highly important provision in literary agreements. Authors should take careful consideration of the terms of an option clause before signing a contract with a publisher. If you are an author who has been offered a publishing agreement you should have an experienced attorney review the contract before signing.
Contributions to this blog by Keegan Dyer.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.