The Quarterly Journal of Judicial Law Views

The Quarterly Journal of Judicial Law Views

The Nature and Requirements of the Right of First Refusal Contract in Iranian, French and American Law

Document Type : aa

Authors
Amir Mohammadi 1
Seyed Morteza Ghasemzadeh 2
1 دانشکده علوم قضایی و خدمات اداری
2 Department of Private Law, University of Judicial Sciences and Administrative Services, Tehran, Iran.
10.22034/jlvi.2025.2048460.1276
Abstract
The right of first refusal contract is a significant tool in restricting the owner's discretion in transferring property. Given the absence of specific regulations in Iranian law, a comparative study of this contract can clarify its nature and requirements. This research, employing an analytical-comparative approach, examines the right of first refusal contract in the legal systems of Iran, France, and the United States. The main research question is: what is the nature and specific requirements of this contract in each of these legal systems? In French law, prior to the 2016 reforms, this agreement was recognized in judicial practice, and post-reform, it has been acknowledged as a preliminary contract alongside a unilateral commitment. In the United States, this agreement resembles an option contract and a negative covenant, prohibiting the owner from transferring the property to a third party without respecting the right of first refusal. In Iranian law, due to the lack of specific regulations, this agreement is interpreted based on the principle of contractual freedom as a negative obligation with the nature of a substitute obligation. Regarding requirements, specifying the price in the contract is not mandatory, and the absence of a time limit does not conflict with the principle prohibiting perpetual obligations, as the agreement only limits the choice of buyer, not the transfer itself. This study demonstrates that the right of first refusal contract maintains a legal balance between the owner and the beneficiary and prevents violations of the right of first refusal in all legal systems. Examining this issue in Iranian law can contribute to the development of legal rules and legislative solutions. 
Keywords
Right of First Purchase
Negative Covenant
Freedom of Contract
Facultative Obligation
Perpetual Obligations
Unilateral Promise
Option Contract
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  • Receive Date 21 December 2024
  • Revise Date 05 April 2025
  • Accept Date 13 May 2025