Series 79 practice questioneasyLegal due diligence – contracts review
When reviewing a target’s material contracts during legal due diligence, which clause is MOST important for understanding potential deal impediments?
- AJurisdiction clauses
- BChange of control provisions✓ Correct answer
- CAssignment clauses
- DForce majeure clauses
Explanation
Why B — Change of control provisions
Change of control clauses can trigger contract terminations or require consents if the target is acquired, directly impacting the transaction. Jurisdiction, assignment, and force majeure are less likely to present immediate deal roadblocks.
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