Assignment Clauses

September 28, 2022

by a searcher in Florida, USA

Does anyone have experience with obtaining customer approvals for a change in ownership prior to a sale? Almost all POs for a company we are evaluating acquiring require customer approval despite a PO only business v. LTAs. Trying to evaluate if we only need to get approvals from active POs or a select number from X period such as all POs going back 3 years. Trying to minimize this burden as much as possible.

Also, anyone know what specific language goes into the letter to the customer? Is it more of a notice rather than a request for their approval (which could take forever)?

Reply by a searcher
from University of California, Santa Barbara in Los Angeles, CA, USA

I have experienced this. Usually we make the deal a sign and close where the closing condition is the customer consents. However it’s important to read the customer contract closely to see if it’s notice or approval. If you want to chat on it you can email me at redacted

Reply by a professional
from Dartmouth College in Los Angeles, CA, USA

Typically you try and figure out which ones are absolutely crucial to the business and insist on obtaining those before closing, you may take some risk on the rest. But the agreements themselves will tell you whether notice or consent is required.

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