Right of First Refusal
Mike Irvin
Many times a
right of first refusal (ROFR)
will be used in farm contracts.
It is a provision in an
agreement stating that a
specified party must be given an
opportunity – before any others
– to either accept or reject an
offer to sell.
In this
case, if and when the owner
decides to sell, the property
must first be offered to the
specified party. Upon refusal by
the specified party, the
property may then be offered
under the same terms and
conditions to others.
An ROFR
can cover almost any sort of
asset, including real estate,
personal property or interest in
a business.
Because an
ROFR is a contract right, the
holder’s remedies for breach are
typically limited to recovery of
damages. In other words, if the
owner sells the asset to a third
party without offering the
holder the opportunity to
purchase it first, the holder
can then sue the owner for
damages.
Because of
the complexities involved, it is
suggested a ROFR should be drawn
up by an attorney and that such
an offer should not be accepted
without a legal review.
For more
information, contact Kansas Farm
Bureau’s Legal Foundation at
(785) 587-6621.
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