right of first refusal

(redirected from First Refusal Rights)

Right of first refusal

The right of a person or company to purchase some thing before the offering is made to others.

Right of First Refusal

The right of a person or organization to take advantage of a transaction before it is open to other parties. For example, a seller and potential buyer of a house may agree that the buyer has right of first refusal. Then, if the seller receives a better offer from another potential buyer, she must take the offer to the first buyer and, if that buyer accepts, sell to him rather than the second buyer. One party may pay for the right of first refusal, and it may be built into a contract. See also: Earnest money.

first refusal, right of

The right to buy or rent real property if and when the owner decides to sell or lease.The owner is under no obligation to ever sell or lease,though.Contrast this with an option, in which the the person who wants to buy or lease (optionee) has a legal right to require the owner (optionor) to sell or lease,but the optionee does not have any obligation to buy or lease.With a right of first refusal,control is in the owner.With an option,control is in the other person.

Care should be taken when drafting a right of first refusal.The parties should specify an expiration date, a price or method of calculating the price, and what happens if the purchaser-lessee declines to buy or lease at a particular point: Does the right of first refusal end, or does it continue to the next time?

The parties should give particular thought and attention to describing the triggering event.What gives rise to the ability to exercise the right of first refusal? Is it the owner merely soliciting offers, or must there be a bona fide offer from a third party before the party will be notified and given the first opportunity to buy or lease? What if the owner dies? Does the party have a right to buy the property before it passes to the heirs?

right of first refusal

The right to match a third-party's offer and purchase property if it is offered for sale. The owner has no obligation to sell to anyone, however. The term “right of first refusal” is often used interchangeably with option,but an owner who grants an option is obligated to sell if the recipient of the option chooses to exercise it. Contrast right of first offer.

References in periodicals archive ?
New LPs in Fund II will have the opportunity to invest at favorable terms including first refusal rights, with Fund II investors having the opportunity to participate in some of the Fund I follow on investments, and have the opportunity to co-invest on the same or very close to initial terms.
Consortium Obtains First Refusal Rights Contract from Government of Myanmar for Rehabilitation and Improvement and 30-year Operation of Airport
The operation is subject to the remaining pipeline consortium partners not exercising their first refusal rights and certain consents being granted.
BA already owns ten per cent of Iberia and has first refusal rights over an additional 32 per cent.
8m and also includes first refusal rights under an agreement with TGP Partners, L.
Then, X, Y and Z might respond: "Well, OK, but only if you throw in first refusal rights on the next graduating class from all three colleges.
Retained rental and first refusal rights were ruled acceptable for QPRTs.
We are excited to expand our endeavors to the diagnostics field, investment into Biosystems International and the purchase of first refusal rights for the distribution of BSI's cancer diagnostics on our market is one of the first moves to achieve our long term goal" added the Business Development Director of the Pharmaceutical company.
Among other things, the lawsuit seeks damages arising out of VMS's failure to pay CMT in violation of its revenue-sharing obligations under their agreement and for VMS's blatant disregard of CMT's first refusal rights.
has agreed to offer the Company first refusal rights and legal exclusive rights for 51% or more of Beijing Boran Pharmaceutical Co.
Each of Blue Square and the existing shareholders would agree to grant first refusal rights and tag along rights in connection with any proposed transfer of Eden shares in the future.
Ltd has agreed to offer the Company with first refusal rights and legal exclusive rights for the acquisition of 51% or more of Henan Furen Huaiqingtang Pharmaceuticals Co.