Which statement about a right-of-first-refusal provision is correct under the Statute of Frauds and general reasonableness standards?

Which statement about a right-of-first-refusal provision is correct under the Statute of Frauds and general reasonableness standards?

• A. It is void because the price is to be determined by a panel of experts.
• B. It is void if it binds future heirs.
• C. It is valid if reasonable under Statute of Frauds and price determined by experts.
• D. It automatically terminates upon the death of the grantors.

Answer: (C)

The main idea here is how a right-of-first-refusal (ROFR) can be enforceable under the Statute of Frauds and still meet general reasonableness standards. For land-related promises, the agreement must be in writing, and the price or a clear method to determine price must be sufficiently definite. If the price is left to a reasonable, objective mechanism—such as being determined by a panel of experts—that provides a workable, ascertainable price, the ROFR can be valid and enforceable. That’s why choosing a mechanism where price is determined by experts fits the requirement for definiteness and reasonableness. The other statements miss key points. Having the price set by a panel of experts does not render the ROFR void; it can actually satisfy the need for a definite price. Binding future heirs to the ROFR is not inherently void; many rights run with the land and bind successors if properly drafted. Termination on death of the grantors is not automatic in every case; the instrument may specify termination events, or allow the ROFR to survive, depending on its terms.

The main idea here is how a right-of-first-refusal (ROFR) can be enforceable under the Statute of Frauds and still meet general reasonableness standards. For land-related promises, the agreement must be in writing, and the price or a clear method to determine price must be sufficiently definite. If the price is left to a reasonable, objective mechanism—such as being determined by a panel of experts—that provides a workable, ascertainable price, the ROFR can be valid and enforceable. That’s why choosing a mechanism where price is determined by experts fits the requirement for definiteness and reasonableness.

The other statements miss key points. Having the price set by a panel of experts does not render the ROFR void; it can actually satisfy the need for a definite price. Binding future heirs to the ROFR is not inherently void; many rights run with the land and bind successors if properly drafted. Termination on death of the grantors is not automatic in every case; the instrument may specify termination events, or allow the ROFR to survive, depending on its terms.