A grantor grants reciprocal rights of purchase (ROFR) on a larger tract, with the purchase price to be set by three independent appraisers. Does this ROFR violate the Rule Against Perpetuities?

• A. The right to purchase is enforceable because it is a valid option.
• B. The ROFR is valid and enforceable.
• C. The right to purchase violates public policy.
• D. The right to purchase violates the Rule Against Perpetuities.

Answer: (D)

RAP governs options and similar purchase rights, so a ROFR must vest within a life in being plus 21 years. A ROFR is essentially a contingent interest that can become exercisable in the future if a triggering event occurs (often an offer to sell or a sale by the grantor). If that exercisable window isn’t tied to a life in being with a definite end after 21 years, the interest can vest far beyond the horizon allowed by RAP.

In this scenario, the right to purchase on the larger tract is broad and could be exercised at any time after the triggering condition, with the purchase price to be set later by three independent appraisers. That setup does not fix a time limit for when the right must vest; it could remain exercisable long after any measuring life in being has died, potentially beyond 21 years after that life ends. The fact that the price will be determined by appraisers does not cure the timing problem—RAP cares about whether the vesting can occur within the permitted time, not about whether the price is ascertainable.

Therefore, the ROFR violates the Rule Against Perpetuities. If the instrument were framed so the right could vest only within a life in being plus 21 years (or was limited to a definite short period), it could pass RAP.