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Right of First Refusal (ROFR) - A contractual or legal privilege that grants a party the first opportunity to purchase or accept a property or right before it is offered to others. It typically requires the owner to offer the property on specified terms, allowing the holder to accept or decline before any third-party sale ["
TOKIO MARINE LIFE INSURANCE MALAYSIA BERHAD vs RHB BANK BHD - High Court
"], [](https://supremetoday.ai/doc/judgement/MY_MLRH_2015_6_MLRH_66).Main Points and Insights:
TOKIO MARINE LIFE INSURANCE MALAYSIA BERHAD vs RHB BANK BHD - High Court
"].PNG SIAW LUAN vs WONG TUI SAN & ORS - High Court
"].Courts have clarified that ROFR is a privilege, not an enforceable obligation to buy, and its validity depends on proper notification and adherence to contractual terms [](https://supremetoday.ai/doc/judgement/MY_MLRH_2015_6_MLRH_66), ["
TOKIO MARINE LIFE INSURANCE MALAYSIA BERHAD vs RHB BANK BHD - High Court
"].Analysis and Conclusion:
TOKIO MARINE LIFE INSURANCE MALAYSIA BERHAD vs RHB BANK BHD - High Court
"].PNG SIAW LUAN vs WONG TUI SAN & ORS - High Court
"], ["2025 Supreme(Online)(Kar) 31270"].TOKIO MARINE LIFE INSURANCE MALAYSIA BERHAD vs RHB BANK BHD - High Court
"], ["2024 Supreme(Online)(Kar) 38659"].References:- ["
TOKIO MARINE LIFE INSURANCE MALAYSIA BERHAD vs RHB BANK BHD - High Court
"]- ["EBERT SILVA OMNIBUS CO. LTD. v. HIGH LEVEL ROAD BUS CO. LTD ET AL .
"]- [](https://supremetoday.ai/doc/judgement/MY_MLRH_2015_6_MLRH_66)- ["2024 Supreme(Online)(Kar) 38659"]- ["2025 Supreme(Online)(Kar) 31270"]- ["PNG SIAW LUAN vs WONG TUI SAN & ORS - High Court
"]
In the world of contracts, business deals, and property transactions, certain clauses can give one party a significant edge. Imagine you're eyeing a prime piece of real estate or a stake in a promising company, only to learn another buyer is in the picture. What if you had the chance to step in and match their offer? That's where the () comes into play. But what exactly is a , and how does it work in practice?
This blog post breaks down the essentials of , drawing from legal principles and court cases. Whether you're a business owner, investor, or property holder, understanding this contractual tool can protect your interests—or help you navigate obligations.
The is fundamentally a that grants a party—known as the holder—the opportunity to match any third-party offer to purchase or acquire a specified asset or property before the owner can sell to others. It ensures the holder has priority to buy under the same terms offered by the third party, subject to the agreement's conditions.
In simple terms, it's not an automatic purchase right but a . The holder must actively exercise it by matching a third-party bid. Courts emphasize that this right remains in force until properly exercised, requiring a meaningful opportunity to match offers.
is common in:- Property leases (e.g., tenants matching sale offers)- Shareholder agreements (preventing unwanted new owners)- Business contracts (like bancassurance or port projects)- Tenders and licenses (e.g., shipping or advertising rights)
To grasp how operates, consider these core components:- Trigger: A genuine third-party offer with clear terms.- Notification: The owner must inform the holder promptly.- Matching Period: A set time (e.g., 60 days) to decide and match.
- Exercise: Holder matches price and terms in good faith.
Failure in any step can invalidate the process. For instance, the court in a bancassurance dispute stressed: the right remains in full force and that the party holding it must be given a meaningful opportunity to match any third-party offers.
Exercising isn't automatic—it demands good faith, full disclosure, and fairness:- Good Faith: Honest intent; no manipulation of terms. A requires good faith in presenting the terms for the grantee to match, and that failure to do so invalidates the exercise.
- Full Disclosure: All offer details must be shared for an informed decision.- Offer: The third-party bid must be legitimate, not contrived.
In property contexts, landlords must notify tenants and provide at least 60 days to match.
The typical process unfolds as follows:1. Owner receives a third-party offer.2. Notifies holder with full terms (price, conditions).3. Holder has a defined window (e.g., 60 days) to match.
