Tag Archives: M. Scott Boone

Option and Right of Refusal Clauses in Book Contracts

A guest post by Scott Boone.

In Nancy DiMauro’s excellent post on reversion clauses from a week or so back, she mentioned the four critical clauses in your book contract: the granting clause, the payment clause, the indemnification clause and the reversion clause. This is the fifth critical clause with which you need to be extremely careful. Nancy knows all about option-type clauses, but she was nice enough not to steal the thunder from my post today.

Option-type clauses are the clauses in your publishing contract that refer not to the work being published, but to the work or works you create after the one being sold in that contract. Essentially, what rights does the publisher have in your next work or works? I’m going to talk about three main types: options, rights of first refusal, and rights of last refusal.

Publishers believe that they will not make any money off your first book. That is the received conventional wisdom. So in publishing you, they are investing in you as an author as much as or more than they are investing in that particular book. If they are going to take that risk and make that investment, they have a legitimate reason for wanting some sort of rights in the works you create after that first book. However, too often, these clauses put all the risk on the author without any risk on the publisher.

There is a question of how enforceable these types of clauses are in court. One that is unlimited in time and scope might stand a good chance of not being enforceable. The more limited in terms of time and scope, the more likely it is to be enforceable. However, you don’t want to put your eggs in that basket. None of them. If you end up in court fighting one of these, then in the big picture you’ve pretty much lost even if the court finds in your favor. Get it right on the front end during the contract negotiation.

So here are the three main types and how you need to think about with each one.


Option clauses give the publisher the right to purchase a later work at already set terms. They do not give the publisher the right to look at them first and make the first offer; instead, the publisher just has the right to purchase your next work on already specified terms. You’ve already agreed to it by giving them an option.

In their worst (and perhaps too common) incarnation, they specify that the publisher has the right to buy your next work on the same terms as the first. This is bad for you for at least two reasons. First, it means you cannot get any better terms, including royalty rates and advances, in your next contract. Remember that with a true option clause, the publisher can exercise it without any need to negotiate with you on terms. Those are already set. Second, if the option clause states that they can purchase the next work on the same terms as the first, those same terms include the option clause. The option propagates forward with each book, with no escape for the author. This can be incredibly insidious, and if you dig deeply enough, you can find horror stories of new authors stuck in these sorts of traps.

Look, it is not uncommon for a new author to get a relatively bad contract as their first contract. But an option clause that locks in future terms means that every contract after that will be a bad contract. Avoid these at all costs.

To make it clear, let’s look at them from another angle. An option clause obligates you but not the publisher. Therefore, you bear all of the risk and the publisher bears none. Let’s say your first book bombs. The publisher is not obligated by an option clause to buy your second book. On the other hand, if your first book is a big success, the publisher can buy the second book without having to give better terms. That’s a risk you bear. So you bear that risk while the publisher bears none.

If a publisher wants to lock in the right to your next work or works at set terms, then make them buy them with a multi-book contract. That way both parties bear some risk and it’s not all on you the author.

So what do you do if the contract you’re offered has an option clause? First, get rid of it. Get them to switch it to a right of first refusal or get them to make it a multi-book contract (if you are happy with the terms). If you can’t get rid of it, then either walk away or try to get the terms for the second work that are much better than the first and make sure an option clause will not be included in the contract for second work.

Further, make sure the clause is more limited than simply “your next work” or “future work.” That would include short stories, books in different series or even in different genres. If you are going to sign one, make sure it is limited to a certain form (long vs. short) and to that genre (or even better that series).

Finally, as with any clause conditioned upon the publisher doing anything, make sure the publisher has an objectively defined timeframe in which to exercise the right before losing that right.

The final word on options: Be very wary. Don’t even think of signing a contract with one unless the terms are good, do not include another option, and improve with the next work.

Right of Last Refusal

The right of last refusal is a clause that gives the publisher the right to match any offer for your future work made by another publisher. It’s a bit deceptive in how bad these are for the author. On first glance, they might seem to be not as bad as a straight option clause, but once we dig into how they work, we’ll see how they can actually be worse.

The right to last refusal basically gives the publisher the right to match any other offer. That means they have the right to buy the book at terms that match the other publisher’s terms.

They don’t seem too bad until you start to think about what such clauses do to your ability to get another offer. Put yourself in the shoes of the editor at the other publishing house. In order to make an offer to buy a book, you have to put in a lot of work. You have to read and evaluate the book. Then you have to champion that book to several other constituencies in house. Are you going to want to invest in that book, both in terms of time and workplace capital, if the first publisher can snipe the book out from under you for the same terms? Not likely.

So, while it appears that a last refusal clause gives you the ability to improve the terms of the next contract by getting a better offer somewhere else, that’s not a very realistic option.

Additionally, because the original publisher does not have to make a yes or no decision as they do with an option clause, you might actually get worse terms in the second contract. An option clause at least locks terms in. If your ability to go anywhere else is blocked because no other editor wants to invest the time to make an offer on a book subject to a last refusal, the original publisher can actually offer you worse terms because they know you don’t have any other options.

The final word on rights of last refusal: Don’t.

Right of First Refusal

The right of first refusal gives the publisher the right to be the first publisher to see your next work and the right to make the first offer on it. Unlike the option clause, the publisher cannot unilaterally purchase your next work. You have to agree to their terms. That’s not a bad deal for you as an author provided the right is limited.

You want a good and prosperous relationship with your publisher that spans multiple books. One in which both of you do well. And if you are writing a series, you really don’t want to switch publishers mid-series.

While the presence of this clause should not cause you to reconsider the contract, you should seek to limit it in at least two ways.

