Changes in location or names: Overview, definition, and example
What is changes in location or names?
Changes in location or names refers to a contractual provision that requires a party—often the borrower or counterparty—to notify the other party if it changes its legal name, place of business, or organizational location. This clause is common in loan agreements, security agreements, and commercial contracts where accurate identification and recordkeeping are essential for legal rights, especially when liens, notices, or filings (like UCC statements) are involved.
Why is changes in location or names important?
This clause is important because changes to a party’s legal name or location can affect the validity of legal filings, lien perfection, service of notices, and contract enforcement. For example, a creditor’s UCC financing statement might become ineffective if the borrower moves to another state or changes its legal name without notice. The clause ensures ongoing transparency and allows the other party to update records, filings, or notices to maintain legal protections.
Understanding changes in location or names through an example
A borrower incorporated in Delaware operates out of New York. It changes its headquarters to California and also changes its legal name during a merger. Under the agreement, the borrower is required to give 30 days' prior written notice to the lender. This allows the lender to amend its UCC-1 financing statement to reflect the new state and name, ensuring its security interest remains perfected.
Example of how a changes in location or names clause may appear in a contract
Here’s how a changes in location or names clause may appear in a loan or security agreement:
"The Borrower shall not change its legal name, jurisdiction of organization, or principal place of business without giving the Lender at least thirty (30) days’ prior written notice and taking all steps necessary to maintain the Lender’s security interest in the Collateral."
Conclusion
A changes in location or names clause helps maintain the integrity of legal and financial rights throughout the life of an agreement. It ensures the parties stay informed of key changes that could affect notices, filings, or enforcement. Including this provision is especially critical in secured transactions, where proper documentation and public notice are essential for protecting interests.
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.