The COVID-19 pandemic has had, and is likely to continue to
have, a major impact on the global economy as countries implement
various levels of "social distancing" and other
restrictions on normal activities. In these uncertain times, many
businesses may find themselves reviewing their contracts for
material adverse change (MAC) or material adverse effect (MAE)
clauses – or struggling to negotiate such clauses.
These clauses most commonly appear in credit agreements and
acquisition agreements. While there are some general principles
that apply to all MAC clauses, the applicability of any particular
MAC clause to COVID-19's economic impacts will depend on the
wording of the clause and the nature of COVID-19's impact on
the particular business.