First, you should limit what works it covers. It should specify novels and not short works, unless your publisher does in fact publish short works and on terms you would like. It should also be limited to that specific series, or if you can’t negotiate for limiting it to that series, it should be limited to books in that particular genre.

Second, you should limit how much time the publisher has to respond once you have submitted the new work to them. The traditional publishing process is incredibly slow as it is. You don’t want it slowed down even further.

The final word on first rights of refusal: Fine if properly limited.

The Takeaway

Work to limit a right of first refusal in scope to a particular series or genre and in the amount of time the publisher has to make the offer. Avoid options and rights of last refusal.


Guest Writer Bio:
M. Scott Boone lives in Atlanta, Georgia, where he works as a law professor in order to support a clowder of cats. He writes about legal issues affecting writers at writerinlaw.com. When not writing or teaching, he is a self-proclaimed soccervangelist.

The Basics of Copyright

A guest post by Scott Boone.

Why are we talking about copyright?

As a writer, copyright is one of your primary assets. I’d put it right next to your reputation. If you are trying to build a career, copyright provides you with a legally enforceable means to reap monetary benefits from your work. It also gives you a high level of control over what is done with your work. Realize that what that means is that once you give up the copyright (by transferring it to someone else), you lose both, and you are limited to whatever the contract gives you.

What is copyright?

Copyright is a set of rights in a work of authorship. The exact scope of those rights differs slightly from country to country, particularly with respect to limitations and to moral rights, but the basic ones are the same. In the US, copyright gives the owner the exclusive right to reproduce the work, to prepare derivative works based on the work, and to distribute copies of the work. US copyright also gives additional rights depending on the types of work: to publicly perform the work (conduct a book reading, put on a play), to publicly display the work (hang a painting in a gallery), and to digitally transmit an audio work (streaming a sound recording).

These rights are “exclusive.” That means that they give the holder of copyright the power to prevent others from doing them. They do not affirmatively give the copyright owner the right to do them. So, the owner of a copyright in a work might not be able to distribute the work if some other law made it illegal to do so (e.g. because it was obscene or defamatory).

The rights last for a long time. In most countries, the duration is set at the life of the author plus an additional 70 years.

Importantly, copyright can be transferred in small bits and pieces. In other words, you do not have to transfer all the rights as one unitary block. You can limit a transfer by time (e.g. 6 months from publication for a short story) or by geography (e.g. North America) or by type of copy (e.g. hardback or trade paperback or eBook). The key is not to give away more than what a publisher is paying you for it.

 What does it take to get copyright?

For the vast majority of countries, you simply need to either (1) create the work or (2) create the work and fix it in a tangible medium of expression. That’s the standard set for countries that are members of the Berne Convention (166 countries and the Holy See). That’s it. Now, the US gives you some nice benefits for doing more (registration and notice), but it’s not required for obtaining copyright.

 US Copyright Law

I’m going to focus the rest of the discussion on US copyright law. Partly because that is what I know best and partly because the US cut its own path in copyright law for a long time and so has some differences in its law and lingering confusion among its creative professionals. Essentially, most of the rest of the world agreed on the basics of copyright in the late 19th century and the US dragged it feet screaming it didn’t want to play for the better part of a hundred years.

 Registration – Not required, but recommended

Registering your work with the Copyright Office is not required for you to obtain copyright. Remember you have copyright in your work as soon as it is fixed in a tangible medium of expression. However, registration does convey significant advantages that you may want to consider. First, after five years, registration of the work serves as prima facie evidence in a lawsuit that the registrant owns the rights in the work. In other words, it shifts the burden to the other party in the lawsuit to prove you don’t own the copyright. Second, timely registration of your work makes statutory damages available to you in an infringement lawsuit. Actual damages are often quite hard to prove. So having the option of statutory damages, where the court just sets a dollar amount for each work infringed, can be quite helpful. Third, timely registration also makes attorney’s fees available if you prevail in an infringement suit. If you win a suit, the infringer has to pay your attorney’s fees. The latter two benefits can make a huge difference in whether it is financially worth it to pursue an infringement claim. They can also serve as a large sword hovering over infringers, making them more amenable to settlement.

So what constitutes “timely registration”? A published work is timely registered for these purposes if it is registered either within three months of first publication or before the infringement begins. An unpublished work needs an effective registration date prior to the infringement.

 Copyright Notice – Not required, but useful

Copyright notice is either the word “copyright” or the copyright symbol (a ‘c’ in a circle) followed by the date of first publication and the name of the copyright holder.

Before the US became a signatory to the international copyright treaty, the Berne Convention, copyright notice used to be required for obtaining any federal copyright protection. If you published the work without copyright notice, it was dedicated to the public. In other words, it was not protected by copyright and was free to all. However, since 1989, the US has not required copyright notice. This was a part of the US harmonizing its law to the international standards set by the Berne Convention.

But you still probably want to put copyright notice on your published works. First, it tells the world that someone is claiming the rights in the work. There are still people out there who think what they find on the internet is free. Second, copyright notice removes the statutory defense of “innocent infringement,” a defense that can lessen damages in an infringement suit. Lastly, it is cheap. In fact, it’s pretty much free. So why not do it?

You will note that I did say “put copyright notice on your PUBLISHED works.” I specified published works because you can create confusion about the works publication status if you put copyright notice on something that has not yet been published. If you submit a work to an editor with a copyright notice on it, the editor may think it has been previously published because the industry practice is to use copyright notice after publication. At the very least, the editor will think you do not know how the industry works or think they may have a potential problem with prior publication. Do you really want to create more hurdles for yourself?


Guest Writer Bio:
M. Scott Boone lives in Atlanta, Georgia, where he works as a law professor in order to support a clowder of cats. He writes about legal issues affecting writers at writerinlaw.com. When not writing or teaching, he is a self-proclaimed soccervangelist.