Assignment in NDAs — NDASentry Risk Taxonomy

The Question

Who can take the discloser's place?

When a recipient signs an NDA, they make a deliberate choice about the other party — who they're sharing information with, what that party does, whether they trust them with confidential material. The assignment clause determines whether that choice survives a change in ownership or control on the other side.

Companies get acquired. Divisions get spun off. Investors gain control through preferred-stock transactions. Each of these creates a new legal entity standing in the shoes of the original counterparty. The question the assignment clause answers: does the NDA travel with that change, and does the recipient have any say in it?

The aggressive variant is one-sided free assignment — the disclosing party can transfer the agreement to anyone, including a direct competitor, while the recipient cannot. The subtle variant is 'successors and assigns' boilerplate without a consent requirement, which silently permits the same outcome through different drafting.

Legal Background

What balanced assignment looks like

A defensible assignment clause is mutual and consent-based. Either party may assign the agreement only with the other party's prior written consent (sometimes qualified as 'not to be unreasonably withheld'). Many drafts include a narrow exception for assignment to an affiliate or in connection with a sale of substantially all assets, with notice to the other party.

The unilateral variant lets one party assign freely while binding the other. Most commonly this favors the disclosing party — the discloser can transfer the NDA to whoever acquires them, while the recipient cannot assign at all. The asymmetry is often hidden inside the standard 'this Agreement shall inure to the benefit of and be binding upon the parties and their respective successors and assigns' language.

The successors-and-assigns clause is doing more work than it appears. Standing alone, it permits the agreement to be assigned without specifying any conditions. Combined with the absence of an explicit consent requirement, it functions as silent permission for free assignment by either party. The recipient who didn't notice the clause has effectively agreed to be bound to whoever acquires the discloser, without any opportunity to object.

Example Clauses

What this looks like in real contracts

Standard — Mutual Consent "Neither party may assign this Agreement or any rights or obligations hereunder, by operation of law or otherwise, without the prior written consent of the other party, such consent not to be unreasonably withheld; provided, however, that either party may assign this Agreement in connection with a merger, acquisition, or sale of substantially all assets, upon written notice to the other party."

One-Sided — Discloser-Friendly "The Disclosing Party may assign this Agreement, in whole or in part, to any third party without the consent of the Receiving Party. The Receiving Party may not assign this Agreement without the prior written consent of the Disclosing Party, which may be withheld in the Disclosing Party's sole discretion."

Silent — Successors and Assigns "This Agreement shall inure to the benefit of and be binding upon the parties and their respective successors and assigns." (Note: when this is the only "

Risk Patterns Scored

What NDASentry flags in this category

9.1 Free assignment by one party only

The agreement permits one party (typically the discloser) to assign freely while requiring the other party's consent for assignment. This lets the disclosing party transfer the agreement — and the recipient's obligations — to whoever acquires it, without any opportunity for the recipient to object. The transferee could be a competitor, a hostile party, or anyone.

9.2 Successors-and-assigns clause without consent

Standard boilerplate language that the agreement binds 'successors and assigns' of both parties, without an accompanying consent requirement. This silently permits assignment to anyone. The recipient discovers the new counterparty only when the assignment has already happened.

9.3 No anti-assignment protection

The agreement contains no provision restricting assignment, neither requiring consent nor limiting permissible transferees. Under most state law, contracts are freely assignable in the absence of express restriction. The omission is therefore consequential: it means the agreement is freely assignable to anyone, including parties the recipient would never have agreed to deal with.

Empirical findings — coming soon

We are scoring a corpus of public NDAs to publish prevalence data for each pattern in this taxonomy. The findings — including what percentage of real NDAs contain the patterns above, broken down by industry and jurisdiction — will appear here when the study is complete.

Common questions

Can my NDA be assigned to another company?

It depends on the assignment clause. If the NDA requires mutual consent for assignment, then no, not without your agreement. If it permits the disclosing party to assign freely, or contains a successors-and-assigns clause without consent requirements, then yes — including to a competitor or hostile acquirer.

What is a 'successors and assigns' clause in an NDA?

Standard boilerplate stating that the agreement binds the parties' successors and assigns — meaning it carries over to anyone who later steps into the parties' shoes. Combined with the absence of an explicit consent requirement, it functions as permission for free assignment by either party.

Should an NDA require consent for assignment?

Standard practice in mutual NDAs is yes — assignment requires prior written consent of the other party, often with a 'not to be unreasonably withheld' qualifier. A narrow exception for assignment in connection with a sale of substantially all assets is common, with notice to the other party.

What happens to an NDA when the company gets acquired?

If the assignment clause permits assignment in connection with a merger or acquisition (common drafting), the NDA transfers to the acquiring entity automatically. If the clause requires consent, the recipient has the right to object — though in practice, most NDAs include the M&A exception.

Assignment