When one is an aspiring novelist, hitting the workshops, the con circuit, querying agents, dropping books into editorial slush piles, one tends to view the New York book contract as the end game. That's the primary goal and (often) the singular focus for years of effort and emotional investment. Consider this an analog to working toward a college degree.
The thing is, making that big score is only the very beginning of a lengthy and complex process that hopefully lasts the rest of one's life. It's not the end game, it's the first rung of an entirely new set of ladders. Being a professional novelist carries its own set of efforts, hope, fears, many of which sound ridiculous to someone yearning for their first big break, but which are just as serious and potentially overwhelming as any other set of issues. Consider this an analog to graduating and entering your professional field.
The significance of this observation is that there might be situations where a certain book offer isn't in your best interests. If you're working with an agent who's difficult and unresponsive — a mismatched work style or personality clash — and they bring in an offer just as you're parting company, for example. For someone who's spent years, possibly decades, aiming for that offer, the thought of declining it is pure agony. That's the aspiring novelist's view of that first contract.
But going to market with the wrong people on your team can result in years of headaches. Whatever was wrong before you sold will only get worse when real money, and publication schedules, are on the line. The long-term effects on your sanity and career path could be profound. That's the working novelist's view of a bad contract.
There are bad book contracts out there, especially with predatory independent presses. There are bad-fit agents out there, and even a few outright scammers. It can happen. Luckily, very few people have to deal with an issue of this sort. I haven't — I'm extremely pleased with my relationships with arcaedia, casacorona and my publishers. But it's an interesting thought-experiment for you people hunting that first big book deal.
Is there a circumstance under which you would decline an offer?
ETA: arcaedia addresses this question from an agent's perspective.