Contracts
In Michigan, a 'right of first offer' differs from a 'right of first refusal' in that:
AThey are legally identical
BA right of first offer requires the owner to offer the property to the rights holder first before marketing it; a right of first refusal allows the holder to match an already-received third-party offer✓ Correct
CA right of first offer applies only to commercial property
DA right of first refusal is not enforceable in Michigan
Explanation
A right of first offer requires the property owner to offer the property to the rights holder before marketing to others, and the holder makes an offer. A right of first refusal allows the holder to match a bona fide third-party offer before the owner accepts it.
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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.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
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