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Assignment and Transfer |
Example Clauses
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1. Neither party may assign, directly or indirectly, all or part of
its rights or obligations under this Agreement without the prior written
consent of the other party, which consent shall not be unreasonably withheld
or delayed. 2. Neither party may assign this Agreement without the prior written consent of the other party, except that either party may, without the consent of the other, assign the Agreement to a controlled subsidiary of that party or a purchaser of all or substantially all of that party's assets used in connection with performing this Agreement, provided the assigning party guarantees the performance of and causes the assignee to assume in writing all obligations of the assignor under this Agreement. The rights and obligations of this Agreement shall bind and benefit any successors or assigns of the parties. |
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Commentary: This clause applies to all parties to
the agreement. It prohibits any assignment of the agreement without the prior
written consent of the other parties, but indicates that such consent shall
not be unreasonably withheld. Commentary: This example provides an explicit exception for mergers or reorganization of a party's business. This covers changes in legal form, where for all intents and purposes the party is still the same entity. Such exceptions are common, but the other parties to the agreement should be sure that the entity assuming the obligations can fulfill them as originally contemplated. In this example, the assigning party must guarantee the performance of the assignee, and obtain a written promise from the assignee that it will fulfill the assignor's obligations under the contract. This is probably sufficient if the assigning party continues in business; however, if the assigning party ceases to exist, for example because it is legally merged into another corporation, then additional guarantees may be necessary. Adding a right to terminate an agreement in the event that an automatic assignment results in sub-par performance by an assignee would be one way to assure that an assignment would not be detrimental to the other parties to the agreement. |
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3. No party may assign its rights or obligations under this Agreement without the prior written consent of the other parties, which consent shall not be unreasonably withheld, provided that the [Licensor] may assign this Agreement and its obligations hereunder to any successor to its business by merger or consolidation or to any party acquiring substantially all of the assets of the [Licensor]'s journal business. |
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Commentary: Example 3 offers no assurance by the assignor to the other parties to the agreement that the assignor's obligations will be fulfilled by the assignee. As discussed in Example 2, permitting assignments without prior written approval of the other parties in the event of business reorganizations is acceptable, provided that the assigning party offers concrete guarantees that the contract will be performed in the same way that it would have had there been no assignment. This clause can be revised using the language from Example 2, "provided the assigning party guarantees the performance of and causes the assignee to assume in writing all obligations of the assignor under this Agreement”. |
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4. User may not sublicense, assign or transfer this license or the Licensed Program. Any attempt to sublicense, assign or transfer any of the rights, duties or obligations hereunder is void. |
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Commentary: Limitations on assignment should apply to all parties to the agreement--the licensor and the licensee. Accordingly, Example 4 is unacceptable, since it only prohibits assignments and transfers by the licensee, not the licensor. |
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