First Right of Refusal

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K. Victoria Chase

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So, I know some of us were discussing the First Right of Refusal clause on another pub's thread, but since I can't recall the thread, I'll mention it here if that's okay.

Here's an example from my contract:

If the author writes another Work that is a sequel to the Work covered in this agreement, using an identical theme and/or major characters from the contracted Work, Publisher retains a right of first refusal for the subsequent work. If Publisher does not accept for publication this additional Work within 90 days of submission, it will be considered refused and the Author will be free to market rights to the new work without encumbrance.

Now, the way I understand it is I DON'T have to accept a contract for my next work if they offer it.

Is it possible that the publisher understands this clause to mean that if they don't refuse my MS, the contract offer MUST be accepted by author?

*All characters and themes were created by me, and the major characters in the first book only have cameos in the subsequent works.*

Thanks for the help. I'm pretty sure I know the answer (I have to offer it to them but I don't have to accept the contract--if offered) but I don't want to make a mistake, you know? Second guessing...

Any thoughts?
 

victoriastrauss

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Is it possible that the publisher understands this clause to mean that if they don't refuse my MS, the contract offer MUST be accepted by author?
Yes.

Perhaps, if you ask, they'll tell you not to worry about it. They're fair people, and if you aren't comfortable with their offer you'll be able to say no. Problem is, the contract language does not provide for you to say no--and the author-publisher relationship is governed by the language of the contract.

If they want your next book, will they turn around and insist that you HAVE to accept their offer because the contract doesn't allow you to refuse? Perhaps not (though if your current book does really well for them, they have a strong incentive to hold onto you). But as an author, you have a big fat uncertainty hanging over any sequels or related books you decide to write.

I also think 90 days is too much time for the publisher to consider the option work; 30 or 60 days would be more reasonable.

If you can, I'd suggest amending this clause. Here's some suggested language, with my additions bolded (note: I'm not a lawyer. This comes from contracts I've signed myself, as well as from my general knowledge of publishing contracts).
If the author writes another Work that is a sequel to the Work covered in this agreement, using an identical theme and/or major characters from the contracted Work, Publisher retains a right of first refusal for the subsequent work. The Publisher shall have 60 days from submission of the subsequent Work to decide whether it wishes to publish the Work. If Publisher does not accept for publication this additional Work within 60 days of submission, it will be considered refused and the Author will be free to market rights to the new work without encumbrance. If Publisher does advise Author it wishes to publish the new work, but within 30 days of the offer the Author and Publisher have not agreed on terms for such publication, the Author will be free to market rights to the new work without encumbrance.
- Victoria
 

K. Victoria Chase

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Problem is, the contract language does not provide for you to say no--

That's what I was afraid of when reading the language--and if the contract doesn't tell me how I can say no(with regard to this clause), then I can't--and that's a bit crazy.

I appreciate the language you provided--it's more "author friendly."

Thank you, Victoria! :)
 

LindaJeanne

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What is the specific legal meaning of "Right of First Refusal" in the context of publishing?

In another context where I encountered the term (the company I worked for had been purchased by a major client, after months of negotiations with a competitor that wanted to buy it), I was told that it meant that if an agreement was made to sell the company, then the company had a contract with this major client that he had to offer the company to that client on the same terms as were reached with the other buyer.

Thus, I interpreted that clause in publishing to mean that you didn't have to accept their offer, but if another publisher made you an offer, then you had to give the publisher with the ROFR the chance to offer a contract on the same terms as the other offer, if they so desired.

Now,
  • This information did not come from a lawyer
  • I do not know the exact wording of the contract that invoke the discussion
  • This had absolutely nothing to do with the publishing industry

So, clearly, I don't know what I'm talking about :).

So, what is the ACTUAL legal meaning of the clause (at least in publishing)? Does it really meant that you have to accept any contract that they offer you? (What would stop them from offering a $1 advance and 1% royalties, if you had to accept their offer, since there's nothing about "the same terms as the previous contract"?)

Thanks for helping clarify my muddled brain :)
 

victoriastrauss

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The issue isn't the legal meaning of the term in and of itself--I'm not aware that it does have an established meaning in publishing law, though again, I'm not a lawyer--but the way the term is defined in the portion of the publishing contract in which the term appears.

