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Reorganization clause: Copy, customize, and use instantly

Introduction

A reorganization clause outlines the rights and obligations of parties in the event of a corporate restructuring, merger, acquisition, or other reorganization. It provides clarity on how contractual obligations will be handled, whether they transfer to a successor entity, and any conditions that apply. This clause helps businesses manage transitions smoothly and ensures continuity or termination of agreements as needed.

Below are templates for reorganization clauses tailored to different scenarios. Copy, customize, and insert them into your agreement.

Successor entity assumption

This variation ensures that all rights and obligations under the agreement automatically transfer to the successor entity after a reorganization.

In the event of a merger, consolidation, or other corporate reorganization involving either Party, this Agreement shall remain in full force and effect and shall be binding upon and inure to the benefit of the successor entity. The successor entity shall assume all rights and obligations under this Agreement without requiring further action from either Party.

Termination upon reorganization

This variation allows either party to terminate the agreement if the other party undergoes a corporate reorganization.

If either Party undergoes a merger, acquisition, or other corporate reorganization, the other Party shall have the right to terminate this Agreement upon [X] days’ written notice, unless otherwise agreed in writing. Such termination shall not relieve either Party of obligations accrued prior to the effective date of termination.

This variation requires a party to obtain the other party’s consent before proceeding with a reorganization that could impact the agreement.

Neither Party shall transfer or assign its rights or obligations under this Agreement as part of a corporate reorganization, merger, or acquisition without the prior written consent of the other Party, which shall not be unreasonably withheld. Any attempted transfer or assignment without such consent shall be void and of no effect.

Notification and renegotiation

This variation requires a party undergoing a reorganization to notify the other party and renegotiate the terms if necessary.

In the event that either Party undergoes a merger, acquisition, or other corporate reorganization, it shall notify the other Party in writing within [X] days. The Parties shall, in good faith, renegotiate the terms of this Agreement if such reorganization materially affects the rights or obligations of either Party. If the Parties are unable to reach a mutually acceptable amendment, either Party may terminate this Agreement upon [X] days’ notice.

Automatic continuation

This variation ensures the agreement remains unchanged and continues with the reorganized entity.

In the event of a merger, consolidation, or other corporate reorganization involving either Party, this Agreement shall remain in full force and effect, with no requirement for additional approvals or modifications. The reorganized entity shall assume all obligations and rights under this Agreement.

Assignment with restrictions

This variation permits assignment of the agreement after reorganization but places specific restrictions on the assignee.

In the event of a corporate reorganization, merger, or acquisition, this Agreement may be assigned to the successor entity, provided that the successor assumes all obligations herein and maintains financial and operational capabilities substantially similar to those of the original Party. Any deviation from these conditions shall require prior written approval from the non-assigning Party.

Limited assumption of obligations

This variation allows the reorganized entity to assume only specific obligations under the agreement.

If either Party undergoes a reorganization, including but not limited to a merger, acquisition, or restructuring, the successor entity shall assume only those obligations expressly agreed upon in writing by the Parties. All other obligations shall be deemed terminated as of the effective date of the reorganization.

Continuation with renegotiation option

This variation ensures the agreement continues post-reorganization but allows either party to request renegotiation.

Following a corporate reorganization of either Party, this Agreement shall remain in effect. However, the non-reorganizing Party shall have the right to request renegotiation of material terms affected by the reorganization. If the Parties are unable to agree on modifications within [X] days of such request, either Party may terminate this Agreement upon [X] days’ notice.

Termination upon change in ownership

This variation allows termination if a certain percentage of ownership is transferred in a reorganization.

If a reorganization results in a change of control, defined as a transfer of more than [X]% of the equity ownership of either Party, the other Party shall have the right to terminate this Agreement upon [X] days’ written notice. Any outstanding obligations prior to termination shall remain enforceable.

Reorganization without liability transfer

This variation clarifies that liabilities do not transfer to the successor entity unless explicitly stated.

In the event of a corporate reorganization, merger, or acquisition, the successor entity shall not inherit any pre-existing liabilities or obligations under this Agreement unless expressly agreed upon in writing by the Parties.

This variation requires prior written approval before the agreement continues with a reorganized entity.

