What do "right of first refusal" clauses allow a party to do?

The "right of first refusal" clause is a provision in a contract that grants a party the opportunity to purchase a property before the owner can sell it to someone else. This means that if the property owner receives an offer from another potential buyer, the party holding the right of first refusal has the priority to either accept or decline that offer before the owner can finalize any sale with another party.

This clause is particularly beneficial to the holder, as it ensures they have the chance to acquire the property under the same conditions offered by the third party. It does not compel the owner to sell at a predetermined price, cancel the sale, or negotiate all terms of the property sale, as those options are outside the scope of what the right of first refusal entails. Instead, it simply gives the holder the first opportunity to purchase should the owner decide to sell, making it a valuable strategy in real estate transactions.