Assignment Clause

What is an assignment clause?

To "assign" a contract means to transfer it to someone else, who then takes over the rights and duties. An assignment clause sets the rules for that. It answers one question: can this contract move to a new company, and does the other side get a say?

In SaaS terms, the rules are often uneven. Atlassian's Customer Agreement says the customer "may not assign or transfer any of its rights or obligations" without consent, apart from a merger or sale of the business, while Atlassian may assign its own rights without the customer's consent. HubSpot's terms follow a similar pattern: you need consent except in a merger or sale, and HubSpot may assign to an affiliate or in similar corporate deals.

Some vendors make it even on both sides. Zendesk's customer agreement says "Neither party will assign this Agreement," then lists the same exceptions for both: affiliates, consent that cannot be unreasonably refused, and a merger, acquisition or sale of the business.

Why it matters to you

• Your vendor can change hands. When a vendor is bought, the clause often lets the contract move to the buyer. Your data, your prepaid fees and your renewal now sit with a company you never chose.
• New owners bring new terms. The buyer may later move you to its own terms, with a different governing law, new subprocessors or new pricing.
• Your own sale can get stuck. If you sell your company and your key contracts need vendor consent to transfer, a missing consent can slow the deal. A merger exception avoids that.
• Your promises to customers. If you told customers which companies handle their data, a transfer to a new owner may change that list.

What to check

• Whether the clause is even. Can the vendor assign freely while you need consent?
• Whether you can transfer the contract in a merger or sale of your own business without asking.
• Whether the vendor must tell you after it assigns the contract, and whether you can leave if the new owner is a competitor of yours.
• Whether the data processing agreement moves with the contract, and whether a new owner counts as a new subprocessor that you can object to.
• Whether there is a separate change of control clause that gives either side a right to end the contract when ownership changes.

How Venpo helps

Venpo watches your vendors' terms, DPAs and subprocessor lists and emails you when they change. After an acquisition, that is often where you first see a new company name, a new governing law or new subprocessors, and the alert explains what changed and why it matters to you.