MAC 101: A Primer on Material Adverse Change Clauses

JoAnn Lombardi VR President  
If your planned acquisition encounters turbulence because your target's finances have suddenly taken a nosedive, you might want to consider one of a buyer's last-ditch remedies – the material adverse change (MAC) clause. Buyers should never claim a MAC without careful consideration, and they must understand that it won't guarantee an escape from a bad deal without penalties. Nonetheless, you should become familiar with the MAC option. Long History MAC clauses have been included in sales agreements for decades but rarely invoked – until recently….

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