Change of control clause: Copy, customize, and use instantly
Introduction
A change of control clause outlines what happens in the event of a significant shift in the ownership or control of a party involved in the contract. It helps protect the parties from potential risks, such as the sale or transfer of control to an unknown or undesirable entity. This clause is particularly important in long-term contracts where the identity or stability of the contracting parties is critical.
Below are templates for change of control clauses tailored to different scenarios. Copy, customize, and insert them into your agreement.
Buyer-friendly change of control clause
This variation is designed to benefit the buyer, ensuring they have the option to terminate the agreement or renegotiate terms if the seller undergoes a change in control. It protects the buyer from the risk of dealing with a new, possibly unreliable, entity.
In the event of a change of control of the [seller], [buyer] shall have the right to terminate this Agreement with [X] days' written notice, without any liability. A "change of control" shall mean any sale, transfer, or other disposition of [seller’s] ownership or control to an entity that is not a [subsidiary/affiliate] of the [seller].
Seller-friendly change of control clause
This version benefits the seller, providing them with flexibility to maintain the contract despite a change in control, reducing the risk of termination by the buyer.
In the event of a change of control of the [seller], this Agreement shall remain in full force and effect. The [buyer] shall not have the right to terminate or alter the terms of this Agreement solely due to such change of control, provided that the new controlling entity agrees to assume all obligations under this Agreement.
Neutral change of control clause
This neutral clause balances both parties' interests, requiring both the buyer and seller to notify each other in case of a change of control, but leaving the decision to continue or terminate the agreement to mutual consent.
In the event of a change of control of either party, the affected party shall notify the other party within [X] days. Upon receiving such notice, the other party may, at its discretion, elect to terminate this Agreement or to continue with the terms as agreed. A "change of control" is defined as any transaction that results in the transfer of more than [X]% of the ownership or voting rights of the party.
Change of control with automatic termination clause
This variation ensures that a change of control automatically results in the termination of the agreement, protecting both parties from continuing a relationship with a new, unvetted entity.
In the event of a change of control of either party, this Agreement shall automatically terminate without any further action required by either party. "Change of control" shall be defined as any transfer of ownership or control of [party] to a third party. The terminating party shall not be liable for any damages resulting from the termination.
Buyer-friendly change of control clause
This clause gives the buyer the right to terminate or renegotiate the agreement if the seller undergoes a change of control. This ensures that the buyer is not bound by a new entity that may not meet their expectations.
In the event of a change of control of the [seller], [buyer] shall have the right to terminate this Agreement with [X] days' written notice, with no penalty or further obligation. A "change of control" is defined as any sale, merger, or other transfer of more than [X]% of the ownership interest of [seller].
Seller-friendly change of control clause
This version ensures that the seller can proceed with the contract despite a change in control, offering stability for the seller and reducing the risk of termination.
A change of control of the [seller] shall not affect this Agreement. The Agreement will continue in full force and effect, and the [buyer] will not have the right to terminate or modify the terms unless expressly agreed in writing.
Neutral change of control clause
This neutral clause provides an equal standing for both parties, requiring mutual consent to terminate or modify the contract in case of a change of control.
If either party experiences a change of control, they must notify the other party within [X] days. The parties may then negotiate whether to continue or terminate this Agreement, with all obligations to remain until a mutual decision is made.
Automatic termination upon change of control clause
This clause automatically terminates the agreement if there is a change of control, protecting both parties from continuing obligations with a new, unvetted entity.
This Agreement shall automatically terminate in the event of a change of control of either party, without requiring further action. "Change of control" shall mean any transfer or shift in control over [X]% of the ownership interests of either party.
Change of control with approval clause
This clause allows the non-affected party to approve the new entity in the event of a change of control, giving them control over who they do business with.
Upon a change of control of either party, the affected party must obtain prior written approval from the non-affected party before continuing under the terms of this Agreement. The non-affected party’s approval shall not be unreasonably withheld.
Change of control with renegotiation clause
This clause requires the parties to renegotiate the agreement in the event of a change of control, ensuring that the new entity aligns with both parties' interests.
In the event of a change of control, both parties shall engage in good faith negotiations to amend the terms of this Agreement. If no agreement is reached within [X] days, either party may terminate the Agreement without liability.
Change of control with right of first refusal clause
This clause gives one party the first right to purchase the interest of the other party in the event of a change of control.
