right of first refusal

(redirected from First Refusal Right)

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 ?
The transaction completion is subject to applicable regulatory approvals and the waiver of the first refusal right by the other shareholder.
Under the Bellzone s financial support deal with the CIF, it has the first refusal right to acquire the production of the Kalia mine project at the prevailing prices of the market, whilst CIF is bound to offer business linked monetary support for developing the mine to Bellzone.
OMPA uses first refusal right, will split TCC share with Brownsville Public Utilities Board
Wescor has also been granted an option to purchase all of the remaining MicroCor stock, owned by InMedica and Chi Lin, upon successful completion of phase (2), and again upon the successful completion of phase (3), above, as well as a first refusal right in the event of a bona fide outside offer to acquire MicroCor.
75 million shares of VTA common stock it acquired from Torchmark Corporation through the exercise of its first refusal right.
Although it forces the prospective vendor to be disciplined when establishing the initial price and terms offered to the shareholder holding the first refusal right, in the event the offer is not accepted, the vendor is able to deal with third party purchasers unencumbered by a first refusal right.
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.
An extensive hospital and drugstore distribution channel within China - The agreement also gives China Health exclusive first refusal rights of acquisition up to the date that the transaction becomes final.
Mean Green is party to a strategic alliance with Veridium pursuant to which Mean Green has the ongoing exclusive right of first refusal rights to purchase Veridium's various biodiesel feedstocks including the high grade corn oil that Veridium extracts from an ethanol by-product called distillers dried grain ("DDG") with Veridium's patent-pending Corn Oil Extraction System(TM).