Model Trade Book Contract

23.

Publisher’s Right of First Negotiation.

If Author intends to submit or authorize publication of a next book-length work, Author shall first offer Publisher submit a proposal or the manuscript to Publisher and provide Publisher the opportunity to Publish the next book-length work. If Publisher wishes to acquire such next work, Author and Publisher will attempt to reach an agreement as to terms during a reasonable period of exclusive negotiation, but no longer than 60 days, after Author's delivery of the proposal to Publisher. If Author and Publisher do not reach an agreement on the material terms within such period, Author is free to independently Publish the work or submit such next work elsewhere and Publish it with another publisher or on his or her own. For avoidance of doubt, this right of first negotiation shall terminate upon termination of the Agreement for any reason.

Commentary

Most major trade publishers have some kind of option clause in their standard contracts to obtain the right to publish the author's next book. The wording and effect of such clauses varies, but generally they give the publisher first dibs on the next book. Some options are relatively benign, granting the publisher rights of first look or first negotiation (i.e., the right to see the next book first and negotiate for a limited period of time after reviewing it). Clauses that instead grant the publisher a right of last refusal (i.e., even if the publisher turns it down at first, it can come back and match any other publisher's offer) are unfair, as it greatly impedes the author's ability to sell that book to another publisher. It is also unfair to demand to wait to decide on the next book until after the first book is published, and especially egregious to require that the next book be completed before the publisher makes up its mind. It prevents the author from obtaining a much-needed advance to write the next book. Such provisions unfairly impede an author's ability to write and publish.

 

Some publishers are willing to remove these clauses in their entirety, but if your work fits in a series or is written in a genre that favors multi-book or serial works, the publisher may not be willing to negotiate for its complete removal, in which case we advise negotiating some or all of the following points to limit the option:

 

  • Avoid options on the "same terms" as the previous contract and "last refusal rights" (allowing the publisher to acquire the work by matching other offers the author has received). They eliminate your negotiating position for your next work, even if your first work proves highly successful. At the very least, change these terms to permit the publisher a limited time "right of first refusal" on terms "to be mutually agreed upon" at the time the second contract is negotiated, as illustrated by Section 23 of the Model Contract.
  • Provide that the author must submit only a summary or proposal of the optioned work, not a complete manuscript. You should not be compelled to write an entire manuscript without an advance or certainty of acceptance. If the publisher rejects the optioned work, which it has every right to do under the option clause, you will have lost your time, effort, and expenses, unless you can sell the work elsewhere.
  • The publisher should have to decide whether or not to make an offer for your next work within a short time after submission or acceptance, not after publication, of the current manuscript. Allowing the publisher to wait until after publication of your current work to exercise the option will probably delay the decision on the next work, thereby delaying your publishing activity for months or even years. It also gives the publisher the chance to assess the commercial success of the first work before deciding on publishing the second.
  • The period during which the publisher must decide whether to exercise the option should not exceed 30 days after submission of the proposal or summary; a 60- or 90-day period could mean a costly delay, making the restraints on your freedom to bargain in the marketplace even more damaging.
  • If the current work is co-authored, the option clause must be clear about whether it covers the next work of either co-author individually or both together.
  • Try to limit the option clause to cover only books in the same specific category as the current work (e.g., "biography for children" or "computer industry study").

 

The Authors Guild believes, as an advocacy matter, that if the publisher wants an option in any other circumstance, the publisher should pay an upfront option fee for it. We recognize this is not an industry practice—not yet, at any rate. But it should become one. A publisher should never have the right to prevent or delay an author from selling a book unless it pays an additional amount to hold up that work for some period of time, as a film studio would when buying film option rights on a book.

 

Fair "next book" clauses do exist and may be appropriate where the publisher invests in marketing, but they must be strictly limited. If an author is agreeable to providing the publisher an option, it should be subject to the limits described above.