If there is a change of control of either party, the other party shall have a right of first refusal to acquire the interest in the party undergoing the change of control, on terms that are mutually agreed upon by both parties.
Permitted change of control clause
This variation permits changes of control under certain conditions, without requiring the approval of the other party, as long as specified conditions are met.
A change of control of either party shall be permitted without the consent of the other party, provided that the new controlling entity meets the eligibility criteria set forth in this Agreement. The new entity shall assume all obligations of the Agreement.
Change of control with dispute resolution clause
This clause provides a pathway for dispute resolution if a change of control results in disagreements over the continuation of the contract.
In the event of a change of control, the affected party and the non-affected party shall first attempt to resolve any disputes through mediation. If unresolved, the dispute will be subject to binding arbitration under the rules of [Arbitration Institution].
Change of control with indemnification clause
This clause provides indemnification in the event of a change of control, protecting both parties from any unforeseen liabilities arising from the new controlling entity.
If a change of control occurs, the party undergoing the change of control agrees to indemnify and hold harmless the other party against any claims, damages, or losses arising from such change, including the performance of the new controlling entity under this Agreement.
Immediate termination upon change of control clause
This clause immediately terminates the agreement upon any change of control, ensuring that neither party is tied to a new, potentially incompatible entity.
This Agreement shall automatically terminate without notice upon a change of control of either party. The termination shall be without liability or further obligation to either party.
Change of control with escalation clause
This clause triggers an escalation in the terms of the agreement, such as increased payment or stricter conditions, if a change of control occurs.
In the event of a change of control of either party, the terms of this Agreement shall automatically escalate, with a [X]% increase in the [payment/fee] rate and any other adjustments necessary to reflect the new entity's capabilities and financial position.
Change of control with termination for convenience clause
This clause allows either party to terminate the agreement for convenience in the event of a change of control, without needing to provide a reason.
Upon a change of control, either party may terminate this Agreement for convenience with [X] days' written notice. There will be no penalties or liability for such termination.
Right to substitute clause upon change of control
This clause allows a party to substitute its obligations to another entity in the event of a change of control, without terminating the agreement.
In the event of a change of control of either party, the affected party shall have the right to assign its obligations under this Agreement to a subsidiary or affiliate of the new controlling entity, subject to the non-affected party’s approval.
Conditional change of control clause
This variation requires specific conditions to be met before a change of control can trigger the termination or renegotiation of the agreement.
A change of control shall only result in termination or renegotiation of this Agreement if the new controlling entity fails to meet specific financial or operational criteria set forth in an appendix to this Agreement.
Change of control with notice requirement clause
This clause mandates that the party undergoing a change of control must notify the other party within a specified time, providing transparency and allowing the non-affected party to assess the situation.
In the event of a change of control of either party, the affected party shall notify the other party in writing within [X] days of such change. Failure to provide timely notice shall entitle the non-affected party to terminate this Agreement.
Change of control with renegotiation and renewal clause
This variation allows both parties to renegotiate and possibly renew the terms of the agreement following a change of control.
Upon a change of control, the parties agree to enter into renegotiation discussions to amend the terms of this Agreement. If the terms are not renegotiated within [X] days, either party may opt to terminate the Agreement.
Change of control with no impact on rights clause
This clause ensures that a change of control does not affect the parties' rights or obligations, regardless of the shift in ownership or control.
A change of control of either party shall not affect the rights, obligations, or liabilities under this Agreement. The Agreement shall remain in full force and effect, and all rights and obligations shall continue without modification.
Change of control with specific jurisdiction clause
This clause specifies that a change of control must align with specific jurisdictional requirements to avoid potential legal conflicts.
Any change of control of either party must comply with the jurisdictional requirements of [State/Country], and any transfer or sale of control shall be deemed void if it does not adhere to such laws.
Change of control with adjustment of compensation clause
This clause adjusts the compensation terms in the event of a change of control to reflect the new party's financial standing or capabilities.
Upon a change of control of either party, the compensation terms outlined in this Agreement shall be adjusted to reflect the new controlling entity's financial position, subject to mutual agreement by both parties.
Change of control with disclosure clause
This clause requires the affected party to disclose certain details about the new controlling entity before the Agreement can continue.
In the event of a change of control, the affected party must provide full disclosure of the new controlling entity, including financial standing, leadership, and other relevant information to the non-affected party for review and approval.
