The offer covers the whole business. A third of the contracts get a vote.

Assignment and change-of-control clauses sit unread for years, then quietly decide what a business is worth in the fortnight before it sells.

By Steve 5 min read
Abstract bridge artwork for The offer covers the whole business. A third of the contracts get a vote.

A business goes to market with a clean revenue line: eighty-odd customers, most on contracts, good renewal history. The buyer is interested. Then legal diligence produces a schedule of the contracts and a column nobody at the seller’s end has looked at in years: assignment and change of control. Some contracts require the customer to be notified. Some require the customer’s written consent. A few give the customer a right to terminate on a change of ownership, no reason needed. Nothing has changed about the business. Its revenue, margin and…

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