Transferability clause: Copy, customize, and use instantly
Introduction
A transferability clause defines whether and how rights, obligations, or interests under a contract may be transferred to another party. It helps establish clear rules regarding assignments, restrictions, and approvals, ensuring contractual stability and compliance with regulatory or business requirements. Transferability clauses are commonly used in commercial contracts, shareholder agreements, and intellectual property agreements.
Below are templates for transferability clauses tailored to different scenarios. Copy, customize, and insert them into your agreement.
Standard transferability clause
This clause prohibits transfers without prior consent.
Neither Party may transfer, assign, or otherwise convey its rights or obligations under this Agreement without the prior written consent of the other Party. Any attempted transfer in violation of this provision shall be null and void.
Transferability clause with automatic transfer upon merger or acquisition
This version allows for automatic transfer in case of a corporate restructuring.
Notwithstanding the foregoing, either Party may transfer its rights and obligations under this Agreement in connection with a merger, acquisition, or corporate reorganization, provided that the successor entity assumes all obligations under this Agreement.
Transferability clause with right of first refusal
This clause requires the non-transferring party to have the first opportunity to acquire the transferred rights.
If either Party intends to transfer its rights under this Agreement to a third party, it must first offer such rights to the other Party on the same terms. The non-transferring Party shall have [number] days to accept or decline the offer before the transfer may proceed.
Transferability clause with financial capability review
This version requires the transferee to meet financial criteria before approval.
Any transfer under this Agreement shall be subject to a financial capability review by the non-transferring Party. The proposed transferee must demonstrate sufficient financial resources to fulfill all obligations under this Agreement.
Transferability clause with prohibition on transfers to competitors
This clause prevents a party from transferring rights or obligations to a direct competitor.
Neither Party may transfer, assign, or otherwise convey its rights or obligations under this Agreement to any direct competitor of the other Party without the prior written consent of the non-transferring Party. Any unauthorized transfer to a competitor shall be void.
Transferability clause with pre-approval requirement for material transfers
This version requires pre-approval for transfers involving significant contractual obligations.
Any transfer involving more than [percentage]% of the total value of this Agreement, or a transfer that materially affects the rights or obligations of either Party, shall require the prior written approval of the non-transferring Party.
Transferability clause with continued liability for the original party
This clause ensures that the original party remains liable even after transferring its rights.
Any transfer under this Agreement shall not relieve the transferring Party of its obligations unless explicitly agreed upon in writing by the non-transferring Party. The transferring Party shall remain jointly and severally liable with the transferee for all obligations under this Agreement.
Transferability clause with escrow requirement for pending transfers
This version requires funds or assets to be held in escrow before a transfer is finalized.
If a transfer is pending approval, the transferring Party shall place all related contractual obligations and payments in escrow until the non-transferring Party approves or denies the transfer. No transfer shall take effect until escrow conditions are met.
Transferability clause with step-in rights for the non-transferring party
This clause allows the non-transferring party to assume transferred obligations if necessary.
In the event that the transferring Party assigns its rights under this Agreement without obtaining the required approval, the non-transferring Party shall have the right to step in and assume any obligations or revoke the transfer at its discretion.
Transferability clause with right to terminate upon unauthorized transfer
This version allows termination of the contract if a party transfers its rights without approval.
If either Party transfers its rights or obligations under this Agreement without obtaining the necessary consent, the non-transferring Party shall have the right to terminate this Agreement immediately upon written notice.
Transferability clause with time restriction on future transfers
This clause sets a specific time period before transfers are allowed.
Neither Party may transfer its rights or obligations under this Agreement for a period of [number] months from the Effective Date. Any attempted transfer during this period shall be deemed null and void.
Transferability clause with mandatory successor compliance
This version ensures that the transferee must comply with all original terms of the agreement.
Any transferee of rights under this Agreement must expressly agree in writing to be bound by all terms and conditions of this Agreement. Failure to obtain such an agreement shall render the transfer invalid.
Transferability clause with indemnification for improper transfers
This clause requires the transferring party to indemnify the non-transferring party for any damages.
If a Party transfers its rights or obligations under this Agreement in violation of this clause, it shall indemnify, defend, and hold harmless the non-transferring Party from any losses, damages, or liabilities resulting from such unauthorized transfer.
Transferability clause with mandatory dispute resolution before transfer
This version requires parties to resolve any disputes before transferring contractual rights.
No transfer of rights or obligations under this Agreement shall be permitted while the transferring Party is engaged in active litigation, arbitration, or any other dispute resolution process relating to this Agreement.
Transferability clause with liquidated damages for unauthorized transfer
This clause imposes a pre-determined financial penalty for violating transfer restrictions.
If either Party transfers its rights under this Agreement without prior consent, the non-transferring Party shall be entitled to liquidated damages in the amount of [specified amount], in addition to any other remedies available under this Agreement.
Transferability clause with exception for corporate restructuring
This version allows transfers within a corporate group without approval.
