A right of first refusal is a contractual agreement between two parties, typically seen in real estate or business transactions. This agreement gives one party the first opportunity to buy or lease a particular property or asset before it is offered to other potential buyers or lessees.

For example, let's say that a landlord and a tenant have a right of first refusal agreement in their lease contract. If the landlord decides to sell the property, they must first offer it to the tenant at a specific price. If the tenant declines to purchase the property, the landlord can then offer it to other potential buyers.

Similarly, in a business context, a shareholder may have a right of first refusal to purchase additional shares of the company before they are offered to outside investors.

In essence, a right of first refusal gives the holder the option to act first, and often provides them with a significant advantage in acquiring a desired asset or property.