Contracts
What is a 'right of first refusal' in a Delaware real estate context?
AThe seller's right to refuse any offer below a certain price
BThe right of a specified person to have the first opportunity to purchase or lease if the owner decides to sell or lease✓ Correct
CA buyer's right to refuse to close if the inspection reveals defects
DA broker's right to list the property first when it comes on the market
Explanation
A right of first refusal gives the holder the right to match any purchase offer received by the owner before the owner can accept it from a third party. It is a contractual right, not a present ownership interest.
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Key Terms to Know
Right of First Refusal
A contractual right giving a party the opportunity to match any offer received before the owner can accept it from a third party.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
Chain of TitleThe sequential record of all transfers of ownership for a piece of property from the original patent holder to the present owner.
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