30-second answer
When a brand is acquired, a distributor changes owners or the business moves to an affiliate, does the old contract follow? Exclusivity, deposits, customers, debts and licenses can fall into a gap if assignment rules are unclear.
Applied situation (illustrative)
Consider a China-facing distribution scenario: A brand is acquired and orders begin coming from a different group company. The distributor asks whether the old agreement, exclusivity and payment obligations moved with the business.
Classify the problem before calling everything “breach”
What the brand should focus on
Brands should inventory contracts before M&A to identify consent, notice and non-assignment provisions before closing.
What the distributor/agent should focus on
Distributors should confirm whether a new owner will honor exclusivity, deposits and rebates, ideally through a written assumption/confirmation.
Clauses and records to check
- Consent requirement
- Transferred rights
- Open orders
- New obligor
- Payment instruction
Compare the old and new contracting entities, consent clause and who accepted orders after the transfer. For a China-facing chain, reconcile the Chinese and English versions with orders, seals, invoices and the receiving account. Identify any gap between the brand owner and the supplier.
Additional point for China-Related Cross-Border
Match Chinese and English contract versions, signatures or seals, purchase-order terms, invoice entity and payment recipient. If the brand owner, supplier, exporter and payee differ, document each entity’s authority and responsibility before escalating.
Financial exposure and response options
Reconcile obligations incurred before and after transfer, especially outstanding orders and changes in the payee.
Settlement terms worth writing down
For this China-facing arrangement, write down how consent requirement, open orders and payment instruction will be handled. Set dates and responsibilities for payment or handover, and state what happens if an agreed step is missed.