Neither Party may transfer this Agreement to a successor entity following a reorganization, merger, or acquisition without obtaining prior written consent from the other Party. Any such transfer without consent shall be null and void.

Survival of key provisions

This variation ensures that specific provisions continue even if the agreement terminates due to reorganization.

If this Agreement is terminated due to a corporate reorganization, the provisions of Sections [X, Y, Z] shall survive such termination and remain enforceable.

No implied assumption

This variation clarifies that a reorganization does not automatically transfer obligations unless explicitly stated.

A corporate reorganization, merger, or acquisition shall not, by itself, constitute an assumption of this Agreement. Any assumption must be agreed upon in writing by both Parties.

Continuity with financial reassessment

This variation ensures that the financial stability of the successor entity is assessed before the agreement continues.

If either Party undergoes a reorganization, the non-reorganizing Party may conduct a financial assessment of the successor entity. If the successor fails to meet the financial standards required under this Agreement, the non-reorganizing Party may terminate the Agreement upon [X] days’ notice.

Reorganization triggers performance review

This variation requires a formal review of contract performance upon reorganization.

In the event of a corporate reorganization of either Party, the Parties agree to conduct a formal review of contract performance within [X] days. Based on the results of this review, the Parties may mutually agree to modify or terminate this Agreement.

Automatic termination unless assumed in writing

This variation ensures that the agreement does not automatically transfer unless explicitly assumed.

This Agreement shall automatically terminate upon a corporate reorganization of either Party unless the successor entity expressly assumes this Agreement in writing within [X] days of the reorganization’s effective date.

Reorganization-specific indemnification

This variation provides that liabilities arising from the reorganization remain with the original entity.

If a Party undergoes a corporate reorganization, it shall indemnify and hold harmless the other Party from any claims, liabilities, or losses arising directly from such reorganization, except as otherwise agreed in writing.

Reorganization triggers audit rights

This variation allows for an audit of the successor entity’s compliance post-reorganization.

If a corporate reorganization occurs, the non-reorganizing Party shall have the right to audit the successor entity’s operations and financials to ensure compliance with this Agreement. Failure to comply shall constitute grounds for termination upon [X] days’ notice.

No termination for internal restructuring

This variation clarifies that internal restructuring within a company does not affect the agreement.

Internal corporate restructuring, including changes in subsidiaries or business divisions, shall not be deemed a reorganization requiring renegotiation or termination of this Agreement.

Transfer of obligations to multiple entities

This variation allows contractual obligations to be split among multiple successor entities.

In the event that a reorganization results in multiple successor entities, the Parties shall determine in good faith how obligations under this Agreement shall be divided. If no agreement is reached within [X] days, either Party may terminate this Agreement upon written notice.

Reorganization triggers fee adjustments

This variation allows pricing adjustments based on the impact of reorganization.

If a Party undergoes a corporate reorganization that materially affects its financial position or market operations, the other Party may request a renegotiation of pricing terms. If the Parties cannot agree on adjustments within [X] days, the Agreement may be terminated upon [X] days’ notice.

Automatic novation upon reorganization

This variation provides that the agreement is automatically novated to the successor entity.

In the event of a corporate reorganization, all rights and obligations under this Agreement shall automatically transfer to the successor entity without requiring further action by either Party.

Reorganization triggers dispute resolution process

This variation ensures that disputes arising from a reorganization are subject to a defined resolution process.

If a dispute arises regarding the impact of a corporate reorganization on this Agreement, the Parties agree to resolve such disputes through the dispute resolution mechanism outlined in Section [X].

Automatic reassignment with liability retention

This variation ensures that the agreement transfers to the successor entity, but the original entity retains liability for past obligations.

In the event of a corporate reorganization, this Agreement shall automatically transfer to the successor entity. However, the original Party shall remain liable for any breaches or obligations incurred prior to the effective date of the reorganization.

Effectiveness conditional on regulatory clearance

This variation makes the transfer of the agreement contingent on receiving regulatory approval.

This Agreement shall not become effective for any successor entity following a corporate reorganization until all necessary regulatory approvals have been obtained and confirmed in writing.

Transfer contingent on meeting financial thresholds

This variation allows the agreement to transfer only if the successor entity meets a certain financial standard.

