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If there's a contract between parties X and Y, and Y is bought by Z, then what happens to that contract? Is it automatically as if the contract was between X and Z? Or instead, do X and Z need to negotiate a replacement contract?

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If Y is bought by Z then Y must be a company or other non-natural legal person (since you can’t buy people). If Y continues to exist then the contract between X and Y is unchanged.

If the “business” of Y is bought by Z then, the general rule is that contracts are freely transferable like any other property.

However:

  • legislation can restrict the transfer of some kinds of contracts as can public policy
  • contracts for personal services are not transferable
  • The contract may prohibit transfer or place conditions on it.

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