Authors, Beware of the Option Clause!
When a good thing actually might not be so good for you...
I’m celebrating my six-month anniversary of being a literary agent! After a 15-year career in publishing led me to this point, I want to share some of stories I have heard from authors that have shocked and worried me now that I’m negotiating contracts and seeing offer letters. I’m spilling the tea so that hopefully you won’t make these mistakes whether you self-publish or publish under a traditional contract.
Options are NOT always good for writers
Please understand what an option is. An option gives an exclusive period of consideration of your work to a company that has invested in one or more specific works. This sounds like a great thing, right? But when the scope of the option is too broad, you may find yourself bound to a company in a way that does not serve your business.
Let’s look at an example. (And please note I am not a lawyer and this is not legal advice! If you are not my client, I also cannot give you advice except general information about how things work. When in doubt, seek expert guidance for specifics that apply to your situation from places like The Authors Guild.)
Example: You write a three-book series about teenage vampires and an audiobook company reaches out to you/you reach out to them. They offer you a contract to produce your audiobook and they are going to pay you! Wow!
Fantastic. Now, let’s look at all the terms of the contract, and specifically the option. Here are the questions you should ask:
a) How long is the term of the option? One year after publication of the work(s) under contract? Ten years? Forever?
Before you give anyone an exclusive first look at your work, make sure you’re not giving them an unreasonably long advantage. If you partner with someone with an option that is 7-10 years, that may seem standard. But what if you want to query a new book or submit to a publisher? Can you do that if there is an option in place?
Maybe. It depends on how the option is worded.
That leads to the next question: b) Does the option apply to in-series works or new works only?
If you sold a teenage vampire series and your option applies to in-series works, then you know that all new works in that series have to go to the optioning company first. Only after you have given the optioning company that first exclusive look, and after they have decided whether or not they want to make an offer on that new work, can you then leverage those rights elsewhere.
But what if—and I have seen this, friends, it’s out there—the option applies to ALL NEW WORKS?
That means what it says… If you, the author of teen vampire books, decides to write horroromance or self-help or memoir, that’s a NEW WORK. And if you signed a 7-10 year option, you may have to give that company first look at anything you write under that option before you query an agent or submit to a publisher.
c) Another important issue to understand: How long does the optioning company have to make a decision about your work and what materials can they require before making a decision about that work?
Imagine having a one-year option that requires you to write and even to revise a work in full before the optioning company makes a decision! Think this cannot happen to you? If your option clause is too broad, the optioning company can interpret it to their benefit—not yours. Know how much material (a proposal, a synopsis, a full manuscript, etc.) they are entitled to review and make sure the contract is crystal clear on what you owe them and what they owe you.
Yes, you may not agree on terms and that option may be easily fulfilled by you simply saying no, no, no. But it may not be that simple.
Do you want to give anyone exclusive access to and control over your work? If you do, how long do you want to be bound to that company under the option?
When you’re considering an option, make sure you understand these key questions:
How long is the option?
What material do you have to deliver to the optioning company to satisfy that option?
Is the option specifically inclusive of New Work or Related/In-Series Work?
How long does the optioning company have to make a decision about your work before it’s free to be marketed elsewhere without limitation?
If the time period of the option is something you’re comfortable with AND that the advance/payment terms justify the time period for that option, then just make sure you understand how those factors will impact your author business.
And yes, in case you’re wondering, all of these issues are negotiable! This is why literary agents can be so valuable even for indie authors. We can tell you what’s too broad, too vague, potentially damaging, and how the contract terms will impact your behavior day to day as an author.
Yes, some of these terms are standard. An option clause is standard. But an overly broad, overly long duration for that option is a way indies get trapped—and should be negotiable before you sign anything.
As always, look at the terms of every contract carefully.
Do not get so excited by an opportunity that you don’t strategically think through how this will impact your options in the future.
Seek out expert advice—it’s out there and there are people willing to help! If you financially can’t join The Authors Guild or don’t have trusted resources, this is the time to make author friends, follow agents on social media, and engage in conversations. Sometimes you do not have to be an insider to get the inside scoop. Lots of agents answer questions for writers on Threads simply because at our core, we’re advocates for writers! We want you to be successful, to have good information, and to protect your valuable intellectual property.
Follow me on Threads or mention me here and ask if you’re an author who isn’t sure what resources to trust!
Sage advice. A genie capable of demystifing the business end of our labours is a rare treat. Thanks for shedding light.
Such great advice!