Generally, a right of pre-emption gives the grantee an opportunity before anyone else to accept an offer to become the purchaser of land, if and when the grantor wishes to sell the land.

As illustrated in the Right of pre-emption deed [C. J. Conolly, TressCox Lawyers], the usual elements of a right of pre-emption will be:

• the grantee will have a period of time, such as 21 days, to accept the offer and, if it is accepted, a binding contract is created; and

• if the offer is not accepted then the owner has the ability to sell the land to other parties, usually on no less favourable terms.

The critical difference between an option and a right of pre-emption is that a right of pre-emption does not obligate the owner of the land to sell at any time or at all.

However, “rights of pre-emption” or “rights of first refusal” do not have legally recognised meanings but are instead colloquial descriptions of a class of contracts. For example, in one case, although the right was described as a “right of first refusal”, it was held to be, in effect, an option. See What is a right of pre-emption?

A right of pre-emption is a contractual obligation only, and when it is granted, it does not give the grantee an interest in the land. However, a proprietary interest arises when the grantor proposes to sell the land and the rights are triggered. Accordingly:

• the grantee will not have a caveatable interest until the proprietary right arises which will usually occur when the right of pre-emption is triggered;

• a competing interest will have priority until the right of pre-emption is triggered; and

• the principal remedy for a breach of a right of pre-emption is an award for damages for breach of contract, but an injunction may be obtained to ensure compliance with a right of pre-emption.

A right of pre-emption may come to an end after the offer of sale is rejected by the grantee or once the offer of sale lapses (cl 4 of the Right of pre-emption deed [C. J. Conolly, TressCox Lawyers]). However, this will depend on the terms in the right of pre-emption, which may result in a “first and last right of refusal”. If the "first and last right of refusal" is offered, the right does not come to an end until after the grantor has provided the grantee with the final offer to sell.

Once the owner of the land has made an offer to sell this cannot be withdrawn or revoked. The grantee is entitled to accept the offer and insist on the contract.

See Characteristics of a right of pre-emption.