Company Mergers and their Effects on Employment and Lease Contracts
DOI:
https://doi.org/10.35516/Law.2025.12421Keywords:
Company merger, Jordanian companies, employment contracts, lease contracts, legal effectsAbstract
Objectives: This research aims to examine the legal regulation of corporate mergers under Jordanian legislation in terms of their concept, forms, and procedures. It further analyzes the legal effects of mergers on employment contracts and lease contracts concluded prior to their implementation, while identifying legislative shortcomings and ambiguities related to the transfer of contractual rights and obligations to the surviving or newly established company in the absence of a comprehensive statutory provision addressing this matter.
Methods: The research adopts an analytical approach based on examining the Jordanian Companies Law and related legislation, including the Labor Law, the Landlords and Tenants Law, and the Civil Code, alongside an analysis of the 2025 Merger Instructions. It also draws on relevant legal doctrine and Jordanian Court of Cassation jurisprudence, with limited reference to comparative legislation.
Results: The analysis shows that the Labor Law expressly addresses the transfer of employment contracts and guarantees their continuity following a merger, whereas the Landlords and Tenants Law remains silent on the fate of lease contracts. This legislative silence has led to divergent judicial interpretations and a lack of clarity regarding the legal status of such contracts. The study also reveals instances of inconsistency in certain procedural provisions of the Companies Law, particularly with respect to the competent authority responsible for approving merger applications.
Conclusions: The study concludes that legislative reform, primarily to the Companies Law and the Owners and Tenants Law, is needed to ensure the automatic transfer of contractual rights and obligations in merger situations, thereby enhancing legal certainty and stabilizing commercial transactions.
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Copyright (c) 2026 Dirasat: Shari'a and Law Sciences
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
Accepted 2026-01-28
Published 2026-02-11
