You really like your neighbor's lawnmower. You really like it. Like, sometimes at night, you sneak over to the little window on their garage and peek in at it. And when they're away on vacation...you ride Bruce. Yes, you named him.
You've told your neighbor you want to buy it/him. He's promised you that if he ever sells the lawnmower, you will get first crack at it. He has assured you (many, many times, before he stopped returning your texts) that he won't sell it to someone else until he gives you an opportunity first.
That situation defines the right of first offer.
The term refers to a contractual stipulation whereby one party gets first dips on bidding on an asset. If the second party chooses to sell, they have to give the other party a chance to bid first.
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Finance: What is a Commitment Letter?5 Views
Finance a la shmoop what is a commitment letter? dear Rebecca it's been fun and
all but asking me to move in with you was a real turnoff so uh have a nice [Rebecca reading letter]
life yeah that would be a fear of commitment letter I know that one well
well so what's a commitment letter then all right well you need dough but you
don't need it today you need it in six months when construction is finished on
your cabin by the lake at that point you'll convert your very expensive
building loan into a normal mortgage well you can go to the bank and for a [Man walks into bank]
small ish fee get a commitment letter from them which stipulates that assuming
nothing material changes between now and then you will in fact then get a loan
for one hundred fifty two thousand dollars at 5 percent fixed interest rate
for 30 years the bank is then committed to giving you that loan when you know [Contract stamped with committed]
eventually you need it that way you don't have to worry about your bank you
know breaking up with you which is nice because it's tough getting
the It's not you it's me speech from a guy in a bowtie [Man wearing bow tie talking to a man in the bank]
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