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Change of Control Contract Terms: Accounting for Ownership Changes of a Counterparty, Avoiding Unintended Consequences

Mitigating Foreseeable Risks, Ensuring Agreement Does Not Devolve Into a Disadvantageous Relationship Between the Parties

Recording of a 90-minute CLE video webinar with Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Conducted on Tuesday, April 9, 2024

Recorded event now available

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This CLE webinar will discuss change of control clauses in commercial contracts, which are often overlooked but important provisions that allow a party to determine if and how they would like to continue to do business in the event of a change of ownership, change of management, or change in assets of the other party. The panel will review how many boilerplate change of control terms fail to adequately address the contracting parties' concerns and how these terms should be strategically tailored to correspond with specific triggering events identified by the parties as problematic to their ongoing contractual relationship.


Companies are bought, sold, and merged all of the time, but contracts are often silent as to the impact that such a change should or will have on an existing contract.

Many contracts contain an anti-assignment clause, which prohibits the parties from assigning their rights or obligations under the contract to another party. In addition, contracts should, but often do not, have a "change of control" clause, allowing the parties to have recourse (even termination) if the counterparty to the agreement changes its ownership or structure.

Change of control provisions are not one size fits all. They vary from agreement to agreement based on the needs of the parties and they help to ensure that an agreement does not devolve into a disadvantageous relationship between parties. Because of the significant impact a change of control provision can have on both parties, it is important that these provisions be strategically negotiated and that appropriate diligence is taken to understand any existing provisions before they are triggered.

When drafting change of control provisions, counsel should define the kind of change that their client fears the most. For instance, is it the transfer by a counterparty of a certain percentage of ownership or interest, the sale of all or substantially all of the assets of the counterparty, or a change in the make-up of the governing board? Change of control terms should also define the recourse available to the parties in the event a triggering event occurs, such as termination of the contract, a permission process during which the other side seeks consent to make the change and maintain the contract, or the provision of some form of payment as compensation for the change. Retaining the right to terminate the contract affords the most protection, but whether this is needed really depends on the type of agreement at stake.

Listen as our authoritative panel discusses the importance of change of control clauses in commercial contracts and provides tips, best practices, and sample clauses to consider for various types of agreements.



  1. Overview: what are change in control contract terms and what is their purpose?
  2. How change in control terms differ from anti-assignment clauses
  3. Identifying problematic changes (triggers) that will impact the contract as it stands
  4. Defining change of control in an agreement
  5. Determining the type of control the party requires: obtain consent, provide payment, right to terminate the contract
  6. Include the specific time period a party has to decide what action it wants to take in response to the change of control
  7. Interplay with termination clauses
  8. Key takeaways


The panel will address these and other important considerations:

  • Why are change of control provisions important to commercial contracts?
  • How do change of control provisions differ from anti-assignment clauses?
  • What are some changes of control or triggers that contracting parties should consider when drafting these provisions?
  • What are common rights a contracting party has when a change of control occurs with a counterparty?


Fromm, Andrew
Andrew B. Fromm

Brooks Wilkins Sharkey & Turco

Mr. Fromm specializes in business contracts, litigation, supply chain agreements, negotiations, disputes, warranty and...  |  Read More

Marsalek, John
John Marsalek

Dorsey & Whitney

Mr. Marsalek engages in a general corporate practice with an emphasis on corporate transactions, including private...  |  Read More

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