If a corporate reorganization occurs, this Agreement shall only transfer to the successor entity if it meets the financial solvency and creditworthiness standards set forth in Section [X]. If the successor entity fails to meet such standards, the other Party may terminate this Agreement upon [X] days’ notice.

Assignment limited to affiliated entities

This variation allows assignment of the agreement only to a restructured entity within the same corporate group.

In the event of a corporate reorganization, this Agreement may only be assigned to an entity that is a direct affiliate, subsidiary, or parent company of the original Party. Any assignment outside of this structure shall require prior written approval from the other Party.

Transfer allowed only if no material adverse effect

This variation ensures the agreement transfers only if the reorganization does not negatively impact performance.

In the event of a corporate reorganization, this Agreement shall remain in effect provided that the successor entity can demonstrate that there is no material adverse effect on its ability to perform its obligations. If such an effect is found, the other Party may request renegotiation or terminate this Agreement.

Automatic transfer with notification requirement

This variation allows the agreement to transfer automatically but requires notification to the other party.

If a Party undergoes a corporate reorganization, this Agreement shall automatically transfer to the successor entity. The transferring Party shall provide written notice of such transfer within [X] days of the effective date of the reorganization.

Reorganization triggers renegotiation of key terms

This variation ensures that certain terms are renegotiated upon reorganization.

In the event of a corporate reorganization, the Parties agree to renegotiate key commercial terms that may be impacted by the reorganization, including but not limited to pricing, service levels, and liability provisions. If no agreement is reached within [X] days, either Party may terminate this Agreement.

No transfer without maintaining existing personnel

This variation ensures the agreement only transfers if key personnel remain in place post-reorganization.

If a corporate reorganization occurs, this Agreement shall only transfer to the successor entity if at least [X]% of the existing key personnel remain employed under terms substantially similar to those in place prior to the reorganization.

Agreement applies to restructured divisions

This variation clarifies that the agreement continues to apply to any reorganized business divisions.

In the event of a corporate reorganization that results in the restructuring of business divisions, this Agreement shall continue to apply to any division or entity that assumes the same functional role as the original Party.

No automatic transfer for partial divestitures

This variation clarifies that the agreement does not automatically transfer if only part of a business is sold.

If a corporate reorganization results in the partial divestiture of a business unit, this Agreement shall not automatically transfer to the divested entity unless expressly agreed in writing by the Parties.

Successor entity must adhere to existing service levels

This variation requires the successor entity to maintain existing service levels upon transfer.

In the event of a corporate reorganization, the successor entity must maintain all service levels, performance obligations, and warranties as set forth in this Agreement. Any deviation shall constitute a material breach.

Successor entity must provide additional security or guarantees

This variation requires the successor entity to provide financial guarantees to ensure continued performance.

If this Agreement transfers to a successor entity due to a corporate reorganization, the successor must provide additional security, guarantees, or financial assurances as reasonably required by the other Party to ensure continued performance.

Reorganization triggers price adjustments

This variation allows for price renegotiation if a reorganization significantly impacts cost structures.

If a corporate reorganization materially affects the cost structure of goods or services under this Agreement, either Party may request a price adjustment. If an agreement is not reached within [X] days, the Agreement may be terminated upon [X] days’ notice.

No assumption of liabilities by successor entity

This variation ensures that the successor entity does not automatically assume prior liabilities.

In the event of a corporate reorganization, the successor entity shall not assume any liabilities or obligations incurred by the original Party prior to the effective date of the reorganization unless expressly agreed in writing.

Transfer allowed only if obligations remain unchanged

This variation allows the agreement to transfer only if contractual obligations remain the same.

If a corporate reorganization occurs, this Agreement may only be assigned to the successor entity if all obligations and performance requirements remain unchanged. Any material change shall require prior approval from the other Party.

Successor entity must enter into a novation agreement

This variation requires the successor entity to formally assume the agreement through a novation process.

In the event of a corporate reorganization, the successor entity must enter into a novation agreement with the other Party to formally assume all rights and obligations under this Agreement.

Reorganization must not conflict with compliance obligations

This variation ensures that the successor entity complies with regulatory and contractual obligations.

