A rights upon future offers (RUFO) clause is a clause used in certain

contract A contract is an agreement that specifies certain legally enforceable rights and obligations pertaining to two or more parties. A contract typically involves consent to transfer of goods, services, money, or promise to transfer any of thos ...

s, in which a party who has agreed to contractual terms, gains certain rights if other parties in future obtain better or different terms. Such clauses may be used to induce a party to be more willing to accept contractual terms, in the knowledge that if better terms are offered to someone else in future, the same improved terms will also be applied

retrospective A retrospective (from Latin ', "look back"), generally, is a look back at events that took place, or works that were produced, in the past. As a noun, ''retrospective'' has specific meanings in software development, popular culture, and the arts. ...

ly to all existing parties as well. An example of the potential dangers of such clauses, if not considered carefully, arose during the Argentine debt restructuring of 2005–2014. In this case 93% of bondholders accepted a reduced settlement while 7% refused and went on to win a

lawsuit A lawsuit is a proceeding by one or more parties (the plaintiff or claimant) against one or more parties (the defendant) in a civil court of law. The archaic term "suit in law" is found in only a small number of laws still in effect today ...

entitling them to full settlement. Argentina declared itself unable to pay either, despite having the money to do so, since the settlement of a better offer with the small number of holdout creditors would, it feared, trigger a RUFO clause and cause the remaining 93% to be entitled to receive their payment in full as well, which the country could not afford.

References

Contract clauses {{Law-term-stub

See also

References