Right of First Refusal
/ˌraɪt əv fɜːrst rɪˈfjuːzəl/
Definitions
- (n.) A contractual right giving a party the option to enter into a transaction before the offer is made available to third parties.
The tenant had a right of first refusal to buy the property before the landlord sold it to someone else.
- (n.) A preemptive right to match any third-party offer to purchase or lease an asset, thereby preventing unwanted transfers.
Under the shareholder agreement, the company holds a right of first refusal on any shares offered for sale.
Related terms
Commentary
Often included in contracts to preserve negotiating advantage; precise triggering events should be clearly defined to avoid disputes.
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.