If this Agreement transfers due to a corporate reorganization, the successor entity must certify that it remains in compliance with all applicable laws, regulations, and contractual obligations set forth herein.

Agreement terminates if successor entity operates in a restricted industry

This variation allows termination if the successor operates in a conflicting industry.

If a corporate reorganization results in the successor entity operating in an industry that competes with or conflicts with the interests of the other Party, the other Party may terminate this Agreement upon [X] days’ written notice.

Transfer contingent on maintaining operational capacity

This variation ensures the successor entity can fulfill obligations before transfer.

This Agreement shall only transfer to a successor entity following a corporate reorganization if the successor entity demonstrates that it has the operational capacity to meet all obligations under this Agreement.

Automatic termination if successor entity is based in a different jurisdiction

This variation ensures the agreement does not automatically transfer if the successor entity is based in a new legal jurisdiction.

If a corporate reorganization results in the successor entity being incorporated in a different jurisdiction, this Agreement shall automatically terminate unless both Parties agree in writing to its continuation.

Reorganization triggers a competitive restrictions review

This variation ensures the agreement is reviewed to assess competition risks before transfer.

If a corporate reorganization occurs, the non-reorganizing Party shall have the right to review the impact of the reorganization on competitive restrictions. If the reorganization results in an increased competitive risk, the non-reorganizing Party may terminate this Agreement.

Transfer subject to written confirmation from counterparties

This variation requires both parties to confirm agreement to the transfer in writing.

In the event of a corporate reorganization, this Agreement may only be transferred upon the written confirmation of both Parties. Any attempted transfer without such confirmation shall be null and void.

Reorganization does not excuse past breaches

This variation ensures that a reorganization does not remove liability for prior breaches.

A corporate reorganization shall not affect liability for any breaches of this Agreement that occurred prior to the effective date of the reorganization. All claims, disputes, and liabilities shall survive such reorganization.

Reorganization triggers an independent financial review

This variation requires an independent financial review before the agreement transfers to a successor entity.

If a corporate reorganization occurs, the successor entity must undergo an independent financial review conducted by a mutually agreed-upon auditor. If the review identifies a material financial risk, the non-reorganizing Party may terminate this Agreement upon [X] days’ notice.

Agreement remains in effect unless reorganization materially changes ownership structure

This variation allows the agreement to continue unless ownership changes beyond a certain threshold.

This Agreement shall remain in effect following a corporate reorganization unless such reorganization results in a change of ownership exceeding [X]% of the equity interest in either Party. If such a change occurs, the other Party may terminate the Agreement upon [X] days’ written notice.

Transfer contingent upon maintaining key intellectual property rights

This variation ensures that intellectual property rights remain intact after a corporate reorganization.

If a corporate reorganization occurs, this Agreement shall only transfer to the successor entity if it retains full ownership and control over all intellectual property rights necessary for the fulfillment of its obligations under this Agreement.

Successor entity must meet insurance requirements

This variation makes the agreement’s transfer contingent on the successor entity maintaining adequate insurance coverage.

In the event of a corporate reorganization, this Agreement shall only remain in effect if the successor entity maintains insurance coverage at levels equal to or greater than those required under this Agreement.

Reorganization triggers mandatory disclosure of financial standing

This variation requires full disclosure of the successor entity’s financial condition before the agreement can transfer.

If a corporate reorganization occurs, the successor entity must provide financial disclosures to the other Party demonstrating its ability to meet contractual obligations. If such disclosures indicate financial instability, the other Party may terminate this Agreement.

Transfer allowed only if reorganization does not create conflicts of interest

This variation ensures that the successor entity does not create a business conflict for the non-reorganizing party.

If a corporate reorganization results in the successor entity engaging in business activities that create a conflict of interest with the non-reorganizing Party, the Agreement may be terminated upon [X] days’ notice.

Transfer subject to review of compliance with anti-corruption laws

This variation requires the successor entity to certify compliance with anti-corruption and ethical standards.

If a corporate reorganization occurs, the successor entity must certify its compliance with applicable anti-corruption and ethical regulations. Failure to do so shall constitute grounds for termination of this Agreement.

Agreement applies only if reorganized entity operates under the same brand

This variation ensures the agreement remains in place only if the successor entity continues using the original Party’s brand.

