A growing trend in the aircraft resale business in the first right-of-refusal (FROR) clause in aircraft sales agreements.  What are they?  And, should you sign one?

In an effort to gain repeat business from an airplane buyer, the FROR basically obligates you, the aircraft owner, to contact your selling broker, dealer, or manufacturer and give them first rights to either buy your airplane back or to market it on your behalf for a pre-set fee.   Their thinking, of course, is that it will be a future sale for them that they will not have to get by other, more expensive, means.  This is far cheaper and easier for them than it is to court your business over the next X number of years only to have you decide to use someone else or sell it yourself.  Many larger brokers and dealers, and even a manufacture or two, are inserting FROR clauses into their purchase agreements.

Personally, I think this is a lousy practice.  It does not cause the reseller to earn your business nor does it guarantee that this will be the best situation for you.  Maybe you've found someone else who you prefer to work with.  Or, maybe you can get a better deal somewhere else.  With a FROR, it doesn't matter what is best for you.  These clauses are there for the betterment of the reseller, not you, and for that reason alone they are a practice WildBlue will never engage in.

Be careful.  FROR clauses are often glossed over, if discussed at all.  Should you see one in a contract for an airplane you are purchasing, simply tell the seller that such a clause will have to be stricken from an agreement if they wish to close the deal.  Most will comply yet a few are likely to hold to their guns.  If so, it will be up to you to decide whether or not the airplane you're buying is worth losing rights as a future seller.