The intent of the parties supports the principle that the rights of the first refusal must be better articulated. ROFR is one of those clauses in real estate that rarely causes conditions. The seller transfers his land only on the basis of his choice, and the seller has no reason to prefer one buyer to another, since all potential buyers will pay the same price. A transaction involving an owner of a ROFR is therefore two parties with the same objective, that is, to transfer a country from one country to another at a price acceptable to both parties. Carl holds a ROFO instead of a ROFR. Before he can negotiate a deal with Bo, Abe must first try to sell the house to Carl, on what terms Abe is willing to sell. If they reach an agreement, Abe sells the house to Carl. But if they fail, Abe is free to start new negotiations with Bo, without price or condition restrictions. The right of pre-emption encourages a tenant to take better care of a landlord`s property in the hope of a future property. It also provides a valuable negotiating tool. A tenant may agree to pay higher rent or make other concessions in exchange for the right of refusal.
However, the right of injunction is a barrier between the seller and an interested third party. A carefully crafted document will tend to resolve most of the contentious issues being negotiated. Since the courts will apply all the reasonable conditions that the parties themselves agree to include in a ROFR clause, practitioners who develop a right of first refusal will be much less likely to trigger unexpected disputes about the importance of their agreements. Neither the buyer nor the seller can deviate from the terms of the proposed contract in good faith. For example, a right holder cannot « accept » by accepting the purchase of the property at the price offered by the third party, but may offer to negotiate other terms of the offer, such as financing and completion date. Such an action by the right holder is not a proper exercise of a ROFR.