Effectively, the right of last refusal gives one party the last bite at the apple. Like the right of first negotiation, this clause comes into play when the owner of copyright or any other rights wants to sell or license those rights.
After the copyright owner has negotiated a deal for the sale or license of the copyright the owner must first offer those same deal terms to the person who holds the right of last refusal.The holder of the right of last refusal is given a time limit, typically 2 weeks to 30 days, in which he or she must accept the offer, or the offer is deemed refused. Only after the holder of the right of last refusal has rejected the offer may the copyright owner sell or license the copyright to the party they were negotiating with originally. Like the right of first negotiation, the right of last refusal clause is often found in writer's agreements, screenplay options, and director's and actor's services agreements.
Example: Paulina the producer has a right of last refusal clause in her literary acquisition agreement with Neville the novelist. Neville has negotiated with Bentley the Broadway financier for the sale of the rights to his novel to make a Broadway play, and Neville and Bentley have agreed upon price and other terms; Bentley now has a firm offer off the table to Neville. Before Neville can accept Bentley's offer, he must first go back to Paulina and give her a chance to purchase the stage rights on the same terms as those that Bentley offered.
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