A right of first offer (also known as a right of first negotiation) is a right created by contract that provides one party with the benefit of being the first party to present an offer to purchase real estate. The seller of real property under a right of first offer has a legal duty to entertain exclusive and reasonable negotiations with the rights holder prior to conducting negotiations with any third parties.
The First District Court recently upheld a corporation’s right of first offer relating to Jacksonville Real Estate. In Smurfit-Stone Container Enterprises, Inc. v. Zion Jacksonville Limited Partnership,et al, the Plaintiff (appellant) Smurfit-Stone sued to have the Duval County Circuit Court declare their right of first offer relating to Jacksonville real estate valid and enforceable and to compel the purchaser of the subject real estate, the City of Jacksonville, to honor the right of first offer by allowing Smurfit-Stone to bid on the property.
The First District Court of Appeal in Tallahassee declined to follow the Trial Court’s determination that the right of first refusal amounted to an unreasonable restraint on the alienabilty of the subject property because the right was unlimited in duration, did not state the express reason for creation, and did not provide for charitable conveyance.
In reversing the Trial Court’s Summary Judgment, The First DCA held that right of first offer did not unreasonably effect the marketability of the subject property, and therefore was not invalid as a matter of law.
Smurfit-Stone Container Enterprises, Inc. v. Zion Jacksonville Limited Partnership,et al
