What it is
An assignment clause governs whether either party can transfer their rights and obligations under the contract to a third party. It commonly distinguishes between assignment to an affiliate, in a merger or acquisition, or to an unrelated third party.
Why it matters
Without restrictions, your counterparty can sell the contract — and your data, IP licenses, or service obligations — to anyone. An anti-assignment clause keeps you in control of who you're actually contracting with.
Sample clause language
"Neither party may assign this Agreement without the other party's prior written consent, except that either party may assign to an affiliate or successor in interest in connection with a merger, acquisition, or sale of substantially all assets."
What it really means: Reasonable. Both sides need consent except for normal corporate events. Strike the M&A carve-out only if your contract is highly personal (specific person delivering services).
Red flags
- Other side can assign freely; you can't
- No notice required on assignment
- Assignment to competitors permitted without consent
Fair / acceptable
- Mutual consent required
- Notice on assignment
- Carve-outs limited to normal M&A events
How to negotiate
- Make the consent requirement mutual
- Add a termination right if assigned to a direct competitor
Frequently asked questions
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Not legal advice. For informational purposes only.