The problem with the contract language quoted by the OP isn't that "first right of refusal" has some kind of automatic binding meaning, but that, because it isn't defined precisely enough, the publisher could argue whatever meaning it chose and still be within the bounds of the contract language. Likely the publisher doesn't intend "first right of refusal" to buckle the author into a straitjacket. But if it decided it wanted to hold onto an author who wanted to get away, it could easily say "Well, that clause doesn't give you the right to say no. So you can't say no."

It's all about closing loopholes--and that applies as much to publishers, who need to guard their interests through their contracts, as it does to authors, who need to protect their rights and their intellectual property.

- Victoria
 

WeaselFire

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Couple of issues here. First, and foremost, don't sign a contract that gives the publisher the right of first refusal on future work. Problem solved.

Beyond that, the right of first refusal does not force a contract. It merely gives the publisher the right to refuse the submission. If they do not refuse the submission, and you do not come to a contract agreement, they do not retain any rights.

Normally, in practice this is never an issue. If the first work sold well enough, they'll offer on the second work and come up with an offer that the author accepts. They will almost always make a better offer than any other publisher anyway.

If you have a legitimate reason not to want to use the same publisher, let them know. It's really doubtful anyone will ever sue for this, the right only guarantees damages and there rarely are any damages.

There are always exceptions, and there are always lawyers. Use them and you'll feel better.

Jeff
 

Jamesaritchie

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My contract says much the same, BUT I have the right to look for a better offer before signing. If I get a better offer, publisher number one then has the right to match it. If they do, I have to go with them. If they don't, I can go with the publisher who offered more.

I think this approach is fair to me, and to the publisher.
 

Jamesaritchie

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Couple of issues here. First, and foremost, don't sign a contract that gives the publisher the right of first refusal on future work. Problem solved.




Jeff

I'm not completely disagreeing, but my experience is that top publishers are going to demand some version of this wording, so it's more a matter of how it's worded than just refusing to sign.

Refusing to sign a contract that has any version of this is likely to mean you won't be signing a contract with any good publisher.
 

Al Stevens

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A similar clause was in every contract sent to me by publishers. I always X'd it out, and they always accepted and initialed that modification.
 

victoriastrauss

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Beyond that, the right of first refusal does not force a contract. It merely gives the publisher the right to refuse the submission. If they do not refuse the submission, and you do not come to a contract agreement, they do not retain any rights.
This makes complete sense. The problem is--if we're talking about a small press here--that small presses often don't understand their own contract language, and are often as unclear as their authors on what it does and doesn't mean. And, sometimes, they are willing to use contract language, or loopholes in contract language, to make unreasonable or author-unfriendly claims. The situation I described in my second post--the publisher telling the author that since the contract language didn't allow her to refuse an offer for her book, she was legally obliged to accept it--is not hypothetical; it's an actual complaint I received.

The small press world in many ways is not like the large press world. One reason is the enormous number of inexperienced publishers that crowd the small press world. Obviously _any_ contract can be abusive, as can any publisher--heaven knows there are enough horror stories floating around about big publishers. But small press authors really need to be extra careful, because they have to protect themselves not just in the ways that all authors have to protect themselves, but against their publisher's possible lack of knowledge and experience.

Sorry to be blunt, but that's how I see it, on the basis of the thousands of questions and complaints I've received about small publishers over the years.

- Victoria
 

Chris P

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So how much can the second book be based on the first, or how major does a character that appears in both books have to be, before this clause becomes active? It seems to me it would be in the eye of the beholder. I have specific reasons for asking (duh, or I wouldn't be asking).
 

Michael Davis

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I re-read my first right of refusal cause and appears to me you cannot go elsewhere unless they aren't interested or don't get back to you within a specified time. No way I can interpret the clause to ignore their offer of a contract nor would I want to given they supported me on part one.
 

K. Victoria Chase

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So how much can the second book be based on the first, or how major does a character that appears in both books have to be, before this clause becomes active? It seems to me it would be in the eye of the beholder. I have specific reasons for asking (duh, or I wouldn't be asking).

