A. This is a great question and one that I get quite often. In any other field of law, I would say that I hate (!) first-right-of-refusal in contracts, because I prefer a nice clean break and because the terms are difficult to enforce. But, in the horse industry, I get it. I’d want one if I sold my best friend, too (in fact, when I’ve personally sold horses, I’ve included this stipulation).
So, what is a “first-right-of-refusal” in a contract?
A first-right-of-refusal is an agreement that gives someone the right to purchase a horse at the exact same terms and conditions contained in an offer that the owner has received (and wants to accept) from another buyer. This is most commonly seen where Party A sells a horse to Party B, then Party B gets an offer to from Party C to buy the horse. But first, Party A must have the opportunity to buy the horse for the same price and under the same contractual obligations as Party C has offered (even if it’s years later!).
So what happens in the situation posed by our reader?
Unfortunately for the former owner of the horse that had the first right of refusal (Party A), her claim is not against you (Party C), but is against the seller (Party B). So long as you (the buyer) have a valid sale contract with your seller, I cannot imagine a scenario in which a court would order you to return the horse to the person with the first right of refusal.
Rather, that person (Party A) has a contract claim against the person that sold the horse to you (Party B), but only for monetary damages. In other words, a court might award that person with money to compensate for the horse that they did not get to exercise the first right of refusal on. But since you have valid property rights to this horse now, the court won’t simply take that horse away from you.
See why I hate the first right of refusal? This contract term is really more of a way to show the parties’ intent (which often goes a long way), but is very unlikely to be enforceable once we are in the situation posed by this reader.