06-03-09 ST. GEORGE'S DRAGONS, L.P V. NEWPORT REAL ESTATE
GROUP, L.L.C.
A-5779-06T1/A-6115-06T1 (consolidated)
The case concerns a lease giving the tenant of a commercial
building the right of first refusal to purchase the property.
We reviewed the legal principles applicable to rights of first
refusal, concluding that both the first-refusal clause and the
third-party offer were to be construed using traditional
principles of contract interpretation. A first-refusal clause
may specify that the right-holder must pay brokers' commissions
and may guarantee the seller a net recovery on the sale.
However, where neither the right of first refusal nor the third-
party contract contained such provisions, the right-holder was
only required to match the third party's purchase offer, and the
seller was obligated to pay the brokers' commissions, although
this resulted in the seller othe sale to the right-holder.
Richard Sadowski
Assistant Editor
