Right of first refusal
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Right of first refusal (ROFR) is the right to make an offer AFTER offers from others are considered.
In contrast, Right of First Offer (ROFO), is the right to make an offer BEFORE offers from others are considered.
Examples:
Right of First Refusal (ROFR): This is what "chills the bidding". Say you are looking to sell an asset and someone has a ROFR on it. If a third party now comes along and offers $100 for the asset, you have to reveal that price to the party who has a ROFR, and if he chooses to execute his ROFR, he can pay $101 and walk away with the asset.
Right of First Offer (ROFO): This is where you are in a partnership, and you are looking to sell your piece and the partner has a ROFO. Step 1: Make an offer to your partner to buyout the piece for say $200. Step 2: If they refuse then you can take it out into the open market and see if you can get $200 -- if you can't, you can't just sell it for a lower number, you need to re-run the process and offer your partner another look.
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