QUESTION
Right of First Refusal On Lottery Winnings
Asked on Nov 21st, 2012 on Breach of Contract - California
More details to this question:
Hello,
I won a California state lottery prize that pays me an annuity every year for 20 years, and I utilize a funding company, SenecaOne, for a next check loan advance in order to get some more money that I needed at the time. However, when I signed the loan documents with them, they had put in a Right of First Refusal clause that basically forces me to go to SenecaOne for any additional funding services that I may use in the future, and if I were to receive an offer from a third party, then I have to inform SenecaOne in writing, and give them a chance to match the offer before I go with the third party funding source. I was wondering if the Right of First Refusal clause is legal and enforceable in a court of law? I was unaware that by signing the loan document, I had effectively signed away all my future funding options for my lottery prize. Thank you very much for your help..
Thanks,
Jonathan
1 ANSWER
There are many situations in which rights of first refusal are utilized, especially in real estate matters, but I must confess I've never heard of it in this situation. Assuming all other contractual prerequisites are met (and from what you've written I have no reason to doubt that they have been) I see no reason why the right of first refusal clause would not be enforceable. However, if it is a true right of first refusal, it only gives SenecaOne the right to match any offer you may receive. Thus, SenecaOne would have to match the terms of any other funding offer you got, so, unless you have some other reason to favor some other funding organization, I don't think you've lost anything.
Answered on Nov 26th, 2012 at 10:46 AM