How To Use
Having a first right of refusal on property, business, or any other object is often of great value to the holder.
This Agreement can be appended to other agreements or signed contemporaneously with them at the same closing.
- Be sure you have multiple copies, one for each signatory. Keep one in your active file, another in the file that relates to the subject, and another in the minute book.
- In negotiations, you should be able to exact a higher price for any transaction that involves a Right of First Refusal. While often it is desired defensively by the acquirer, it ties your hands and potentially can disrupt the sale of the goods or property in question. You should charge accordingly. And, if they don’t want to pay, you should suggest, “Then that is what it is worth to you.”
This provides the justification for not giving it. Interestingly, people often haggle over items the most that they are willing to pay the least for (e.g., small items at an estate sale of their family in which they are heirs; if forced to give up money from their share, they often will not give up $10; otherwise, they might forever about it. Keep this interesting human tendency in mind when negotiating this kind of clause—if they won’t pay, don’t give in on it. See more about this subject in our Negotiations Handbook CD and videos.
Right of First Refusal
This Right of Firsts Refusal to Purchase Agreement (“Agreement”) is made on ______________, by and between ______________________________ (Name), Grantor of the Right of First Refusal (“Owner”) and ______________________________ (Name), Receiver of Right of First Refusal (“Grantee”). In consideration of the payment by the Grantee to the Owner of the sum $_________ and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows: