A good right of first refusal clause can be tricky to draft. One basic premise to that clause is that there has to be a term specified. Here it appears you specified the initial one year term, that it match the purchase price. Then you left an “open term.” An open term generally will not be enforceable as a valid contract. This kind of term is construed by the courts in many states as similar to non-compete clauses. Because this kind of clause in a contract limits the ability of a person to do something that he or she would normally have a legal right to do, the clause must be very specific and from what I learned many years ago in law school, must include a time limit. States vary in their interpretation of these clauses, so if you want good advice on what the options are, you should check with a local attorney that is familiar with the state common law interpretation for this kind of contractual agreement.
Another issue is that there is often some kind of consideration that is spelled out in the contract for that right of first refusal. It could be money, or a month of free board, or something. But to create a valid clause, it is better to spell out some kind of consideration. This issue can vary from state to state,
Bear in mind that the lawsuit could be very costly and my best guess is it is not worth the headache. However, if the buyer really wants the horse back, she should approach the current owner and offer to buy it. Even if your clause was considered valid and legally binding (which it may not be due to the lack of term specified), a breach of contract is generally not actionable unless the horse actually gets sold, and the old owner establishes that they wanted to buy the horse, and is ready to buy the horse and in fact will do so. SO if the owner really wants to get the horse back and play this game in court, she is going to have to make the offer, have it rejected, and then file a suit. And I cannot say this is going to be a winner of a case for them, due to the fact that the term was left open after the first year.
Please bear in mind that each state has different common law principles that will effect the outcome of the case. I am a lawyer, but in no means wish to give any legal advice in the matter. I only mean to help you understand basic principles so that you can better understand whether you should contact an attorney and consider what options might be appropriate.
Also, for those of you that are drawing an analogy to a homeowner’s association, that kind of clause is not construed in the same manner as a right of first refusal clause. That would be a long analysis to explain, so I wont go into that. But they are not the same.
A good question to ponder is whether the old owner really wants to get the horse back, or are you just offended that the spirit of the clause was not honored? Court’s only award damages based on actual loss to a party.
