MAC Clause (Material Adverse Change)

A MAC clause entitles the buyer, under narrowly defined conditions, to refrain from completing the transaction if a material deterioration in the business situation occurs between signing and closing. Thresholds, carve-outs, the allocation of the burden of proof and the treatment of systemic or market-wide effects are regularly the subject of intensive negotiation.

In DACH practice, MAC clauses are highly sensitive and difficult to enforce in application. In effect, they therefore often serve less as a practicable right of withdrawal and more as a mechanism for triggering a renegotiation of central transaction parameters in the event of significant changes.