Define: Significant Person
In a contract, a Significant Person is an individual identified as materially important to the ongoing performance, management, or continuity of a party, such as a controlling owner, key executive, or named specialist, whose departure, incapacity, or change in status may trigger notice obligations, consent requirements, or termination rights under the agreement.
Legal accuracy standard set & glossary spot-checked by Imad Mohammed Nazar , Skadden-trained M&A lawyer, Legal Engineer at GenieAI
What Significant Person Means in a Contract
A Significant Person is a defined term used to identify an individual whose role, ownership stake, or personal involvement is considered material to a contracting party's ability to perform its obligations. The term is not a fixed legal concept found in a single statute; rather, it is a drafting device that parties create and define for the purposes of their own agreement. It typically appears where one party's performance depends heavily on a specific individual, such as a founder, lead consultant, key employee, or controlling shareholder.
The purpose of naming a Significant Person is to give the other party visibility and, in many cases, control over changes that could affect the value or reliability of the deal. If that individual leaves the company, becomes incapacitated, is convicted of an offense, or transfers their controlling interest, the contract may treat this as a triggering event requiring disclosure, renegotiation, or even termination.
This concept is especially common in Relevant Circumstances
Relevant Sectors