A right of first refusal gives a specified person or group the opportunity to match an offer before an owner transfers an interest to another buyer.
Definition
A right of first refusal, or ROFR, is a contractual right to match a qualifying offer before the owner completes a proposed transfer to someone else. In an engineering firm, the right may belong to the company, other owners, or another specified party. The agreement typically defines what counts as an offer, what notice must be provided, how matching terms are determined, and how long the holder has to respond. These details can affect transaction timing and the range of potential buyers. A ROFR is not the same as a right of first offer, which may require an owner to approach a specified party before seeking outside offers. It also does not guarantee that the holder will buy. Owners review the clause alongside transfer restrictions and other sale provisions because overlapping terms may shape the transaction process.
How owners use it
- An owner checks the notice period and matching procedure after receiving a proposed purchase offer.
- The company identifies which owners may exercise a ROFR and how their responses are recorded.
- Before a planned transfer, owners compare the ROFR process with other approval requirements.
