This clause covers what happens if key people leave, the company is sold, or ownership changes during the contract. It matters because contracts often depend on specific individuals' skills or relationships, and losing them can derail the deal. For example, if you hire a consultant based on their expertise, the clause might require them to train a replacement before leaving, or prevent them from being reassigned to other clients. In UK employment law and US contract practice, courts recognize that personal service contracts are affected by key person changes, so this clause protects you by forcing the other party to maintain continuity.
Identify which people are essential to the contract and name them specifically. Require that they cannot be replaced without your approval, or that replacements must have similar qualifications and experience. Add a clause allowing you to exit the contract if a key person leaves without an acceptable replacement within 30 days. ---
Frequently Asked Questions
What does this clause mean in simple terms?
This clause covers what happens if key people leave, the company is sold, or ownership changes during the contract.
Why should I care about this clause?
It matters because contracts often depend on specific individuals' skills or relationships, and losing them can derail the deal.
What are my options?
For example, if you hire a consultant based on their expertise, the clause might require them to train a replacement before leaving, or prevent them from being reassigned to other clients.
How does this affect small businesses?
In UK employment law and US contract practice, courts recognize that personal service contracts are affected by key person changes, so this clause protects you by forcing the other party to maintain continuity.