A right of first offer gives a holder the first chance to negotiate or make an offer before an owner sells an interest to others.
It is a preemptive transfer right used in business and property agreements.
Why a right of first offer matters
Ownership transfers can change control, economics, and business relationships. A right of first offer gives existing owners or the company an early opportunity before an outside sale.
The provision should define notice, timing, offer procedure, and what happens if no deal is reached.
Where a right of first offer appears
Rights of first offer appear in shareholder agreements, operating agreements, buy-sell agreements, joint ventures, real estate contracts, and investment documents.
They are common in closely held companies where owners care who joins the ownership group.
How it differs from nearby terms
A right of first offer usually comes before the seller has a third-party offer. A right of first refusal usually lets the holder match an outside offer.
Tag-along rights concern joining a sale, not buying before a sale.
Practical example
An LLC member wants to sell an ownership interest. The operating agreement requires the member to first offer the interest to the company and other members.
Related Terms
Quick check
Question: Does a right of first offer usually give an early chance to buy or negotiate?
Answer: Yes. It gives the holder the first opportunity before broader marketing or transfer.