If a corporate reorganization occurs, this Agreement shall remain in effect only if the successor entity continues to operate under the same trade name and branding as the original Party.

Transfer requires reaffirmation of warranties and guarantees

This variation mandates that the successor entity reaffirm all warranties and guarantees in the agreement.

If a corporate reorganization occurs, the successor entity must reaffirm in writing all warranties, guarantees, and indemnities set forth in this Agreement.

Reorganization triggers suspension of obligations for review period

This variation provides for a temporary suspension of contractual obligations to assess the impact of the reorganization.

In the event of a corporate reorganization, the obligations under this Agreement shall be suspended for a period of [X] days to allow for review and renegotiation. If no mutual agreement is reached within that period, either Party may terminate the Agreement.

Automatic termination if successor entity lacks necessary licenses

This variation ensures that the agreement does not transfer if the successor entity fails to secure required licenses.

If a corporate reorganization results in a successor entity that lacks the necessary regulatory licenses or approvals, this Agreement shall automatically terminate.

Transfer only allowed if successor entity assumes indemnification obligations

This variation ensures that the successor entity remains responsible for indemnification obligations.

If a corporate reorganization occurs, this Agreement shall only transfer if the successor entity expressly assumes all indemnification obligations set forth in this Agreement.

Reorganization triggers notice to counterparties within a set period

This variation requires the party undergoing reorganization to notify all counterparties within a specified timeframe.

If a corporate reorganization occurs, the affected Party shall provide written notice to the other Party within [X] days of such reorganization. Failure to provide notice shall be considered a material breach of this Agreement.

Agreement terminates if reorganization results in dissolution of entity

This variation ensures that the agreement does not survive if the original Party dissolves due to reorganization.

If a corporate reorganization results in the dissolution of either Party, this Agreement shall automatically terminate as of the effective date of the dissolution.

Successor entity must honor existing obligations without modification

This variation ensures that the successor entity cannot renegotiate existing obligations upon taking over the agreement.

If a corporate reorganization occurs, the successor entity shall assume all obligations under this Agreement without modification or renegotiation.

Reorganization requires the successor entity to provide performance guarantees

This variation ensures that the successor entity provides performance guarantees before assuming the agreement.

In the event of a corporate reorganization, the successor entity shall provide a written performance guarantee ensuring full compliance with all obligations under this Agreement.

Transfer allowed only if no pending legal disputes

This variation prevents the agreement from transferring if there are unresolved legal disputes involving the successor entity.

If a corporate reorganization occurs, this Agreement shall not transfer if the successor entity is subject to any unresolved legal disputes that could materially impact its ability to fulfill its obligations.

Transfer subject to an independent valuation of successor entity

This variation requires an independent valuation of the successor entity before transferring the agreement.

If a corporate reorganization occurs, this Agreement shall only transfer if an independent valuation confirms that the successor entity possesses sufficient financial and operational capacity to perform under this Agreement.

Reorganization triggers renegotiation of force majeure provisions

This variation allows for a renegotiation of force majeure provisions to reflect the successor entity’s operations.

If a corporate reorganization occurs, the Parties shall renegotiate the force majeure provisions of this Agreement to reflect any changes in operational risks due to the reorganization.

Transfer subject to industry-specific regulatory approvals

This variation ensures the agreement does not transfer unless the successor entity obtains all industry-specific approvals.

If a corporate reorganization occurs, this Agreement shall only transfer if the successor entity secures all industry-specific regulatory approvals required to perform under this Agreement.

Automatic transfer unless objected to within a notice period

This variation allows automatic transfer of the agreement unless the non-reorganizing Party objects within a set timeframe.

In the event of a corporate reorganization, this Agreement shall automatically transfer to the successor entity unless the non-reorganizing Party objects in writing within [X] days of receiving notice of the reorganization.

Reorganization triggers evaluation of tax implications

This variation ensures that the tax implications of the reorganization are assessed before the agreement transfers.

If a corporate reorganization occurs, the Parties shall conduct an evaluation of the tax implications. If such evaluation indicates a material adverse tax impact, either Party may terminate this Agreement upon [X] days’ notice.

This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.

Last updated 20 Mar 2025