Notwithstanding any other provision in this Agreement, a Party may transfer its rights and obligations to an affiliate or subsidiary as part of a corporate restructuring, provided that such entity assumes all responsibilities under this Agreement.
Transferability clause with revocation rights for fraud or misrepresentation
This clause allows revocation of a transfer if it was obtained fraudulently.
If a transfer of rights under this Agreement is made based on fraudulent misrepresentation or material omission, the non-transferring Party shall have the right to revoke the transfer and seek damages.
Transferability clause with regulatory approval prerequisite
This version requires regulatory approval before a transfer can take effect.
No transfer under this Agreement shall be effective unless the transferring Party obtains all necessary regulatory approvals and provides proof of such approval to the non-transferring Party.
Transferability clause with requirement for continued financial health
This clause ensures that the transferee meets financial stability requirements.
Any transfer under this Agreement shall be contingent upon the transferee maintaining a financial condition equal to or better than that of the transferring Party, as determined by a financial review conducted by the non-transferring Party.
Transferability clause with automatic suspension upon transfer request
This version temporarily suspends contractual obligations while a transfer request is under review.
Upon submission of a request to transfer rights or obligations under this Agreement, all contractual obligations related to the transfer shall be suspended until approval or rejection is issued by the non-transferring Party.
Transferability clause with assignment of warranties and representations
This clause ensures that warranties and representations extend to the transferee.
Any transfer of rights under this Agreement shall include the assignment of all warranties, representations, and indemnities, such that the transferee is bound by the same terms as the original contracting Party.
Transferability clause with reporting obligations for transferred contracts
This version requires the transferring party to report on all transfers.
The transferring Party shall provide a written report to the non-transferring Party detailing the nature, scope, and impact of any transfer within [number] days of the effective date of such transfer.
Transferability clause with ranking priority for security interests
This clause ensures that any security interests held by a party remain unaffected by a transfer.
Any transfer of rights or obligations under this Agreement shall be subject to any existing security interests, liens, or encumbrances, and the transferee must acknowledge and accept such priority.
Transferability clause with right to audit transferred agreements
This version allows the non-transferring party to audit transferred obligations.
If a transfer is approved, the non-transferring Party shall have the right to audit the transferee’s compliance with all obligations under this Agreement within [number] days of the transfer becoming effective.
Transferability clause with prohibition on serial transfers
This clause prevents multiple consecutive transfers of rights under the contract.
No rights under this Agreement may be transferred more than once without the prior written consent of the original non-transferring Party. Any unauthorized serial transfers shall be deemed void.
Transferability clause with alternative dispute resolution for transfer disputes
This version requires mediation or arbitration if the parties dispute the validity of a transfer.
If a dispute arises concerning the validity or impact of a transfer under this Agreement, the Parties agree to first submit the matter to mediation. If mediation is unsuccessful, the dispute shall be resolved through binding arbitration in accordance with the rules of [arbitration body].
Transferability clause with notification period before transfer takes effect
This clause requires advance notice before a transfer can be finalized.
The transferring Party must provide written notice to the non-transferring Party at least [number] days prior to the intended transfer date, detailing the terms and conditions of the proposed transfer.
Transferability clause with step-in rights for financial distress
This clause allows the non-transferring party to assume control if the transferring party is in financial trouble.
If the transferring Party becomes subject to insolvency, bankruptcy, or financial distress proceedings, the non-transferring Party shall have the right to assume control over any obligations or to approve a designated transferee.
Transferability clause with rolling approval review for high-value transfers
This version requires periodic reviews of certain transfers instead of one-time approvals.
Any transfer of rights or obligations under this Agreement exceeding [amount] shall be subject to periodic review every [number] months to ensure ongoing compliance with financial and operational requirements.
Transferability clause with waiver of transfer restrictions under emergency circumstances
This clause allows for emergency transfers under specific conditions.
If a Party is unable to fulfill its obligations due to a force majeure event, emergency, or regulatory action, transfer restrictions under this Agreement shall be waived, provided that the transferee meets all applicable conditions for assuming such obligations.
Transferability clause with requirement for independent third-party evaluation
This version requires an independent review of the transfer before approval.
Any transfer under this Agreement shall be subject to evaluation by an independent third-party consultant or auditor, who shall assess the financial and operational stability of the proposed transferee before the transfer takes effect.
Transferability clause with retention of defined intellectual property rights
This clause ensures that a transfer does not alter IP ownership.
Any transfer of rights under this Agreement shall not alter, affect, or result in the transfer of any intellectual property rights, patents, or trademarks associated with this Agreement unless explicitly agreed in writing by both Parties.
Transferability clause with forced buyout right for non-transferring party
This version allows the non-transferring party to buy out transferred rights under certain conditions.
If either Party intends to transfer its rights under this Agreement to a third party, the non-transferring Party shall have the right, but not the obligation, to acquire such rights under the same terms before any third-party transfer takes effect.
Transferability clause with automatic voiding of improper transfers
This clause makes unauthorized transfers automatically invalid.
Any transfer made in violation of this Agreement shall be automatically null and void, with all rights and obligations reverting to the original transferring Party.
