Pactora Clause Guide
Assignment and Change of Control
These clauses govern who you can end up contracting with if either business is sold or restructured, and whether a funding round or acquisition could trigger the other side's exit rights.
This guide was written by Sneha Ganapavarapu, a qualified lawyer with experience in commercial contracts across technology, IP, and energy sectors. All legal sources are linked. This is general legal information, not legal advice. Always consult a qualified solicitor before signing any contract that matters to your business.
Plain English
What it is
An assignment clause controls whether either party can transfer its rights and obligations under the contract to a third party — for example, to a new owner if the company is acquired.
A change of control clause is related but distinct: it is triggered not by a formal assignment, but by a change in who controls the company — typically a sale of shares, an acquisition, or a merger. A change of control clause can give the other party the right to terminate if your business is bought by someone they did not sign a contract with.
Both clauses matter if you are building a business you intend to grow or sell.
For UK freelancers & small businesses
What reasonable looks like
Assignment within the same corporate group permitted without consent.
Assignment to a third party permitted subject to consent not to be unreasonably withheld or delayed.
Change of control giving a 30 to 60-day notice right, not automatic termination.
Change of control defined narrowly — typically a sale of more than 50% of shares to a single acquirer.
Standard funding rounds, restructurings, and IPOs expressly carved out from the definition of change of control.
Watch out for
Red flags
Change of control defined to include any transfer of more than 25% or 30% of shares — this can be triggered by a seed or Series A funding round.
Automatic termination without notice on change of control rather than a right to terminate.
No carve-out for intra-group transfers or routine restructurings.
Assignment restrictions that prevent even a sale of the business without the other party's consent.
The other side has a unilateral right to assign to anyone, but you need their consent to assign to anyone.
Change of control giving an immediate right to demand accelerated payment or enforce penalties.
England & Wales
Market standard UK position
Intra-group assignment without consent.
Third-party assignment with consent not unreasonably withheld.
Change of control defined as acquisition of 50%+ of shares.
Notice right on change of control — not automatic termination.
Routine funding rounds and IPOs excluded from the definition.
Legal advice triggers
Ask your lawyer if…
Your company has or is seeking external investment and the definition of change of control captures share issuances.
The clause provides for automatic termination rather than a notice right.
The assignment restriction prevents an ordinary business sale without the other side's consent.
The other party has an unrestricted right to assign while yours is restricted.
References
Legal sources
Tolhurst v Associated Portland Cement Manufacturers Ltd [1902] 2 KB 660 — foundational authority on contractual assignment and what requires consent.
Linden Gardens Trust Ltd v Lenesta Sludge Disposals Ltd [1994] 1 AC 85 — House of Lords authority on restrictions on assignment and their enforceability.
Companies Act 2006 — governs share transfers and takeovers; relevant to what triggers a change of control under most definitions.
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Further reading
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