4. If matched, holder buys; if not, owner proceeds with third party.
Courts invalidate shortcuts. The in key cases: is not merely a right to be informed but a right to be given a fair and genuine chance to purchase on the same terms.
Indian and international cases illustrate 's application:- In a bancassurance agreement, the court upheld 's validity, stressing procedural fairness.
- Property sales: Tenants get 60-day notice; failure to disclose invalidates sales.
From other precedents:- In a land allotment dispute, petitioners failed to disclose exercise in bids, leading to dismissal under . 2023 0 Supreme(Bom) 290- Share transfers: SPA clauses require written offers first to co-parties; breaches void transfers. Neither party shall sell any shares... without first offering the Shares to the other party. 2010 0 Supreme(Bom) 1233- Tenders: DGS Circulars grant to Indian vessel owners without limits; tenders ignoring this were quashed. 2021 0 Supreme(Del) 725- analogy: resembles under Muhammadan law—a weak right needing prompt declaration. 2016 0 Supreme(Kar) 97
In arbitration disputes, courts refer breaches to arbitration if clauses apply, staying suits. 2014 0 Supreme(Cal) 754
isn't ironclad:- Contractual Limits: Time frames (e.g., 3 months for term sheets) or specific scopes. 2014 0 Supreme(Cal) 754- Bad Faith: Withholding info or contrived offers voids it.
- Lapse: Unexercised or withdrawn bids forfeit rights. 2018 0 Supreme(All) 1472- No Statutory Force: Guidelines like circulars bind administratively but not always statutorily. 2021 0 Supreme(Del) 725
In partition cases, preemptors must quote prices promptly or forfeit. 2016 0 Supreme(Kar) 97
These show 's versatility but enforcement's reliance on contract terms.
To leverage or honor effectively:- Holders: Demand notifications; respond promptly with matches.- Owners: Disclose fully, act in good faith; draft clear clauses on timelines and processes.- Drafters: Specify notice periods, matching rules, and dispute resolution (e.g., arbitration).
Consult professionals for tailored agreements.
Disclaimer: This is general information based on legal documents and cases. Laws vary by jurisdiction; it is not legal advice. Consult a qualified attorney for your situation.
References: Cited documents include
,
, 2025 Supreme(Online)(KAR) 989, 2023 0 Supreme(Bom) 290,
,
, 1957 0 Supreme(Raj) 277, 2021 0 Supreme(Del) 725, 2018 0 Supreme(All) 1472, 2016 0 Supreme(Kar) 97, 2014 0 Supreme(Cal) 754, 2010 0 Supreme(Bom) 1233. #RightOfFirstRefusal, #ROFR, #ContractLaw
of first refusal. ... of first refusal. ... its participation in Phase 2 was expressly without prejudice to its right of first refusal rights. ... Their supply agreement contained a right of first refusal clause providing that if AstraZeneca decided to switch from DIP to propofol, it would give Albemarle "the first opportunity and right of first refusa....
" The first question debated is whether the ground of refusal was that the local authority had not recommended the application for the reason that the route was neither suitable nor safe for other users of the route, as contended for by the appellant, or whether the refusal by the Commissioner ... If the Commissioner fails to notice the applicant and thereby deprives the applicant of his right to urge such matters as he may deem necessary to place before the Commissioner in support of his application, there is cle....
of first refusal. ... of first refusal. ... of first refusal. ... of first refusal. ... of first refusal (at [53]).
The clause which relates to award of right of first refusal is in the following terms: “13. ... MAzÀÄ ªÉÃ¼É ºÁ° EgÀĪÀ ªÁtÂdå ¸ÀAQÃtðzÀ ¨ÁrUÉzÁgÀgÀÄ Right of First Refusal £ÀÄß DAiÉÄÌ ªÀiÁrPÉÆAqÀ°è ¸ÀAzÀ¨sÀð-03gÀ£ÀéAiÀÄ ¸ÁªÀðd¤PÀ §»gÀAUÀ ºÀgÁdÄ ªÀÄÆ®PÀ «¯ÉêÁj ªÀiÁqÀĪÁUÀ CAvÀºÀ ¨ÁrUÉzÁgÀjUÉ ¸ÁªÀiÁ£Àå ºÀgÁdÄ ¥ÀæQæAiÉÄAiÀÄ°è CAwªÀÄ ©qï ªÉÆvÀÛPÉÌ Right of First Refusal gÀAvÉ ±ÉÃ.5 gÀµÀÄÖ ºÉaÑUÉ ¤ ... The petitioner exercised his optio....
