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What is a right of first refusal?

What is a right of first refusal? | Sheryl Hunter | Hunter Business Law | We help your business | Request Consultation | 813-867-2640 | http://www.hunterbusinesslaw.com/ | [email protected] | 119 S Dakota Ave , Tampa, FL 33606 A right of first refusal is a right that someone has to have the first opportunity to potentially buy out another person's shares in a company so let me use that as an example. If there are two owners of a business and one owner wants to get out of the business, instead of them going out in the general marketplace and say "Hey, I'm selling my 30% of the company", they would have to get a right of first refusal to the existing other owners of the business to buy them out. They might have to first come to their co-owners and say "I want to sell my 30%, I'm offering it to you for $300,000, $30,000, whatever the amount that would be fair, you have the right of first refusal, you have 30 days to respond to me". Typically the contract between them which is either a shareholder agreement or an operating agreement or partner agreement will outline how that process works providing a right of first refusal. This can also come up in the context in other types of contracts where there's a right of first opportunity to buy out or get an assignment of a contract.