Why is a change of control clause needed if there is an assignment clause?

A share sale changes who controls the company without transferring the contract, so an assignment clause alone may not be triggered.

Should intra-group reorganisations trigger the clause?

Usually not. They are commonly carved out, since ultimate control and counterparty risk do not actually change.

What percentage threshold typically defines "control"?

Most clauses use 50% of voting rights as the control threshold, though some sensitive contracts set it lower at 30% or 25% to catch earlier shifts in influence.

How long does a party have to exercise its rights after a change of control?

Contracts typically allow 30 to 90 days from notice or actual knowledge of the change. Letting this window lapse without acting may be treated as acceptance of the new controller.

Does a change of control clause survive termination of the contract?

No. Once the contract ends, the clause ends with it. Its relevance is during the term: protecting the party from being bound to an unwanted new counterparty for the remaining duration.

Change of Control Clause

Lets a party react (by consent, renegotiation or termination) if its counterparty is taken over.

What it is

A change of control clause is triggered when ownership or control of a contracting party changes, for example by a takeover, merger, or sale of a majority stake. It gives the other party defined rights, such as consent, notification, renegotiation, or a right to terminate.

Why it matters

You chose your counterparty for who they are; a takeover may put a competitor or a riskier owner behind the contract. A change of control clause protects against being bound to an unwanted new party, especially where assignment alone would not be triggered.

How to apply it

Define "control" precisely: voting rights, board control, or a percentage threshold.
Choose the consequence: notice, prior consent, renegotiation, or termination.
Carve out intra-group reorganisations that do not change ultimate control.
Coordinate the clause with the assignment and confidentiality provisions.

Sample wording

If a person acquires control of a party (directly or indirectly holding more than fifty percent of its voting rights), the other party may terminate this agreement on thirty (30) days' written notice.

Negotiation tips

• The target should narrow "control" and exclude internal restructurings to avoid an unintended trigger.
• The protected party should secure termination, not merely a duty to notify.

Common pitfalls

• Defining control too loosely, so an ordinary group reorganisation triggers the clause.
• Relying on the assignment clause alone, which a share sale may not trigger.

Legal references

BW 6:248 Reasonableness and fairness Dutch law

Unless marked otherwise, references are to Dutch law (Burgerlijk Wetboek, the Dutch Civil Code); EU instruments such as the GDPR apply across the EU. This is general information, not legal advice. Other jurisdictions treat these concepts differently. Verify the current text and your situation with a qualified lawyer.

Frequently asked questions

Common questions about this clause.