By the time he filed the Petition, his right of first refusal was exercised and no communication was issued to him by MIDC accepting his right of first refusal. The cause of action regarding non-allotment of the Plot had accrued to Petitioner as on 10th July 2012. ... GP 66/2 on the ground of right of first refusal would be barred by principles of constructive res judicata. 13. Faced with the difficulty of the ground of ri....
The first plaintiff in reply wrote letter D 6 annexing ?a plan of the access road I intend providing from Peradeniya road". At this time the land marked ?Bus Park? in plan X was land owned by the Council which the first plaintiff had no right to enter. ... The right of servitude having been abandoned, the only right left is the right of access to and from the bus stand. The plaintiffs could only have such a right if the bus stand was a public street or road ....
of First Refusal. ... In the light of these unanimous submissions, the petitions stand disposed of by this order observing that the petitioners will be at liberty to participate in the auction without prejudice to their Right of First Refusal. ... of first refusal to them with liberty to offer 5% more than the highest bids received for their corresponding shops. ... WP No. 8106 of 2018 [D] It is needless to observe that if the petitioners fail to exercise the #HL_STA....
Fernando, who, Counsel states, are first to fourth defendants. ... The first issue in the case was as to whether plaintiff and his predecessors in title had acquired a prescriptive right to this road, and the answer of the Commissioner is in the affirmative. ... The first to tenth defendants and the eleventh and twelfth defendants by their answer denied that the plaintiff exercised any right of way. It was further contended by the defendants that by virtue of the partition decree entered in D. .......
It simply confers upon the collaterals a right that their refusal should first be obtained. This means that in case no refusal is taken from the collaterals they would have the option to enforce their rights to purchase the property by pre-emption. ... Tewari that there were no special reasons for the learned Judge to go against the finding of fact of the first court that no refusal had first been taken from Budha Singh. ... It was argued that even if it be taken that....
The right of the purchaser to be offered first is a contractual right simpliciter (). Simply put, "a right of first refusal" is a privilege given to the purchaser to be first offered to purchase the property at a predetermined price should the vendor be desirous to sell it. ... Whether The Plaintiff Is Entitled To Right Of First Refusal Pursuant To Paragraph 6(b)? ... As such, the plaintiff alleged that they had b....
The tender goes on to provide the web link where the said S.D. Circular No. 2/2002 can be seen, and also culls out some of the relevant Clauses of the said circulars which, inter alia, set out the Right of First Refusal available to Indian vessel owner. The said Right of First Refusal is without any limitation whatsoever. The DGS Circular No. 2 of 2021 had already been issued on 14.01.2021. Pertinently, the tender in question was issued by the IOCL on 26.02.2021.
The first right of refusal will be with M/s Proactive IN & Out Advt. 2. UPSRTC will invite tenders for the display of Advt.after the completion of 1 year of the contract.
It is otherwise known as “the right of first refusal”. A right to purchase property before or in preference to another person is defined as “Pre-emption”. The law of pre-emption was introduced in India by Muhammadan Rulers. Muhammadan Law gives the name “Shufaa” for the right of pre-emption and defines it, as power of possessing the immovable property, which has been sold by paying the sum equal to that paid by the purchaser.
Clause 2.4 deals with the right of first refusal for expansion. The right of first refusal will lapse if the parties are unable to conclude a term sheet or memorandum of understanding within 3 months of the joint collaboration of the project first being formally broached in writing by one party to another, referring to this right of first refusal in this Agreement. The clause is inserted below : Right of first refusal for expansion : (a) If either of PSA or ABG, itself or through a related company, participates in further port projects sharing the same port trust jurisdicti....
With effect from the date this Agreement becomes effective, neither party shall sell any shares in the Company held or acquired by it without first offering the Shares to the other party. The clause 6.1 of the said SPA will have to be understood in the backdrop of the above understanding arrived at while executing the SPA between plaintiffs and defendant no.1. Clause 6.1 reads thus:- “6.1 Right of first refusal: The offer shall be in writing and shall set out in the price and other terms and conditions.
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