Change of control with automatic extension clause
This clause provides for the automatic extension of the agreement if a change of control occurs, assuming the new party meets predefined conditions.
In the event of a change of control, this Agreement shall be automatically extended for an additional term of [X] years unless the non-affected party provides written notice to terminate within [X] days of the change of control.
Change of control with waiver clause
This clause allows the non-affected party to waive their right to terminate or renegotiate the Agreement despite a change of control.
The non-affected party may, at their discretion, waive their right to terminate or renegotiate this Agreement following a change of control. This waiver must be in writing and executed within [X] days of the change.
Change of control with termination without cause clause
This clause allows either party to terminate the agreement for any reason following a change of control, ensuring flexibility.
Upon a change of control, either party shall have the right to terminate this Agreement for any reason with [X] days' written notice, with no further liability.
Change of control with shareholder approval clause
This clause requires shareholder approval before a change of control can take place, offering additional oversight.
A change of control of either party is subject to approval by the party’s shareholders, and no change of control shall occur without such approval being obtained in accordance with the relevant shareholder agreements.
Change of control with exclusivity clause
This clause restricts the ability of the parties to engage in other contracts upon a change of control, maintaining exclusivity.
In the event of a change of control, the affected party agrees to maintain exclusivity in relation to this Agreement, and shall not enter into similar agreements with competitors without the written consent of the non-affected party.
Change of control with restriction on transfer clause
This clause restricts the transfer of control to parties that do not meet the established criteria, ensuring that only acceptable entities take over the contract.
In the event of a change of control, the transferee must meet the eligibility requirements outlined in this Agreement. If the transferee fails to meet these criteria, the non-affected party may terminate this Agreement with immediate effect.
Change of control with continuing obligations clause
This clause ensures that the obligations under the Agreement continue with the new controlling party, providing continuity in the relationship.
In the event of a change of control of either party, all obligations and responsibilities under this Agreement shall be assumed by the new controlling entity and shall remain in full force and effect.
Change of control with review and audit clause
This clause allows the non-affected party to review the new controlling entity and perform an audit to assess any risks following a change of control.
Upon a change of control, the non-affected party shall have the right to conduct a review and audit of the new controlling entity’s financial and operational standing, to ensure that no undue risks are presented. If the audit reveals significant risks, the non-affected party may terminate this Agreement.
Change of control with financial reporting requirement clause
This clause requires the affected party to provide financial reports after a change of control, offering transparency for the other party.
Following a change of control, the affected party must provide the non-affected party with detailed financial reports of the new controlling entity within [X] days. Failure to provide such reports will result in the right to terminate this Agreement.
Change of control with step-in rights clause
This clause grants the non-affected party the right to step in and take control of certain aspects of the Agreement if a change of control occurs.
In the event of a change of control, the non-affected party shall have the right to step in and assume control of the execution of certain provisions of this Agreement, including [specific duties], until the new controlling entity is able to assume such responsibilities.
Change of control with limitation on scope clause
This clause limits the scope of the Agreement post-change of control to ensure that only certain aspects of the contract are impacted.
In the event of a change of control, the scope of this Agreement shall be limited to [specific provisions] unless otherwise agreed in writing by both parties. All other provisions shall remain unchanged.
Change of control with confidentiality clause
This clause ensures that confidentiality is maintained in the event of a change of control, preventing the unauthorized disclosure of sensitive information.
Upon a change of control, the new controlling entity agrees to uphold all confidentiality obligations set forth in this Agreement. The non-affected party shall have the right to review and approve the new entity’s handling of confidential information.
Change of control with restriction on subsequent transfers clause
This clause restricts further changes of control for a specified period after an initial change of control, providing stability to the parties involved.
After a change of control, neither party shall transfer control again for a period of [X] years without the prior written consent of the other party. Any violation of this restriction shall allow the non-affected party to terminate the Agreement.
Change of control with liability cap clause
This clause limits the liability of the affected party following a change of control, ensuring that the non-affected party does not face excessive exposure.
Following a change of control, the liability of the affected party for any breach of this Agreement shall be capped at [X]% of the total contract value, regardless of the nature of the breach.
Change of control with contract renewal option clause
This clause provides the non-affected party the option to renew or terminate the contract after a change of control.
If a change of control occurs, the non-affected party shall have the right to either renew or terminate this Agreement. If the non-affected party opts to renew, the terms of the Agreement may be renegotiated to reflect the new controlling entity.
