Supplier notification

Many supplier contracts contain anti-assignment language that technically requires the supplier’s consent before the agreement can transfer to a new owner, even where the parties expect it to happen automatically. Notification and consent are often treated as one step in practice, done together rather than in sequence, but they are legally two different things and only one of them is optional.

What to sort out before the notice goes out

• Which contracts are assignable as written, and which need supplier consent
• Whether pricing, credit terms or minimum orders were personal to the seller’s relationship
• Who the supplier should invoice and ship to after closing
• Whether any deposit or account held by the supplier needs to move with the account

Why waiting until after closing is risky

A supplier that finds out about the change informally, or after an invoice bounces, has more leverage than one approached properly before closing with a plan already in hand. For a business that depends on a small number of key suppliers, losing even one over a mishandled notification can undo a meaningful part of what the buyer paid for.