外文翻译 RETHINKING RIGHTS OF FIRST REFUSAL David I. Walker* Among the many provisions of the incorporating documents of a close corporation, an item will often appear (usually well towards the back) labeled “Rights of First Refusal.“ By adopting this provision, the shareholders of the corporation promise that they only will sell their shares after negotiating a price with a third party and offering the shares at that price to their fellow shareholders. Although the details will vary, such rights of first refusal are ubiquitous in commercial contracts and encumber assets ranging from gas stations to oil pipelines, from shares of stock to livestock; and they are not limited to constraining sales or even to restricting the disposition of property.In the typical right of first refusal arrangement, at least three parties are implicated - the owner and rightholder who have contracted for the grant of the right and one or more potential third-party buyers. This Article investigates the economic impact of the grant on each of these parties, and seeks to determine why the contracting parties make such commitments and why they adopt this particular instrument. This Article has three primary goals: 1. Demonstrate that rights of first refusal are costly for the contracting parties.The few commentators who have considered the matter have suggested that rights of first or, beyond transaction costs, simply transfer value from the refusal are economically innocuous grantor to the rightholder. If, at worst, a right of first refusal simply transferred value between the contracting parties, little justification would be needed for its adoption. The transfer could be compensated for ex ante, if necessary, and the benefit beyond transaction costs arising from the instrument would represent added value to be divided by the contracting parties. My first goal, however, is to demonstrate that parties adopting rights of first refusal incur more than dispute and negotiation costs. Rights of first refusal discourage potentially high-valuing third-party bidders from entering a contest to purchase, and thus the instrument reduces a seller!s expected realization. For this reason the right of first refusal proves to be costly for the contracting parties, in aggregate. 2. Rebut the idea that rights of first refusal provide efficient insurance against bargaining breakdown.Although the right of first refusal is demonstrated to create a net cost for the contracting parties, the right does provide benefits. Several books and articles dealing with rights of first refusal in the close corporation context suggest that the device is used to assure compatible management, maintain family control, or otherwise protect the remaining shareholders from an interloper. The existence of such goals, however, explains only why an insider might value property, in this case shares, more highly than an outsider would; it does not explain why the encumbrance is necessary. Presumably, if the insider places the highest value on shares or other property, he will buy them when they are offered for sale. Underlying this rationale, then, must be a further argument about bargaining breakdown. Fully spelled out, the argument is that an insider may place a high idiosyncratic value on a property and that, absent the insurance provided by a right of first refusal, such value could be lost in a failed negotiation.Although helpful, the bargaining-breakdown explanation is not fully persuasive. The second aim of this Article is to rebut this justification by demonstrating that equally effective insurance against bargaining breakdown can be provided at lower cost through an instrument that I call a commitment to auction. 3. Suggest that rights of first refusal are primarily motivated by a desire to inhibit exit.Having rejected the bargaining-breakdown-insurance hypothesis as inadequate, my third goal is to develop alternative explanations for the persistence of rights of first refusal. I argue that most rights of first refusal spring from a desire not just to ensure that, if A sells, B gets an opportunity to purchase the property, but from a desire to inhibit A from selling in the first place. In other words, the selection of the right of first refusal over the commitment to auction must be explained by a desire to restrain alienability and preserve the status quo. Although credible in the context of close corporations and other co-venturing relationships, this justification does not make sense in all circumstances in which the right of first refusal is adopted. In contexts in which inhibiting exit is an unpersuasive justification, however, the right of first refusal generally carries a lower incremental cost, and the instrument!s persistence may be partially explained by network externalities. Part I describes the uses of rights of first refusal, their variations, and alternatives, as well as the assets typically encumbered and the