Change of Control
A provision in a contract that is triggered when ownership or control of one of the parties transfers to a new entity.
Change-of-control provisions appear throughout commercial agreements and are particularly critical in M&A transactions. In customer and vendor contracts, a change of control may give the counterparty the right to terminate the agreement, require consent before the transaction can close, or adjust pricing terms. In employment agreements, a change of control often triggers severance and acceleration of equity vesting.
Identifying all change-of-control provisions across a target company's contracts is one of the most time-sensitive tasks in M&A due diligence. Missing a key customer contract with a termination right triggered by the acquisition can fundamentally affect deal value — and the buyer may not discover the risk until after closing. AI document intelligence that extracts change-of-control language across an entire data room in minutes rather than days is transformative for deal teams working under tight exclusivity windows.
Related Terms
More legal Terms
Non-Disclosure Agreement (NDA)
A legally binding contract that establishes confidentiality obligations between parties sharing sensitive information.
Service Level Agreement (SLA)
A contract defining the expected performance standards, uptime guarantees, and remedies for a service provider.
Indemnification
A contractual obligation where one party agrees to compensate the other for specified losses or damages.
Force Majeure
A contract clause that frees parties from obligations when extraordinary events beyond their control prevent performance.
Arbitration
A private dispute resolution process where an independent arbitrator makes a binding decision instead of a court.
Contract
A legally enforceable agreement between two or more parties that creates mutual obligations.
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