What's an Option Clause?

A Nuts and Bolts Post

Hi friends,

I thought I’d bring it back to basics today and talk about option clauses. If you’re signing a contract, or thinking about what your next book might be, you may need to consider what your option clauses says—or doesn’t say.

So, what’s an option clause? It’s a clause in a book contract that gives the publisher first dibs on your next book. You should pay VERY CLOSE attention to this clause if you don’t have an agent, because sometimes publishers throw all kinds of restrictive things in there. Why? Well, because they’re a business investing in your work, and they want that investment to keep paying off. I don’t think publishers do this to be evil, but remember, they work for them, not you.

Your option clause usually covers:

—What you have to show them. This is usually in line with the book you’re publishing with them and should not be ALL or ANY next book you’re doing. And CERTAINLY NOT more than one book! For example: if you sold an adult fantasy novel, then that publisher should get to see your next full-length adult fantasy novel. It will also say if you have to show them a full manuscript, or a proposal and sample chapters. Some publishers balk at just how narrow this gets defined, and it can vary publisher to publisher, book to book. But the author wants it the MOST narrowly defined, so they can write different kinds of books without waiting for the option clause, and the publisher wants the broadest clause, so they get a chance to see everything the author writes first. The end result is usually somewhere in the middle.

—When you have to show it to them. Ideally, you want to be able to show them your next book as soon as possible. But publishers want to see how your first, or their book, sells before they buy another. These two things are at odds, which means there is usually a meeting in the middle. (Sound familiar? That’s what negotiations are all about.) I like the option period to start within a reasonable time after the first book has been accepted by the publisher. That means after editing, and copyediting, and all that is done. Publishers usually want this period to start after publication, but that is TOO LONG to wait, imho. We can usually get publishers to start 30 days after acceptance, to get a little more breathing room, but sometimes it’s 45, 60, or 90 days after acceptance. It varies from book to book, publisher to publisher. But my goal is to not have the client wait too long to be able to send in an option book or proposal.

—When the publisher has to decide. Then, we define how long the publisher gets to decide if they want the book or not. It’s usually 30 days, or until everyone decides negotiations are over. That’s not usually a big fight, but you definitely want an end point in there or the publisher could sit on it however long they want.

—What you have to accept, or not. First off, you never have to accept an option offer from a publisher, ever. Tbh, you are never obligated to accept an offer from ANY publisher EVER, so even if the publisher makes an offer on your next book, you do not have to take it. (You also can’t tell them to hold on a sec and see if you can get another elsewhere. You have to say yes or no right there.) But some option clauses stipulate that the option offer will be the same as the last offer you got from them. No thank you! I always take this out. Each offer should be made independently of the previous deal. Watch, too, that your option clause doesn’t have something that says hey if you show this to another publisher, and they make an offer, we get a shot at matching it, and if we do, you have to take our offer. YUCK! I hate that! We never agree to matching clauses like this, and you shouldn’t either.

This isn’t everything in an option clause, but these are the high points. As always, YMMV and different things are important to different books, authors, and publishers.

And some agents take out option clauses all together. Why? Because that’s what’s important to their clients and/or they’ve had success with that before and like it. I have found that most publishers don’t LOVE taking out option clauses, and getting a really well defined one is better than fighting the uphill battle of getting it out altogether. You have to choose your battles. I think option clauses can benefit the author by clearly defining when, what, and how the publisher has to respond to their next book idea. I like it all laid out like that so there’s no ambiguity. Without an option clause (the way I like them), the author could want to publish another book with their publisher, and send them something, and the publisher could just sit on it for however long they want. There’s no mechanism to force them to make a decision. As an author, what do you do then? Try another publisher and cross your fingers? Wait and wait because you like your publisher and want to work with them again? Tbh, you can be in that situation even with a good option clause, but at least with it you have some leverage to get an answer.

But Kate, I sometimes hear, my book came out SO SO long ago and my agent died/my imprint closed/my editor left so I’m SURE my option clause doesn’t count, right? WRONG! Your option clause is with your PUBLISHER, not your agent, editor, or imprint, so if you’ve got one, even if it was decades ago, you still have to figure out what it says and who you have to contact. It’s likely that publisher will let you get out of it if it’s been a very, very long time and everyone’s moved on, but you legally have to get that in writing, or they can come after you. Will they come after you? ¯\_(ツ)_/¯ but they could.

Note, too, that your option clause impacts what book you can write next, whether it was your idea, or if someone asks you to write it for them, like a work-for-hire project. If your option gives the publisher first dibs on your next science fiction novel, and someone at Star Trek taps you on the should to write something new in the Picard universe, you gotta clear it with your publisher, because technically, they have dibs on your next science fiction novel period. My experience is that publishers are understanding about these things, but still. You have to check. Navigating this is where an agent comes in VERY handy.

Ahhhhh, it felt good to get into the nitty gritty of publishing things. I hope you found this helpful. If there are other topics you’d like to hear more about, let me know here in the comments, by email, or on twitter! And check the archives! (Here’s a helpful post, too!)