Glossary
RestrictionsUpdated Sep 23, 2026What Is a Right of First Refusal in a Contract?
A right of first refusal lets one party match any offer you receive from a third party before you may accept it. Related versions give a right of first offer (they get to bid first) or first negotiation (they get to talk first).
Why it matters
It slows every future deal it covers and can put off other buyers, who know their offer may simply be matched.
How common is it?
In the 510 public-company commercial contracts of the CUAD dataset (The Atticus Project, CC BY 4.0), 85 (16.7%) contain a right of first refusal, offer or negotiation.
Among contract types with at least 20 contracts in the set, it shows up most in development agreements (12 of 29), strategic alliance agreements (10 of 32) and license agreements (9 of 33).
These are larger-company deals, not a sample of every contract — a reference point, not a rule. Full method: /data/cuad.
What to watch for
- A long response time for the holder of the right.
- A wide scope: every future product, not just the one in the deal.
- No end date.
A realistic example
A game studio gives its publisher a right of first refusal on “any future title.” A second publisher's offer for a new game sits for 60 days while the first decides whether to match.
What to ask for
- A short response window, such as 10 business days.
- A scope limited to named products, and an end date.
Related terms: exclusivity clause · most favored nation clause · change of control clause
Related guide: 7 things to negotiate before you sign a contract
See how the right of first refusal reads in your contract — 👉 Analyze your contract free — your first analysis is free, no card, no deadline to use it.
Not legal advice. This is an educational definition of a common contract term. Details vary by jurisdiction — this page explains common U.S. usage. For high-stakes agreements, have a lawyer review the final version.