|
Rights
of First Refusal – How Long Do They Last?
Q:
I purchased three horses two years ago and signed a bill
of sale with the seller that said that she has a right
of first refusal if I want to sell them. I just
lost my job and have to sell the horses. I offered
them to the previous owner first, but she did not want
to buy them back. The person who is buying the
horses from me is worried that the previous owner’s
right of first refusal will continue. How long
does a right of first refusal last?
A:
Generally speaking, a right of first refusal in a horse
sale is a contract term that requires a horse’s new
owner to first offer the horse for sale to the previous
owner (and typically on certain terms) if the horse’s
new owner later decides to sell the horse to another
person. To avoid uncertainty and confusion, any
contract containing a right of first refusal should
specify when and if the right of first refusal will
terminate, and upon what terms the horses must be
offered to the previous owner for purchase.
In
your situation, you must look to the bill of sale that
contains the right of first refusal to determine whether
the former owner has any residual rights now that she
has declined to repurchase the horses. If the bill
of sale does not specifically state otherwise, the
former owner’s right of first refusal automatically
terminated when she declined to repurchase the horses,
and therefore, the new owner will purchase the horses
from you free and clear of any claims by the former
owner.
To
help protect yourself against any disputes that might
arise later, you should document your offer to the
former owner, and the fact that she declined. For
example, you could send the former owner an email
containing the offer, and then you would likely have her
email reply, which you could then print out and save.
You could also send the former owner a fax or letter
(with confirmation of delivery). If your contract
does not state a time limit within which the former
owner must respond, you should specify a reasonable time
limit in your offer (e.g., five business days) to avoid
undue delay in selling the horses to your new buyer.
|
