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What is Right of First Refusal?

Risk: Low to medium. Useful for growing tenants; mostly harmless when narrowly drafted.

What it is

The tenant's right to match a third-party offer to lease additional space in the building. Distinct from purchase ROFR.

Why it matters in your deal

For commercial tenants and ETA buyers inheriting site obligations, the effect of right of first refusal (lease) depends on the signed wording, related sections, governing law, and transaction facts. The record labels the review priority as: Low to medium. Useful for growing tenants; mostly harmless when narrowly drafted.

What to do

  1. 1Locate the operative right of first refusal (lease) wording, its definitions, and its document cross-references.
  2. 2Record the parties, triggers, exceptions, deadlines, and consequences stated for right of first refusal (lease), then verify any legal conclusion for the governing jurisdiction.

Primary sources and reference starting points

  1. Cornell Legal Information Institute - lease
  2. Cornell Legal Information Institute - contract
Clause guide

Go from definition to the real contract behavior

This term is easier to understand when you see how it behaves inside a live agreement. These clause guides show what makes the language risky, what Inkvex checks, and what to push on before you sign.

Medium attention→
Right of First Refusal Clause
Who gets the first shot at a future deal, and how this clause can limit your flexibility in a sale, partnership, or financing scenario.
Common in: Partnership and shareholder agreements, Real estate deals
High attention→
Closing Conditions
How an acquisition buyer converts financing, consents, diligence, bring-down, and deliverables into an objective close or do-not-close checklist.
Common in: Asset purchase agreements, Stock purchase agreements
High attention→
Customer Concentration Clause
How customer concentration allocates risk, which wording controls, and what to verify in the signed agreement.
Common in: Asset purchase agreements, Stock and membership-interest purchase agreements
High attention→
Earnout Clause
How earnout allocates risk, which wording controls, and what to verify in the signed agreement.
Common in: Asset purchase agreements, Stock purchase agreements
High attention→
Escrow Holdback
How escrow holdback allocates risk, which wording controls, and what to verify in the signed agreement.
Common in: Asset purchase agreements, Stock purchase agreements

Related Articles

California SB 1103 Commercial Lease ChecklistRead more →

Related terms

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How Inkvex catches this

Inkvex can surface text relevant to right of first refusal (lease) and organize it with the surrounding document for review. Confirm the output against the source document and take transaction-specific legal questions to qualified counsel.

Frequently asked questions

What is Right of First Refusal?

The tenant's right to match a third-party offer to lease additional space in the building. Distinct from purchase ROFR.

Why does right of first refusal matter in your deal?

For commercial tenants and ETA buyers inheriting site obligations, the effect of right of first refusal (lease) depends on the signed wording, related sections, governing law, and transaction facts. The record labels the review priority as: Low to medium. Useful for growing tenants; mostly harmless when narrowly drafted.

How does Inkvex analyze right of first refusal?

Inkvex can surface text relevant to right of first refusal (lease) and organize it with the surrounding document for review. Confirm the output against the source document and take transaction-specific legal questions to qualified counsel.

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