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A change of control clause in a contract specifies the procedures and implications when one party undergoes a change in ownership or management. This clause is crucial in scenarios like company sales, mergers, or acquisitions. Although it may seem like a standard provision, careful drafting is essential, especially because ownership changes are common in business. Parties experienced in contracts pay particular attention to these clauses to ensure a smooth transition during ownership changes, highlighting their importance beyond being mere boilerplate text. Such clauses often arise in contexts where a company is being bought or sold.
