I’ve written previously in this column about option clauses in publishing contracts, focusing on the pros and cons of options versus multi-book deals, but in this column I want to look at how option clauses work on a more nuts and bolts level: how they impact authors thinking about their next work. Not all publishing contracts have option clauses, and not all option clauses are the same.
If you’re worried about what you can do with your next project—when you’re already under contract for an earlier project—check to see if your contract has an option clause and, if so, what is the scope of the option. For example, if you have a romance novel under contract, your option (if there is one) might say that you have to give the publisher a first right of refusal over your next romance novel, or your next novel, or even your next “work.” Obviously, the more limited the option clause, the more leeway you have to share work outside those limits with another publisher, so if your option is limited to romance novels and you have written a picture book, you can send the picture book to whoever you want—provided you are not restricted by any other clauses in your contract (e.g. a non-compete clause).
But what about the situation where you are ready to share your next work that falls within the option clause? Does the option mean you have to sell your next romance novel to the first publisher? Or that the publisher can sit on your next manuscript as long as they want without giving you an answer about whether they want to publish it?
Because options are creatures of contract, you have to look at the exact terms of your contract to see what your specific rights and obligations. However, most publishing contracts do not require you to accept an offer made by the publisher on your option manuscript. They generally specify only that you and your publisher will negotiate in good faith over the new project to see if you can come to agreeable terms. If you cannot come to an agreement, the option ends and you can send your work to other publishers.
Some option clauses additionally say that if you fail to come to terms with the original publisher and you pursue other publishers, the first publisher will have the right to match terms offered by another publisher; or, that you won’t accept an offer from another publisher on less favorable terms than the first publisher had offered you.
If you do come to an agreement with your original publisher for your option book, then the contract for the new book is a whole new contract with its own terms—which may also include another option on your next book. So there will be a new advance figure, new royalty terms, etc.
There is also the question of when you can submit your option book to your publisher. Most publishers will not look at an option book before “delivery and acceptance” of the final revisions on your first book. This term is very common and very confusing because many authors assume that “delivery and acceptance” means the point in time when the author is happy with the manuscript, when the author has responded to editorial suggestions, and/or when the delivery date for the manuscript in the contract occurs. Technically, none of this is “delivery and acceptance.” It may be “delivery,” but we often forget about that important term “acceptance.” The editor has to formally sign off on the manuscript: that is, agree that what has been delivered is satisfactory for the piece to go into production (or to go to an illustrator if it’s a picture book, graphic novel, or other illustrated work).
An editor should tell you when the first book has been “accepted,” and, if they fail to do that, and you believe you have satisfied all of your contractual obligations, you should ask for that assurance. This sign-off will indicate both that you should be receiving any portion of your advance that was due on “delivery and acceptance” and that you should be in a position to submit your option manuscript.
Your contract will probably provide a deadline for the publisher to decide on the option manuscript once it is submitted: maybe 30 days, 45 days or 60 days. At the expiration of that time, if there is no agreement on a new contract, you will generally be free to take the manuscript to another publisher.
Options can be confusing and challenging and I know I’m not giving particularly precise answers here to common questions. The problem is that, like all issues arising from a contract, the terms vary between publishers and over time, so it is important to understand what your publishing contract says before you sign it in relation to options. If you have thoughts at that time about what your next project is likely to be and when it’s likely to be ready, it may be worth discussing with your editor to see if it is possible to draft the contract accordingly. And sometimes it is possible to tweak an agreement down the line if you are ready earlier than planned with a new manuscript and if the editor has the bandwidth and ability to consider it earlier than the contract specifies. But as with all contract issues, an ounce of understanding at the outset can be worth a pound of cure down the track.
As always, this column is not intended as formal legal advice, and if you are concerned about how your particular contract works, you should seek advice from an expert.