Change-of-Control Clause

D03 - Vendor Contract Quality

Definition

A contract provision that grants a vendor rights, including the right to require consent, alter terms, or terminate the agreement when the contracting company is acquired, undergoes a merger, or changes ownership.

A change-of-control clause that requires vendor consent to assignment means that in an acquisition, the acquirer's legal team must renegotiate the contract before closing under time pressure, without leverage. Companies discover this clause at the worst possible moment.

Indicators

• You don't know which of your top vendor contracts require vendor consent on a change of control.
• Your vendor contracts were last reviewed at signing, not audited since.
• No exit readiness assessment has ever included a vendor contract review.

Quick Win

• Pull your top vendor contract.
• Search for "change of control" or "assignment."
• If it requires the vendor's consent for you to be acquired, flag it now, not during a transaction.

Assess

• Take the HQ Score Assessment

Apply

• The Vendor Contract Audit Workbook
• The Vendor Contract Audit Checklist

Related

• Exit Readiness
• Data Portability Clause
• Switching Cost
• Vendor Register
• Data Room