Right of First Offer (ROFO) Definition and How It Works …

A right of first offer (ROFO) is a contractual obligation that allows the holder to purchase an assetbefore the owner tries to sell it to someone else. If the right holder is no longer interested in the propert… See more

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FAQs about Right of First Offer (ROFO) Definition and How It Works … Coupon?

What is the right of first offer?

The right of first offer is a similar contractual right that instead gives the holder the right to make an offer to buy when the owner of the asset decides to sell it. However, the owner is not obligated to sell to the holder of the ROFO if they do not like the offer. ...

What is a 'right of first offer' & 'ROFR' in commercial real estate?

In the world of commercial real estate, drafting and negotiating leases and agreements can be complex. Two critical clauses that often come into play are the "right of first offer" (ROFO) and the "right of first refusal" (ROFR). These clauses are beneficial for both property owners and tenants, providing strategic advantages and protections. ...

What is the difference between a right of first offer and ROFR?

A critical distinction exists between the Right of First Offer (ROFO) and the Right of First Refusal (ROFR), two contractual clauses that are often misunderstood or used interchangeably, despite their distinct purposes and implications. While both clauses are used in contract negotiation, they serve different purposes in business strategy. ...

What is the difference between a right of first offer and first refusal?

A right of first offer is said to favor the seller, while a right of first refusal favors the buyer. A right of first offer is usually written into a contract such as a lease agreement or business partnership. It is triggered when the owner wants to sell the asset or real property. ...

What is a right of First Offer (ROFO)?

A Right of First Offer (ROFO) is a contractual provision that grants the right-holder the first opportunity to make the first offer to purchase an asset. If the right-holder chooses not to proceed, the owner may approach third parties with offers at terms more favorable than those presented to the right-holder. ...

What is included in a right of first offer agreement?

There are many variations that can be included in a right of first offer agreement, such as transferability and limits. For that reason, having legal counsel to help you in negotiating those terms is crucial. This is especially true if getting the property is essential to your future business plans. ...