What does 'first refusal' or 'option' mean?

What does 'first refusal' or 'option' mean?

Jonny Geller (Managing Director - Curtis Brown (Books)) gives expert video advice on: How do advances and royalties work?; Should I accept an offer of a 'flat fee'? and more...

First refusal is not a term for the word option. That just means that a publisher has the right to look at your next work. If they have invested X amount of money in you, they feel that, however good a job they do, they shouldn't have to compete with the market. They should compete just by offering a decent amount of money. So many authors are asked to sign an option agreement. It's not something we recommend.