What is the Right of First Refusal in the Philippines? Definition, meaning Pinoy examples

Right of first refusal is a contractual right that gives a party the option to enter into a transaction before anyone else. This right typically arises in situations where one party, such as a property owner, wants to sell or lease their property, but they want to give another party, such as a current tenant, the opportunity to match any offers that they receive from third parties.
For example, let's say that a property owner wants to sell their rental property. However, the current tenant has a right of first refusal in their lease agreement. This means that if the property owner receives an offer from a third party, they must first offer the property to the tenant at the same price and under the same terms as the third party offer. The tenant then has the option to accept or decline the offer.
Right of first refusal can also apply to other types of transactions, such as the sale of shares in a company or the licensing of intellectual property. It is a way for parties to protect their interests and ensure that they have the opportunity to participate in transactions that affect their assets or rights.