Contract Assignability - Protecting Your TechOne company’s success becomes another’s pain. Mergers and acquisitions over the last few years have taken a toll on brokerages and their tech stacks. Finding means to protect highly invested tools is becoming more difficult. Maybe the first place to begin is with the contract.

Contracts are not easy to read and understand. What is important is to ensure any technology contract or agreement is at least fair and equitable for both parties.

Sadly, most contracts are lopsided to favor the technology company. I am not sure why. Most of these companies are either startups, looking to build client numbers for exit strategies, or there are multiple competitors in the same product space.

The first recommendation from this article. Review a company’s contract or agreement when scheduling a demo or having that first conversation. Have the agreement or contract in hand and negotiated before getting to a point of selecting a company. The selection process needs to include the evaluation of how willing a company is when negotiating its contract.

It is time for brokerages to leverage the power they have to negotiate better deals. The following are keys areas to look for when reviewing contracts.

NOTE: Please use this as a guideline for your markup of a contract prior to an attorney’s review. Let the attorney do what they do best. Protect your interests in a deal.


Let’s start with the assignment or anti-assignment. When merger or acquisition discussions begin, a potential suitor looks to see if contracts with clients are assignable. This means, once the merger or acquisition occurs, the client is still legally bound to the agreement with the original company.

General rules for M&A’s are that contracts are freely assignable. That is unless there is language in the contract itself, or there is a statue or public policy which dictates differently.

Find the assignment clause and strike it out. Especially with contracts with startups and companies who are leveraged with venture capital funding. Add an anti-assignment clause where there are provisions to require notification of a potential M&A – naturally under an NDA – or the contract shall not be assigned or transferred by the technology company without consent by you.

Limitations of Liability

This is one of those sections in a contract that every single character is bold and uppercase. Here is where companies cap damages a client can seek from lawsuits. Client damages are usually capped at the fee amounts in the contract.

Negotiate to a cap that is some multiplier of the fee. Recouping costs and efforts are required from companies who do not or cannot perform under the agreement. Another strategy is to consider remedies that are not monetary but in the form of services.


The purpose of this section is to shift potential costs and liability from third-party claims – sometimes called the hold-harmless provision. An important section of the contract when a brokerage is subscribing to a platform or services that includes content.

Most indemnification clauses are unilateral in limiting the technology company’s liability in third-party claims. A more equitable indemnification clause needs to be bilateral to mutually protect both companies from third-party claims.

Scrutinize every word in this section. Look for any provision where one party pays for defense fees or court costs. Find situations to insert words like ‘reasonable’. An example is when a provision to defend against “all claims” is much harder than to defend against “all reasonable claims”.

There are many other points to consider in a contract and agreements. The above are just a few that related to how an M&A of your technology company has an impact on your business. Review judiciously!

WAV Group has performed many product and vendor evaluations for our clients. Our ‘best practice’ is to have contracts and agreements in hand and reviewed prior to drilling down to a select few potential companies.

Recently, I reviewed an agreement and inserted a provision for anti-assignment in a merger or acquisition. My client thanked me for my leadership in this area after the Compass acquisition of Contactually. This type of language was a key benefit that Booj delivered to their brokerage clients It had to be unwound when they sold to RE/MAX.

Buyer beware! Have a great week.

WAV Group is happy to audit all of your technology agreements and make suggestions for changes that can be negotiated mid-contract or upon renewal.