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A change of control clause in a contract specifies the procedures and implications when a party experiences a change in ownership or management. This clause is crucial during deals like sales, mergers, or acquisitions. It often remains inactive until triggered, but experienced contract drafters pay close attention to it, knowing that ownership changes can occur in the future. Properly drafted change of control clauses facilitate smooth transitions when companies change hands. They frequently arise in situations involving buying or selling a company, underscoring their importance in contract negotiations, despite being categorized as boilerplate language.
