Cases May Expand On U.S. Material Adverse Change Standard
Mondaq Business Briefing › United States Law Articles in English (2008)
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Cases May Expand On U.S. Material Adverse Change Standard
An often troubling aspect of merger or acquisition agreements is that the buyer will usually not actually buy the enterprise in question until several weeks, if not months, after the purchase price has been negotiated and agreed upon. Events and circumstances may arise causing the value of the enterprise to diminish so significantly that the buyer risks acquiring something for which it did not bargain. As a result, most merger or acquisition agreements include provisions known as material adverse change or material adverse effect (together, MAC) clauses. These clauses are intended to alloc...
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