Change of control with alternative dispute resolution clause
This clause specifies an alternative dispute resolution process in the event of disagreements after a change of control.
In the event of a change of control and subsequent disagreement regarding the continuation of this Agreement, the parties agree to resolve disputes through [mediation/arbitration] under the rules of [Arbitration Institution], rather than through litigation.
Change of control with jurisdiction shift clause
This clause allows the jurisdiction governing the contract to shift following a change of control, based on the location of the new controlling entity.
Upon a change of control, the governing law and jurisdiction of this Agreement shall shift to [New Jurisdiction], where the new controlling entity is located, unless otherwise agreed in writing by both parties.
Change of control with non-compete clause
This clause includes a non-compete provision that prevents the affected party from engaging in similar agreements following a change of control.
In the event of a change of control, the new controlling entity shall be bound by a non-compete clause, preventing it from entering into similar contracts with competitors of the non-affected party for a period of [X] years.
Change of control with exit strategy clause
This clause provides an exit strategy for the non-affected party, should the new controlling entity no longer align with the original terms.
Following a change of control, the non-affected party may exit this Agreement with [X] days' written notice if the new controlling entity’s values or practices do not align with those of the original agreement.
Change of control with modification of terms clause
This clause modifies certain terms of the Agreement after a change of control to reflect the new situation or risk profile.
In the event of a change of control, the terms of this Agreement may be modified by mutual agreement to reflect the new risk profile, business priorities, or operational conditions of the new controlling entity.
Change of control with consent to assign clause
This clause requires the consent of the non-affected party before the rights and obligations can be assigned to the new controlling entity.
In the event of a change of control, the rights and obligations of the affected party under this Agreement may not be assigned to the new controlling entity without the prior written consent of the non-affected party.
Change of control with notice period clause
This clause requires the affected party to notify the non-affected party in advance of a change of control, giving them time to decide whether to terminate or amend the agreement.
In the event of a change of control, the affected party must provide the non-affected party with written notice at least [X] days before the change occurs. The non-affected party may then decide whether to terminate or amend the Agreement.
Change of control with renegotiation trigger clause
Following a change of control, this clause allows either party to request renegotiations of the agreement, with a clear timeline for discussions and termination rights if no agreement is reached.
If a change of control occurs, either party may request a renegotiation of the Agreement. Both parties shall enter into good faith negotiations to amend the terms, and if no agreement is reached within [X] days, either party may terminate the Agreement.
Change of control with restriction on certain activities clause
The new controlling entity is restricted from competing with the non-affected party for a specified period following a change of control.
Following a change of control, the new controlling entity is prohibited from engaging in activities that directly compete with the non-affected party for a period of [X] years.
Change of control with performance bond clause
This clause requires the affected party to provide a performance bond to guarantee the fulfillment of the new entity’s obligations following a change of control.
Upon a change of control, the affected party must provide a performance bond to the non-affected party to ensure that the new controlling entity fulfills all obligations under this Agreement.
Change of control with warranty clause
The affected party warrants that the new controlling entity will comply with the terms of the agreement, taking on all liabilities.
In the event of a change of control, the affected party warrants that the new controlling entity will comply with all terms of this Agreement and take on all existing liabilities.
Change of control with termination fee clause
A termination fee may be triggered by a change of control, compensating the non-affected party if they choose to terminate the agreement.
A change of control may trigger a termination fee payable by the affected party to the non-affected party if the non-affected party chooses to terminate the Agreement.
Change of control with automatic renewal clause
In the event of a change of control, the agreement automatically renews unless the non-affected party gives notice of termination.
In the event of a change of control, this Agreement shall automatically renew for an additional term of [X] years unless the non-affected party provides written notice of termination within [X] days of the change of control.
Change of control with confidentiality agreement clause
This clause requires the new controlling entity to sign a confidentiality agreement, ensuring the protection of proprietary information.
Upon a change of control, the new controlling entity agrees to sign a confidentiality agreement to uphold the terms of this Agreement, ensuring that all proprietary information remains protected.
Change of control with assignment rights clause
The affected party must obtain the non-affected party’s prior consent before assigning rights to the new controlling entity.
In the event of a change of control, the affected party must obtain the non-affected party’s prior written consent before assigning its rights or obligations to the new controlling entity.