Transferability clause with mandatory compliance certification
This version requires the transferee to certify compliance before assuming obligations.
Prior to the effective date of any transfer, the transferee must submit a written certification confirming its compliance with all contractual, financial, and regulatory obligations under this Agreement.
Transferability clause with no serial transfers allowed
This clause prevents repeated reassignment of rights under the contract.
No Party may transfer its rights or obligations under this Agreement more than once without the express prior written consent of the non-transferring Party. Any unauthorized serial transfer shall be deemed void.
Transferability clause with alternative dispute resolution before transfer disputes escalate
This version requires mediation before taking legal action.
If a dispute arises regarding a proposed or completed transfer, the Parties agree to first engage in good-faith mediation. If mediation does not resolve the issue, the dispute may proceed to arbitration or litigation as permitted under this Agreement.
Transferability clause with security deposit requirement for high-risk transfers
This clause ensures financial protection in case of a risky transfer.
If a transfer is deemed high-risk based on financial or operational factors, the transferee must post a security deposit equal to [amount] before assuming obligations under this Agreement.
Transferability clause with forced reassignment in case of underperformance
This version allows the non-transferring party to demand reassignment if performance declines.
If the transferee fails to meet contractual performance standards within [number] months of assuming obligations under this Agreement, the non-transferring Party shall have the right to demand reassignment of the transferred rights to an alternative entity.
Transferability clause with post-transfer performance evaluation
This clause ensures that the transferee is monitored for a set period after transfer.
Any transferee assuming rights or obligations under this Agreement shall be subject to a performance evaluation within [number] months of the transfer. If deficiencies are identified, corrective action must be taken within [number] days.
Transferability clause with retention of pre-existing liabilities
This version ensures that prior liabilities remain with the original party.
Any transfer of rights under this Agreement shall not discharge the transferring Party from any liabilities or obligations incurred prior to the effective date of the transfer. The transferring Party shall remain liable for all obligations up to that date.
Transferability clause with suspension of rights pending approval
This clause temporarily halts transfer rights while approval is pending.
Any transfer of rights or obligations under this Agreement shall be suspended until the non-transferring Party provides written approval. The transferring Party shall not take any actions that assume the transfer has been approved until written confirmation is received.
Transferability clause with specific exclusion for government contracts
This version restricts the transfer of government-related contracts.
Notwithstanding any other provisions in this Agreement, rights or obligations arising from government contracts, regulatory licenses, or other state-issued agreements shall not be transferable without prior approval from the relevant government agency.
Transferability clause with restrictions on transferring financial interests
This clause limits the transfer of financial interests separately from operational control.
The Parties shall not transfer financial interests in this Agreement, including profit shares or royalty rights, unless such transfer is accompanied by a corresponding transfer of operational control. Any attempt to transfer financial interests alone shall be deemed void.
Transferability clause with rolling expiration of transfer restrictions
This version gradually relaxes transfer restrictions over time.
Transfer restrictions under this Agreement shall be reduced incrementally over a period of [number] years, with full transferability rights becoming available after [final date].
Transferability clause with carve-out for minority shareholders
This clause allows limited transfers for minority shareholders without affecting the company’s control.
Notwithstanding the general restrictions on transferability, any shareholder holding less than [percentage]% of the total outstanding equity may freely transfer their interest to another existing shareholder without requiring approval from the majority owners.
Transferability clause with mandatory notification to affected stakeholders
This version ensures that stakeholders are informed before a transfer takes place.
The transferring Party shall provide written notice of any proposed transfer to all affected stakeholders, including lenders, suppliers, and employees, at least [number] days prior to finalizing the transfer.
Transferability clause with reversion rights if conditions are not met
This clause allows the transfer to be reversed if conditions are not satisfied.
If the transferee fails to meet all obligations required under this Agreement within [number] days of the transfer, the transferring Party shall have the right to reclaim all transferred rights and obligations without penalty.
Transferability clause with carve-out for equity financing transactions
This version permits transfers in connection with fundraising activities.
The restrictions on transferability under this Agreement shall not apply to transactions involving equity financing, venture capital investments, or public securities offerings, provided that such transactions do not result in a change of control.
Transferability clause with successor approval requirement
This clause requires a designated successor to be pre-approved.
Any transferee assuming obligations under this Agreement must be pre-approved by the non-transferring Party. The non-transferring Party reserves the right to reject a successor entity that does not meet operational, financial, or strategic compatibility standards.
Transferability clause with restriction on transfers outside of specific jurisdictions
This version ensures that transfers only occur within designated regions.
The Parties shall not transfer any rights or obligations under this Agreement to an entity domiciled outside of [jurisdiction] without obtaining prior approval from the non-transferring Party.
Transferability clause with conditional transfer based on regulatory approval
This clause ensures transfers are contingent on regulatory compliance.
Any proposed transfer of rights under this Agreement shall not take effect until all applicable regulatory approvals have been obtained. The transferring Party shall bear all costs associated with securing such approvals.
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.