I have no idea. I write romantic suspense with law enforcement characters. The hero and heroine fall in love. The plots are always different and the hero/heroine from the first book have cameos in subsequent books and the hero/heroines of those sequels show up in the previous book to give the reader a taste of who is coming next in the series. I guess the only things that are the same are hero/heroine character names and the series name.

I suppose it would be different if I was writing an trilogy that was broken up into three books...
 

Mac H.

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No way I can interpret the clause to ignore their offer of a contract nor would I want to given they supported me on part one.
I'd check with a lawyer, but if you don't have the option to ignore (or refuse) their offer of a contract then you aren't talking about a 'first right of refusal' you are talking about a 'we automatically own everything else at terms that we will make up on a later date'.

Under your interpretation they could simply have an auto-reply setup to automatically offer a 0.01 cent contract (payable in 2080) and you'd be obliged to accept it.

Obviously that is nonsense (Reductio ad absurdum) - but it shows that you always have the option to ignore or refuse an 'offer' - that is what makes it an 'offer' rather than a 'command'.

IANAL - but unless the contract specifically says that you have to accept the offer than it is just an offer which, by definition, you are free to reject.

Good luck,

Mac
 

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If I were going to ask a lawyer to check my publishing contracts I'd make sure it was a lawyer who knew how publishing works. Many don't; and many don't understand how some publishers take advantage of loopholes in the way Victoria has described.

The bottom line here is that you want your contract to explain in good detail how everything is going to work between you and your publisher. You shouldn't sign anything with ambiguous clauses: get them clarified before signing.
 

Pterofan

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So how much can the second book be based on the first, or how major does a character that appears in both books have to be, before this clause becomes active? It seems to me it would be in the eye of the beholder. I have specific reasons for asking (duh, or I wouldn't be asking).

I'm in the same boat right now. I wrote two related books for an erotica publisher (M/M and M/M/F) and just finished a YA in the same basic universe (I got wondering what the threesome's kids would be like).

The new book is a whole different genre and aimed at a different audience. None of the major characters from the first two appear in the YA; when they're mentioned they're referred to as "Mom" and "Dad," never by name. The only sex scene is three sentences long and happens off-camera. There's no way the original publisher would publish this. Yet technically it's a sequel (spinoff?). Can I go ahead and send this to YA markets, or do I need to give the first publisher a head's-up just to be on the safe side?
 

dangerousbill

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Here's an example from my contract:

If the author writes another Work that is a sequel to the Work covered in this agreement, using an identical theme and/or major characters from the contracted Work, Publisher retains a right of first refusal for the subsequent work. If Publisher does not accept for publication this additional Work within 90 days of submission, it will be considered refused and the Author will be free to market rights to the new work without encumbrance.

Now, the way I understand it is I DON'T have to accept a contract for my next work if they offer it.

That latter part is usually spelled out in contracts I've seen, to stipulate 'same or similar terms to this agreement'. Otherwise, it's murky.

When contracts are ambiguous, the resolution is generally against the party who drew up the contract. But that still means courts and lawyers and more expense than it's worth. Make sure the terms of a new contract are included in the present contract.
 

Pterofan

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I contacted my publisher and explained the situation. Because it's intended for a different audience (one they're not aiming for) they said there's no conflict and I could go ahead and sub it to YA markets. Had it been an erotic romance I wanted to shop elsewhere there might have been a problem, but a change in genre and readership makes everything okay.
 

Pterofan

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Not all of it, just any book that features characters or specific settings (say, the Longhorn BDSM Ranch) as a book of mine they've already published. That was my question: the YA was related to the other two books but wasn't in a genre they publish. Do they still have the right of first refusal? I needed to be absolutely sure before I started marketing.

Can I write a new erotica novel and send it elsewhere? Sure, not a problem. I also have an idea for a steamy M/F involving a minor character from the second book. That one would be a direct sequel and the right of first refusal would kick in.
 

Pterofan

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Actually, I'm in favor of that paragraph in the contract. It makes sense for related books in the same genre and intended for the same audience to come out from the same publisher. It makes it easier for readers who like one book to find the rest of them. My problem stemmed from the genre jump. Damn you, sequelitis!

