The principle of good faith in relation to the right of first refusal

Right of first refusal (ROFR) is the right that entitles the owner of the right to purchase the good in case the subject matter of the right is sold to a third party. There are two types of right of first refusal: right of first refusal arising from the law and right of refusal arising from contracts. The right arising from contracts can be recognized voluntarily by contract or will, the right arising from the law is regulated through various codes, especially the Turkish Civil Code No. 4721 in the case of Turkey. The right of refusal is exercised by filing a lawsuit if the goods that are the subject of the right are sold or are subject to a transaction equivalent to the sale. It must be used within three months from the notification of the said transaction subject to right of first refusal and cannot be used after two years after the transaction. For the right to be exercised, the event, which is a transaction equivalent to a sale in economic terms, must take place. The law did not restrict the transactions subject to right of first refusal to a specific list. For this reason, it is debatable whether transactions such as the preliminary contract for sale or purchase contract, or barter contract could be accepted as events. It is accepted by jurisprudence that the pre-emption right cannot be exercised in case of the existence of transactions that violate the rule of good faith (bona fides). The Court of Cassation of Turkey has ruled specific cases would not be subject to right of first refusal due to good faith assumption. For instance, if the immovable asset which is subject to joint ownership has de facto division or sales made to the legal representative of the person, these could not be considered as events subject to right of first refusal and the right of first refusal cannot be exercised in such cases. In our study, the right of first refusal was studied in general, then the occurrence of the event causing right of first refusal the use of the right through litigation, the periods of foreclosure, and the procedures that prevent the use of the right of first refusal were mentioned. In the last part, the article discusses the definition of good faith and then the limits of right of first refusal arising from good faith.