ContractsIntermediateDelaware Exam

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 leaseCorrect
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

Why The right of a specified person to have the first opportunity to purchase or lease if the owner decides to sell or lease Is Correct

Answer B: The right of a specified person to have the first opportunity to purchase or lease if the owner decides to sell or lease

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.

Exam Tip: Contracts

Contract questions frequently test the essential elements required for a valid contract. Remember: competent parties, mutual consent, lawful object, and sufficient consideration. Watch for void vs. voidable distinctions.

Key Contracts Terms in This Question

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