Jane Dystel explains the option clause

So many of my first-time clients ask why they have to have an option clause in their contracts that I thought I would write about it.

First, what is an option? An “option” is the author’s promise to show the publisher his or her next book before showing it to any other publisher. That’s it.

I actually don’t mind options. With this “promise” from the author that s/he will show the publisher his/her “next” book, the publisher is, therefore, more committed to investing in that author’s future. And, as we will see here, the author isn’t giving up anything other than a bit of time.

The important thing about options is that they must be very well defined. What to I mean by this?

First, if the author is a novelist, then the option should only be for his or her next novel. Even narrower, if the author is writing a mystery series, for example, the publisher should only have the option on the next book in that series. All other books that an author might write – non fiction, cookbooks, or novels in another series do not fall under the option and the author should be free to sell those at any time. This should apply to all book categories. If the author’s next book is in another category, she should not be obligated to show it first to her current publisher (although there is no reason why that publisher shouldn’t see it at the same time everyone else does).

Second, the timing of the option is critical. The option should kick in after the publisher accepts the current manuscript NOT after the current manuscript is published. There should be no time defined after acceptance. For example, there are publishers who try to say that the option shouldn’t take effect until 60 or 90 days after acceptance. This is unfair to the author and should not be permitted. (The reason the publisher does this is to get as close to the publication date of the current book as possible in order to ascertain how it will do. They then base whether they will bid on the next book and how much they will offer based on the indicators of the first book’s success.)

Finally, there should be a time limit for negotiating the option. The publisher should have X days in order to consider the next project (I think no more than 30 days is appropriate) and if necessary Y days to negotiate in the event they make an offer. After that time limit, the author should be free to approach any other publisher.

There should be no “topping” or “matching” privileges. If the author has given the publisher adequate time to make an offer and negotiate and they cannot come to an agreement, the author should not be obligated to come back to the original publisher for any reason if he gets another offer.

So there is no real reason to object to having an option in your contract IF it is negotiated properly. Of course, in practice, you cannot always get the ideal option clause; much depends on what kind of leverage you have and how many precedents your agent has with that publisher. But, these simple qualifications make it fair for all involved.