Negotiating your contract: options and non-competes

23.09.20

One of the most exciting moments of your author’s journey is to receive a publishing contract for your work. However, it is essential (after the necessary celebration, of course) to take the time to review your contract carefully before signing.

Our Contract Assessment Service receives many queries about key terms to negotiate with publishers, so over the next few weeks we’ll be running through some issues you should consider when negotiating your publishing contract.

Options and Non-Competes

The ASA encourages all writers and illustrators to be careful about agreeing to broad non-compete and option clauses in their publishing agreements. If you are building a writing career, you want to ensure your choices are not hampered by restrictive non-compete and option clauses. 

Option clauses 

An option clause allows your publisher to have the first right of refusal over your next manuscript and is usually drafted such that you cannot negotiate with any other publisher unless you have firstly followed a set procedure with your current publisher. This may be onerous if you work with a range of publishers, for example if you have one publisher for your science fiction work and another for your romance fantasy. Or if you have signed with a publisher for your non-fiction book but believe your next work of fiction is more advantageously placed with another publisher. Think carefully about your circumstances and whether you need to keep your options open.

If you are going to agree to an option clause, consider limiting its operation in time so that future negotiations with other publishers are not overly compromised. For example, you might agree in advance to submit a proposal / synopsis of your next work to the publisher and give that publisher 8 weeks to consider your proposal and make an offer, failing which you are released from any further obligations.

Given today’s fiercely competitive publishing climate where most authors are not guaranteed future publishing deals, it makes little sense to limit your choices. The reality is that if you have a good working relationship with your publisher, you will naturally show them your next manuscript anyway, even if your contract doesn’t require it!

Non-compete clauses 

A non-compete clause is a clause that prevents you from publishing any future work which is substantially similar to, or competes with, your current work without your publisher's permission. 

Is such a restraint justified in your circumstances?  If you are an expert on Australian marsupials, you may write further books on the same subject matter as it is your field of expertise. If you are a crime writer, your next book may compete with your current book because it is actively marketed to the same readership. 

Therefore, unless this restriction is short-lived, it may restrain your ability to earn a living, particularly for genre fiction writers (where all your works arguably compete with each other) or specialist non-fiction writers (where you are an expert in your niche area and may want to publish multiple books on the same subject matter). 

If you accept a non-compete clause, the ASA’s recommendation is that it apply for a short time; perhaps 6 or 12 months from date of publication. 

The ASA considers it reasonable to include a non-compete clause or option clause where you are writing a series featuring the same characters as it is understandable the publisher will want to publish the whole series (and in your interests too). 

The ASA is particularly concerned when we see non-compete and option clauses in contributory or hybrid publishing agreements where you are paying for publication. Attempts to oblige you to continue to use a publishing service provider are not appropriate in our view because the hybrid publisher is not investing in your work. Your decision to use the hybrid publisher again should be based on commercial considerations, including your level of satisfaction with their services. 

If you have any questions about your publishing contract, literary agent agreement or distribution agreement you can use the ASA’s contract assessment service, which provides a full commercial and legal reading of your contract in partnership with Banki Haddock Fiora Lawyers. Find out more here.

Disclaimer: This information is general and introductory in nature. It is not intended to provide legal advice and should not be relied upon for such advice.  If you need legal advice for your particular circumstances, you should seek advice from a qualified lawyer.