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A change of control clause in a contract outlines the implications when one party undergoes a change in ownership or management. This clause is crucial during events like company sales, mergers, or acquisitions. While it may often seem dormant, sophisticated contract drafters pay close attention to it, anticipating that companies may change hands in the future. Ensuring a smooth transition during such changes is vital, prompting careful drafting of these clauses. Change of control clauses typically become relevant during transactions involving the buying or selling of a company.
