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A change of control clause in a contract outlines what occurs when one party undergoes a change in ownership or management. This clause is crucial during events such as a company sale, merger, or acquisition. While it may seem passive at first, it becomes significant when companies change hands, as it ensures a smooth transition. Experienced contract drafters pay careful attention to these clauses, recognizing their future relevance despite being considered boilerplate. Change control clauses primarily arise in contexts where ownership changes, such as buying or selling a company.
