RIGHT OF FIRST REFUSAL
- Right of first refusal is a contractual term giving its holder the option to buy or sell something before the owner is allowed to buy or sell the same item to a third party.
- Grants the terms of a transaction to one party to determine if they are interested (i.e., the holder of the right of first refusal) before it is given to a third party.
- May be provided at a cost, but usually traded for some interim privileges including the use of the specific asset or another asset.
- Carries the same terms and conditions (e.g. $1 million, payable immediately) for the holder and any subsequent sale (e.g. $1 million, payable immediately)...ie burden on the seller is minimal.
- Typically limited in term.
'University shall have the right to request that Sponsor make a final decision regarding such assignment no later than sixty (60) days after the University’s request.'
PVP Example
- The most common type of exclusivity at the beginning of a partnership is likely to be first right of refusal, or exclusivity based on single varieties provided by the licensor. The licensor provides a few varieties of its choice, or it may allow the licensee to choose its candidates among a number of varieties for commercialization.