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Simple English definitions for legal terms
first option to buy
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A quick definition of first option to buy:
A first option to buy is a contractual agreement that gives a potential buyer the right to buy a property first, at a specified price, if the seller decides to sell within a certain period of time. For example, if Beth has a first option to buy Sam's house for five years at $100,000, Sam can either keep the house for five years or offer it to Beth at the agreed price. If Beth refuses, Sam can sell to someone else. This is also known as a right of preemption.
A more thorough explanation:
Definition: A first option to buy, also known as a right of preemption, is a contractual agreement that gives a potential buyer the first opportunity to purchase a property or asset at a specified price if the seller decides to sell within a certain period of time.
Example: Beth has a right of preemption on Sam's house for five years at $100,000. If Sam decides to sell the house during those five years, he must offer it to Beth first at the agreed-upon price. Beth can then choose to buy the house or refuse the offer. If she refuses, Sam can sell the house to someone else.
Explanation: This example illustrates how a first option to buy works. Beth has the right to purchase Sam's house before anyone else if he decides to sell it. This gives her an advantage over other potential buyers and ensures that she has the opportunity to buy the house at a fair price.