What is a right of first refusal agreement?
A right of first refusal (ROFR) lets the holder step in and buy an asset on the same terms a third party has offered, before the owner can sell to that third party. It is common between business partners, distributors and suppliers, co-owners of a company, and neighbours or tenants interested in a property. Unlike an option, it doesn't force a sale or fix a price in advance: the owner decides whether and when to sell, and the market sets the terms.
This template defines the asset and how long the right lasts, then sets out the mechanics that make a ROFR work in practice: a written offer notice with the buyer's name, price and terms; a decision period for the holder; a completion deadline if they accept; a window for the owner to sell to the third party if they decline, on terms no better for the buyer; how to match non-cash offers and package deals; the owner's promise not to grant conflicting rights or restructure to avoid the right; transfers that don't trigger it; and an optional fee for the right.
- Best for
- Business assets, product lines, shares in a small company, property interests
- Signed by
- The owner and the rights holder
- Lasts
- You choose: 1, 2, 3, 5 or 10 years
- Length
- 2–3 pages, initialled on every page
When to Use a right of first refusal agreement
- A distributor wants first chance to buy a product line if the manufacturer ever sells it
- A minority shareholder wants to match any offer for the majority owner's shares
- A business partner wants first refusal on the other partner's equipment or premises
- A tenant wants the chance to match an offer before the landlord sells the building
- An investor negotiates first refusal on a founder's side business or intellectual property
What You Fill In
15 blanks, then the name and email of each person who signs: owner, rights holder.
1 The parties
- Date of this agreement*
- Owner (company or person)*
- Owner address
- Rights holder (company or person)*
- Rights holder address
2 The asset
- The asset covered*
- The right lasts for* 1 year · 2 years · 3 years · 5 years · 10 years
- Transfers that don't trigger the right
3 How it works
- Days the rights holder has to decide*
- Days to complete a purchase after accepting*
- Days the owner then has to sell to the other buyer*
4 Payment for the right
- Currency*
- Fee paid for the right
- Wider arrangement the right is part of
5 Other terms
- Governing law*
6 Who signs
- Owner signature and date, job title, initials on every page · The person or company that owns the asset and is granting the right.
- Rights holder signature and date, job title, initials on every page · The person or company receiving the right to match offers.
What the right of first refusal agreement Covers
- The asset
- Grant of the right
- Offer notice
- The Rights Holder's decision
- If the Rights Holder declines
- Non-cash offers and package deals
- The Owner's promises
- Payment for the right
- How the right ends
- General
Using the right of first refusal agreement, step by step
1 Describe the asset precisely
There should be no doubt what is covered: for a product line, its name, designs, trademarks and stock; for shares, the company and number of shares; for property, the address and legal description.
2 Set the deadlines
Choose how many days the holder has to decide after an offer notice (30 is common), how long they then have to complete a purchase, and how long the owner has to sell to the third party if the holder declines. After that window, a new offer notice is needed.
3 Add exclusions and payment
List any transfers that shouldn't trigger the right, such as a transfer to a company the owner controls. Enter a fee if the holder is paying for the right, or describe the wider deal it is part of.
4 Sign and keep it with your records
Both parties sign and initial every page. For land or buildings, check whether the right should also be recorded or registered so later buyers are bound by it.
Tips Before You Send It
- A ROFR is not an option: it doesn't let the holder force a sale or fix the price. If you want that, you need an option agreement.
- Keep decision periods realistic — too short and the holder can't arrange finance; too long and third-party buyers walk away.
- Think about package deals: the template lets the holder buy the asset alone at the price allocated to it.
- Rights over land often need a particular form or registration to bind future owners; take local advice for property.
Sign It Online In Minutes
- Fill in the blanks. Names, dates and amounts go straight into the agreement — the preview shows exactly where.
- Name who signs. Tick “This is me” for your own part. VergeHR builds the PDF with every signature, date and initials box on the right line, and you can check or move anything before sending.
- Send it. Each signer gets a secure link and signs from any device — no account needed. The signed PDF, with an audit trail and a Certificate of Completion, is filed in Files and emailed to everyone.
Right of first refusal agreement: frequently asked questions
What is the difference between a right of first refusal and a right of first offer?
With a right of first refusal, the owner finds a third-party buyer first and the holder can match that offer. With a right of first offer, the owner must offer the asset to the holder before looking for other buyers. This template is a right of first refusal, although the owner may also start the process by naming its own asking price.
What happens if the holder does nothing?
If the holder doesn't reply within the decision period, they are treated as having declined, and the owner may sell to the named buyer within the sale window on terms no better for the buyer than those in the offer notice.
How do you match an offer that isn't all cash?
The holder may pay the cash equivalent of the non-cash part. If the parties can't agree the value within 10 days, an independent valuer they choose together sets it, and the decision period restarts.
Can a right of first refusal be signed electronically?
For business assets and shares, electronic signatures are generally valid in the US (ESIGN Act and UETA), the UK, the EU (eIDAS) and Canada. Rights over land can be different: some places require a particular written form, a deed, witnesses or registration, so check before relying on an e-signed ROFR over property.