Change of control with financial evaluation clause
Following a change of control, the non-affected party has the right to assess the financial viability of the new controlling entity to meet the terms of the agreement.
Following a change of control, the non-affected party has the right to request a financial evaluation of the new controlling entity to assess its ability to meet the terms of this Agreement.
Change of control with exclusivity clause
The affected party agrees to maintain exclusivity with the non-affected party, preventing the new controlling entity from entering into competing agreements.
Upon a change of control, the affected party agrees to maintain exclusivity with the non-affected party for a period of [X] years, preventing the new controlling entity from entering into competing agreements.
Change of control with indemnity clause
The affected party indemnifies the non-affected party for any losses resulting from the change of control.
The affected party shall indemnify the non-affected party against any losses, damages, or liabilities arising from a change of control, including those related to the performance of the new controlling entity.
Change of control with no termination right clause
This clause ensures that a change of control does not grant the non-affected party the right to terminate the agreement, and the agreement continues as originally structured.
A change of control of either party shall not give the non-affected party the right to terminate this Agreement. The Agreement will continue as if no change of control occurred.
Change of control with negotiation deadline clause
Both parties agree to renegotiate the agreement within a set period following a change of control, with termination rights if no agreement is reached.
Upon a change of control, both parties agree to complete any renegotiations of the Agreement within [X] days. If no agreement is reached by the deadline, either party may choose to terminate the Agreement.
Change of control with risk mitigation clause
Both parties are required to take steps to mitigate any risks that arise due to a change of control, including addressing potential conflicts.
In the event of a change of control, both parties shall take reasonable steps to mitigate any risks associated with the change, including providing adequate notice and addressing any potential business conflicts.
Change of control with transition period clause
A transition period is provided to allow the non-affected party to adjust to the new controlling entity’s business practices.
Following a change of control, the affected party shall provide a [X] day transition period to allow the non-affected party to assess and adjust to the new controlling entity’s business practices.
Change of control with obligation to continue performance clause
The new controlling entity is required to continue performing the obligations under the agreement without interruption, preserving the agreement’s terms.
Even after a change of control, the new controlling entity is required to continue performing its obligations under this Agreement without interruption or modification, unless otherwise agreed by both parties.
Change of control with approval of successor clause
The non-affected party has the right to approve or reject the new controlling entity, but approval cannot be unreasonably withheld.
Upon a change of control, the non-affected party shall have the right to approve or reject the successor entity as the new controlling party under this Agreement. Approval shall not be unreasonably withheld.
Change of control with early termination clause
This clause allows the non-affected party to terminate the agreement early if the new controlling entity’s business practices conflict with the original agreement.
A change of control entitles the non-affected party to terminate this Agreement early, without penalty, if the new controlling entity’s business practices are incompatible with the original terms.
Change of control with restriction on asset transfer clause
The affected party is restricted from transferring critical assets or intellectual property to the new controlling entity without prior consent.
In the event of a change of control, the affected party shall not transfer any critical assets or intellectual property related to this Agreement to the new controlling entity without prior written consent from the non-affected party.
Change of control with audit right clause
The non-affected party has the right to audit the new controlling entity’s financials and business operations to ensure compliance with the agreement.
Following a change of control, the non-affected party shall have the right to audit the new controlling entity’s financials and business operations to assess its ability to comply with the terms of this Agreement.
Change of control with non-solicitation clause
The new controlling entity agrees not to solicit or hire employees or contractors from the non-affected party for a specified period.
In the event of a change of control, the new controlling entity agrees not to solicit or hire employees or contractors of the non-affected party for a period of [X] years.
Change of control with contract assignment clause
The affected party may assign its rights under the agreement to the new controlling entity, but the non-affected party must consent in writing.
If a change of control occurs, the affected party may assign its rights under this Agreement to the new controlling entity, provided that the non-affected party consents in writing.
Change of control with obligation to maintain terms clause
The new controlling entity is obligated to maintain all terms and conditions of the agreement without modification, unless mutually agreed upon.
Following a change of control, the new controlling entity must adhere to all the terms and conditions set forth in this Agreement, without any modification or amendment, unless otherwise mutually agreed upon.
Change of control with alternative relationship clause
This clause allows for renegotiation of the agreement if the change of control significantly alters the business model or priorities.
If a change of control leads to a significant shift in the affected party’s business model or priorities, the non-affected party may propose an alternative relationship or amendment to the Agreement that better aligns with the new circumstances.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.