Granting Rights and Option Clauses in Literary Contracts

Two of the more important areas of a literary contract are (1) the section discussing the author’s granting of rights of copyrighted materials to the publisher and (2) the option clause.

Granting Rights

Authors should carefully consider which rights to grant to a publisher, as this choice may have far-reaching consequences. Some contracts will stipulate that the publisher is limited to producing a work in a specific format (print or e-book) as well as the right to reissue the work in a different format, e.g., large-print format. Other contracts may grant rights to publish the work in additional formats such as audio, film, or foreign languages. The publisher may also receive the right to negotiate additional contracts with a third party. The contract should specify a time period for when the rights are granted: the life of the copyright or a shorter period of time. If possible, the rights of the work should be returned to you once the publisher is no longer exploiting the work in order to generate sales.

Option Clauses

The option clause can be good or bad for an author. An option clause requires an author to sell her next work to the publisher on the same terms as those in the current publishing contract. It prevents the author from submitting the book to any other publisher unless the original publisher decides not to take the book on the pre-established terms. On one hand, the option clause can give an author the assurance that the publisher will be willing to consider a future work. But, it could also tie you to a publisher with whom you no longer wish to work. Option clauses often benefit the publisher, not the author. For an author’s maximum protection, option clauses should be very specific, e.g.: the next book-length work if such new work is a sequel or contains characters that are introduced and developed in the specific work published under this agreement. The option clause may state that you have the right to share other works with different publishers and to enter into publishing agreements with other publishers. You should negotiate the option clause with your publisher so that it benefits both parties.

Take the time to understand and consider all parts of a literary contract before signing. If you do not have a literary agent representing you in the contract negotiations, you should consider hiring a literary attorney to review the contract. Doing so will certainly prove to be a sound business decision in the long run.