Rights Of First Refusal

Commercial Thinking

Such rights are not uncommonly provided for in various types of commercial contract, to address new products becoming available, changes in supply arrangements or the procurement process once the contract expires.

The nature of such rights was considered in AstraZeneca UK Ltd v (1) Albemarle International Corporation (2) Albemarle Corporation (2011). Albemarle supplied AstraZeneca with 2,6 Di-isopropyl-phenol, which AstraZeneca distilled in its manufacture of propofol, the active ingredient of its anaesthetic, Diprivan. The supply contract provided that, should AstraZeneca cease distillation, it would give Albemarle "the first opportunity and right of first refusal to supply propofol to [AstraZeneca] under mutually acceptable terms and conditions". In the event, AstraZeneca entered into a contract to obtain propofal from a third party.