The Bottom Line
- A right of first refusal does not lock in the terms of your existing contract. The offering party is free to propose a new agreement with entirely different and more demanding conditions.
- To exercise this right, your acceptance must be a mirror image of the offer. Any material deviation will be treated as a counter-offer, which can be rejected, effectively ending your preferential rights.
- New commercial realities, such as stringent sustainability and ESG criteria, can be validly introduced into a renewal offer, even if they were absent from the original long-term agreement.
The Details
This dispute involved tire manufacturer Hankook and motorsport organizer Creventic, who had a decade-long sponsorship agreement for the 24H Series. The contract contained a clause giving Hankook an exclusive right of first refusal for renewal. When the contract neared its end, Creventic secured a new deal with competitor Michelin and, as obligated by a prior court ruling, presented Hankook with an offer to renew on the same terms as those agreed with Michelin. This new offer included significantly updated conditions concerning tire specifications, sustainability, and payment structures.
Hankook responded, claiming to accept the offer and exercise its right. However, its response altered several key conditions, proposing to manufacture tires in South Korea instead of Europe, offering different sustainability certifications, and suggesting a different invoicing process. The District Court of Limburg determined that this was not a valid acceptance. Under Dutch contract law, an acceptance that deviates from the offer is considered a rejection and a new counter-offer. As Creventic immediately rejected this counter-offer, the court concluded that no new agreement had been formed between the parties.
Crucially, the court clarified the commercial nature of a right of first refusal. It is not an option to simply extend an old agreement, nor is it a guarantee of renewal. It is merely the right to receive an offer for a new contract. Creventic was fully entitled to incorporate modern commercial demands, such as European-based manufacturing and enhanced sustainability credentials, into its offer. Since Hankook failed to accept these new terms precisely as offered, its right of first refusal was exhausted, leaving Creventic free to finalize its partnership with Michelin.
Source
Rechtbank Limburg
