Categories: M&A and Financing
I wonder if anyone has experience of what I expect is a common issue. Anyway, several of my ongoing contracts with clients include 'Assignment' clauses, which state that the client needs to provide written permission that the contract is still valid should I reassign the contract to a third-party. So the corollary being there is an apparent issue should I wish to exit and sell the business, and contracts, to a buyer as the contracts (and company purchase) might be at risk should the client not be happy with the reassignment.
I'm expecting that this is a very common issue with acquisitions as the Assignment clause seems fairly ubiquitous. Has anyone any advice/experience in this matter? What's the best approach to handling the issue and what is the typical way round the issue?
I may have chance to renegotiate the contracts at a later date and would be keen to have the clauses removed but again it's somewhat awkward as it's difficult to say you want the clause removed as you want to sell-up. So again any advice on that aspect would be welcome?
Thanks in advance.