Change Control Agreement Without Consent
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FAQ
There exists no standard definition of change of control but it does include the following transactions: A transfer of shares of the company; A complete sale of all or a substantial portion of assets of the company; Mergers and Acquisitions.
Also known as change of control. A provision in an agreement giving a party certain rights (such as consent, payment or termination) in connection with a change in ownership or management of the other party to the agreement. Not all change of control provisions are triggered by the same action.
The general rule is that change of control of a corporate entity is not an assignment by operation of law, and therefore does not violate a basic anti-assignment provision.
As a contract exists as a legally binding agreement between interested parties, it can be legally modified after being signed. But this happens only with the agreement of all the parties and by adding an extra section, called a 'rider'.
Summary. Parties normally seek to include provisions in an agreement that allow for either termination or an adjustment of their rights, such as payment, upon a change of structure or ownership of the other party. This is known as a change of control clause.
