This clause gives one party the first chance to buy or match an offer before you can sell to someone else. It matters because it delays your ability to close deals and gives the other party a veto over your choices. For example, if you own a building and grant a tenant a right of first refusal, you cannot sell to a buyer at $500,000 unless you first offer it to the tenant at that same price—and the tenant gets time to decide. This is common in real estate and business sales, and it can make your asset harder to sell because buyers know they might lose it.
If you must grant this right, set a strict deadline—no more than 5 business days—for the other party to respond, or the right expires. Also, define exactly what triggers it (only sales? leases too?) and make sure you can walk away if they don't match the offer quickly, so you don't lose real buyers while waiting. ---
Frequently Asked Questions
What does this clause mean in simple terms?
This clause gives one party the first chance to buy or match an offer before you can sell to someone else.
Why should I care about this clause?
It matters because it delays your ability to close deals and gives the other party a veto over your choices.
What are my options?
For example, if you own a building and grant a tenant a right of first refusal, you cannot sell to a buyer at $500,000 unless you first offer it to the tenant at that same price—and the tenant gets time to decide.
How does this affect small businesses?
This is common in real estate and business sales, and it can make your asset harder to sell because buyers know they might lose it.