This post uses hypothetical scenarios for illustrative purposes only. It does not describe any actual client, transaction, or representation, and is not legal advice.
Picture a sale where the target’s most valuable asset is a single contract — a supply agreement, an exclusive license, a master services agreement with the customer that is half of revenue. Buried in its boilerplate: neither the agreement nor any rights under it may be assigned, by operation of law or otherwise, without the counterparty’s prior written consent. Now the deal team has a problem shaped like a question: does the acquisition require asking permission? Asking invites the counterparty to reprice, delay, or shop the leverage. Not asking, when consent was required, hands the counterparty a termination right over the crown-jewel contract the buyer just paid for. The answer turns less on the clause than on the structure of the deal — which is why structure gets chosen with this clause open on the table.
Start with what an assignment actually is
An assignment is a transfer of contract rights from one party to someone else. The clause exists because the counterparty priced the deal on a specific partner — its credit, its competence, its identity — and wants a veto before performing for a stranger. Courts generally enforce clear anti-assignment provisions, Florida courts included. But the clause only fires when a transfer happens, and the four standard acquisition structures move the contract in four different ways. That’s the whole game. The diligence exercise of sorting the target’s contract stack into consent buckets — the same review that drives the material-contracts covenant — starts by asking, for each contract, whether this structure even touches it.
Structure decides the question before the clause does
Run the four structures against the same clause. First, the asset sale: the target conveys the contract to the buyer by assignment — that is literally the closing mechanic — so the clause fires and consent is required. No drafting cleverness avoids it, which is one reason consent-heavy targets migrate away from asset deals despite the tax and liability reasons to prefer them. Second, the stock sale: the contract never moves. The same entity that signed it still holds it; only the entity’s owners changed. A pure anti-assignment clause is not implicated, and the counterparty’s protection, if any, has to come from a change-of-control provision — different words doing a different job. Third, the forward merger: the target merges into the buyer and ceases to exist, and its contracts vest in the survivor by operation of law. Because the contract ends up held by a different legal person than the one that signed it, courts have often treated this as an assignment by operation of law — exactly the phrase careful counterparties add to their clauses. Fourth, the reverse triangular merger: the buyer’s shell merges into the target and the target survives, now as the buyer’s subsidiary. The signing entity still holds the contract, just under new ownership — functionally a stock sale wearing merger mechanics.
Delaware answered the reverse-triangular question squarely in Meso Scale Diagnostics v. Roche Diagnostics, where the Court of Chancery held on summary judgment in 2013 that a reverse triangular merger is not an assignment by operation of law, reasoning that mergers generally do not assign assets that started and stayed with the surviving entity. The court even offered the drafting moral: a counterparty that wants a veto over reverse mergers should negotiate a change-of-control clause instead of leaning on assignment language. The comfort has borders, though. A California federal court in SQL Solutions v. Oracle reached the opposite conclusion under California law two decades earlier, and plenty of contracts choose neither Delaware nor Florida law. The governing-law clause and the anti-assignment clause have to be read together, contract by contract — a blanket “RTMs never need consent” rule is how crown-jewel contracts get terminated.
Florida’s merger statute vests rights without a transfer
Florida’s corporate statute leans the same direction as Delaware on the mechanics. Under section 607.1106, Florida Statutes, when a merger becomes effective the property and contract rights of each non-surviving party become the survivor’s “without transfer, reversion, or impairment.” That vesting-not-transfer formulation is the statutory hook for arguing that merger mechanics are not assignments at all — and in a reverse triangular structure the argument barely needs the statute, because the contract-holding entity survives and nothing vests anywhere. The same conceptual architecture shows up in Florida’s conversion statutes, which is why a pre-sale conversion or redomestication is usually analyzed as the same entity continuing in a new form rather than a hand-off between two entities. None of this guarantees an outcome under another state’s law or against a clause drafted to capture mergers expressly — “including by merger, whether or not the party is the survivor” is language that exists because transactional lawyers read the cases too.
Draft for the outcome you want, on both sides of the table
The doctrine writes the drafting advice. For the founder building a company that will someday be sold, the enemy hiding in your own contracts is expansive assignment language: clauses that deem a change of control to be an assignment, or that capture mergers “whether or not such party is the surviving entity.” Every one of those converts a future sale into a consent negotiation with your counterparty at maximum leverage. Push for silence, or for a carve-out permitting assignment to an acquirer of all or substantially all assets. For the party relying on who its counterparty is — the licensor, the exclusive distributor, the customer with pricing built on a relationship — the Meso Scale lesson is that anti-assignment language alone does not reach ownership changes; if identity of control matters, say so in a change-of-control provision with teeth. And for the buyer sequencing a deal, bucket the contract stack early: which contracts does this structure leave untouched, which require consent, and which of the consent-required contracts justify choosing a different structure altogether.
The takeaway
Anti-assignment clauses don’t answer the M&A question; structure does. Asset sales trigger them, stock sales generally don’t, forward mergers often do, and reverse triangular mergers — under Delaware’s Meso Scale reasoning and the vesting logic Florida writes into section 607.1106 — generally don’t, unless the clause was drafted to say otherwise or the governing law says otherwise. The exposure lives contract by contract, in the interaction of three clauses nobody read at signing: assignment, change of control, and governing law. Read them together before the letter of intent picks a structure, because the cheapest consent is the one the deal never needed.
If you are structuring a deal around a consent-heavy contract stack — or negotiating the contracts that stack will someday contain — feel free to reach out to my firm manager, Magda, at Magda@montague.law, or fill out our contact form. Mention you read this post.
