Material Adverse Change Clauses - Draft Carefully

The unprecedented situation that the coronavirus pandemic has delivered to global commerce has impacted on a variety of contractual issues related to non-contentious day-to-day transactions.  The exchange of contracts marks the formalisation of an agreement between parties and launches what is hoped to be a prosperous venture. However, in uncertain times circumstances change between the moment of signature and the moment of delivery and subsequently many are left to ponder whether their business can execute their end of the contract.

Whether you are a business struggling to chart a path in murky waters and unwilling to overcommit yourself, or whether you are an enterprise unsure whether a venture is sensible, contractual clauses can form pivot points in your dealings.   Material Adverse Change clauses (MAC) clauses can be crucial and will usually be the subject of detailed negotiation between the parties. They are often wide in scope and often may be drafted in