The provision may require consent, permit termination, accelerate obligations, or trigger payments upon a change of control. Definitions vary in what ownership shift qualifies.
Provisions appear in leases, licenses, credit agreements, and employment contracts.
Alternative Names:
Change of Control Clause|CoC Provision
Why it Matters?
Change of control provisions in key customer and supplier contracts can eliminate the value the buyer is paying for, which is why identifying them is a diligence priority rather than a closing checklist item. Whether a stock purchase triggers a provision drafted around assignment depends on the specific language, since equity transfers frequently fall outside assignment restrictions. Obtaining consents before signing is preferable to conditioning closing on them.
Frequently Confused with
Related terms
Frequently asked questions
Does a stock purchase trigger assignment restrictions?
Why identify these provisions early?
