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2021 Material Adverse Change (MAC) Clauses in Business Transactions

Total Credits: 1.2 Self Study

Practice Area:
Business & Corporate |  Commercial / Collections / Consumer
Audio and Video


Original program date 5/4/2021

Material Adverse Change (MAC) clauses are common in most business transactions. These clauses allocate among the parties the risk of a MAC occurring between the execution of transactional documents and closing the underlying transaction. Sellers want certainty that a sale or other transaction will close and argue that the MAC clause should be very narrowly drafted.Buyers want maximum flexibility and will argue that anything that makes the transaction unattractive should constitute a MAC. Between those two opposing views are a host of narrow and technical but important details that need to be negotiated, details which will determine whether the transaction is successfully closed, efficiently and cost-effectively terminated, or devolves into dispute and litigation. This program will provide you with a practical guide using and drafting MAC clauses in transactions.

  • Drafting “Material Adverse Change” provisions and carve-outs
  • Forms of MACs – closing conditions or representations?
  • Practical process of “proving” a MAC occurred, including burden of proof
  • What happens to the transaction if a MAC occurred?
  • Spotting red flags when drafting MAC clauses and best practices to reduce the risk

Note: This material qualifies for self-study credit only. Pursuant to Regulation 15.04.5, a lawyer may receive up to six hours of self-study credit in a reporting year. Self-study programs do not qualify for GAL Certification, ethics, elimination of bias or Kansas credit.


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