OPTIONS, RIGHTS OF REPURCHASE AND RIGHTS OF FIRST REFUSAL AS CONTRACTS AND AS INTERESTS IN LAND

Abstract

The Supreme Court of Canada has held that options to purchase land and rights of repurchase immediately create equitable interests in land but not so rights of first refusal. This substantial difference in the property law characterization of these essentially similar contractual rights results in problems in the enforcement of rights of first refusal. This article discusses the nature of options, rights of repurchase and rights of first refusal as contracts and as interests in land. The first part of the article considers the nature of these rights as contracts and discusses, such matters as contract formation, interpretation and assignability. The second part of the article examines the case law about these rights as interests in land, points out a number of inconsistencies, describes the problems of enforcement, and questions the merits of the theories advanced to justify the difference in the treatment of rights of first refusal.