Preferential Right
/ˌprɛf.ərˈɛn.ʃəl raɪt/
Definitions
- (n.) A right granted to a party to have priority over others in a legal claim, benefit, or transaction, often seen in corporate or property contexts.
The shareholder exercised his preferential right to purchase new shares before others.
- (n.) A right accorded to creditors to receive preferential payment over others in insolvency or bankruptcy proceedings.
Secured creditors hold preferential rights to the debtor's assets in bankruptcy.
Forms
- preferential rights
Related terms
See also
Commentary
Preferential rights often depend on contractual or statutory provisions; drafters should specify the scope and hierarchy relative to other rights to avoid ambiguity.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.