I do think a 90-day wait is too long, though. 60 is good enough.
 

Midian

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Here's an example from my contract:

If the author writes another Work that is a sequel to the Work covered in this agreement, using an identical theme and/or major characters from the contracted Work, Publisher retains a right of first refusal for the subsequent work. If Publisher does not accept for publication this additional Work within 90 days of submission, it will be considered refused and the Author will be free to market rights to the new work without encumbrance.

Now, the way I understand it is I DON'T have to accept a contract for my next work if they offer it.

No. You do have to negotiate a contract if it hasn't been negotiated already in the current contract.

Is it possible that the publisher understands this clause to mean that if they don't refuse my MS, the contract offer MUST be accepted by author?

Depends on the contract. Some contract options are prenegotiated. Some aren't. What it DOES mean: you must negotiate. How long and how hard is up to you, your attorney, and your constitution. Sometimes you get what you want. Sometimes you don't. Depends on the company, the clout of the moneymaker author, how much the company wants it, how good the author's attorney is, etc.

*All characters and themes were created by me, and the major characters in the first book only have cameos in the subsequent works.*

You're best bet with any contract, especially if you don't hire an attorney, is to limit, limit, limit. Limit options to either the series, a number of books, a time frame, etc. Limit anything and everything you can that they'll agree to.

If they insist upon something, figure out how to limit it or grant something in your favor with it. For instance, if they ask for rights in perpetuity (which you should never give, btw, I'm only using this as an example), then make sure you limit those rights with exacting precision. You don't want to lose rights to write about your own characters. So you say they can have rights to 3 books in the series in perpetuity but not rights to future work in the series and those rights do not exclude you from creating separate work in the same world.

Every paragraph of your agreement should be looked at with an eye toward how you can limit those rights.

Thanks for the help. I'm pretty sure I know the answer (I have to offer it to them but I don't have to accept the contract--if offered) but I don't want to make a mistake, you know? Second guessing...

Any thoughts?

Actually, yes you do. How well that works out depends on your contract negotiation skills.

What your agreement says, in English:

Book One: Current contract.

Future Book Two: If it is a sequel to Book One and has the same major characters with the same theme, they must be offered the book's first look. If they accept the option, you must enter negotiations with them.

You may NOT show the work to any other publisher. If there is no other clause stating the time limits, it would appear that this is in perpetuity as you have no expiration date of the option clause or a limitation of how many options they can invoke. If you write 50 books in this series, they have options to all of them. If they refuse after 90 days, you may then shop the book around. But every subsequent book, they still have first rights to. Typically, if they refuse a book, they dont want the series anymore so you can ask for an agreement terminating their future options.

Good news, they did limit themselves to this series. So if you want out of the agreement, just stop writing the series.

If your publisher doesn't understand what the term means, that's in your favor, not theirs. They can't enforce something based on what they "thought" they meant. Especially not when using standard industry terms.

NOTE: I am NOT an attorney. My experience with legaleze stems from working as a legal assistant at major labels in the music industry. Options are something I'm familiar with but definitely understand that I am NOT an attorney, and it's not at all legal advice, or founded on any kind of formal training outside of working with music industry agreements and options. I've forgotten more than I remember sooooo there ya have it.
 
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WeaselFire

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I just went back and looked at the clauses I've refused and some in other contracts. Interesting to see what's in boilerplate:

Mine specifically said the "author's next work or proposal." So a one-time clause, for only the next work, regardless of whether they even publish that type of material. I have never had an issue removing these clauses.

Another author's specifically stated "future books in the series." This wasn't boilerplate as much as specific to the author's romance series, but it included any work that might be in the same series of books. She could care less, the publisher is great and takes everything she (her agent actually...) sends them. But she does write a SF series for a different publisher.

One particularly onerous clause I saw in a boilerplate contract specified all future work. Period. Everything you ever do forever and ever.

Lesson: Don't just sign a contract. Read it. Negotiate it. Have your agent/attorney go over it. One major advantage to being agented. :)

Jeff
 
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