Clause guide
Assignment Clause clause: meaning, risks, and what to negotiate
Controls whether a party can transfer the contract or its rights to another company.
What it means
Assignment clauses determine whether your contract can be transferred to someone else without your approval. This becomes especially important if the other company sells its business or outsources the agreement.
Common risks
- • The other party may transfer the contract to a company you never intended to work with.
- • Your rights may be transferred without your consent.
- • Large corporate acquisitions could change the counterparty without warning.
What to check before signing
- • Does the clause require consent before assignment?
- • Are assignments allowed automatically during mergers or acquisitions?
- • Are subcontractors treated as assignments?
Negotiation ideas
- • Require written consent before any assignment.
- • Limit assignment to affiliates or acquisitions only.
- • Allow termination if the contract is assigned to a competitor.
Example clause
“Neither party may assign or transfer this Agreement without the prior written consent of the other party, except in connection with a merger or sale of substantially all assets.”
Frequently asked questions
What does assignment mean in a contract?
Assignment means transferring the contract or its rights and obligations to another party.
Related clauses
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