A little while back I made this post: How to decide if you should option your screenplay to a producer
A got a few people asking me to define what a screenplay option is.
An option (as it relates to screenwriting) is when a screenwriter gives a producer the right to purchase the writer’s script according to the terms laid out in the option agreement.
I won’t get into all the specifics of an option agreement in this post but will highlight a few items. Option agreements are almost always exclusive, meaning the writer promises not to shop the script around to other producers while the option is in place. The producer typically pays the screenwriter for the option, although in many cases it can be as little as $1. The option agreement will usually last at least one year and in most cases two years, and in some cases allow the producer to renew the option period. The amount of money that a screenwriter will earn and how a screenwriter will be paid when the producer buys the script will be laid out clearly in this agreement.
The reason for signing an option agreement is simple: it allows the producer to go out and try and raise money to shoot your script knowing that they have the legal right to buy your script at a predetermined amount.
I’ve written many posts about screenplay options. Click here to view them: screenplay options.
As with all legal matters, please consult with an entertainment attorney if you have any questions about option contracts. This post is merely presented as an overview of what you might be presented with if a producer wants to option a screenplay from you but it in no way should it be used to help you understand your specific option agreement. Option contracts can be quite complicated and you should definitely seek the advice of a lawyer before signing any legal document, especially one as complicated and important as a screenplay option contract.
I have a related question: What do you do when various producers hold a screenplay and one wants to option it? Do I tell all the others about the option?
Once a script is optioned I’ve never bothered to contact the other companies who I sent the script to, and I’ve never run into any problems with this either. In a few cases I have optioned a script and then had another producer call me and tell me they were interested in the script, too. I just told them that I had already optioned it and took down all their contact information so I could contact them when and if the first option ends.