Material adverse change: Difference between revisions
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The [[material adverse change]] — fondly known as a “[[MAC]]” is something ineffable and hard to describe in concept, but you will know one when you see it. It is a hotly debated topic among the [[negotiator]] community | {{a|contract|}}The [[material adverse change]] — fondly known as a “[[MAC]]” is something ineffable and hard to describe in concept, but you will know one when you see it. It is a hotly debated topic among the [[negotiator]] community and a good example of the limitations of all this breathless [[smart contract]] chat. | ||
====English law==== | |||
But what, exactly, is “material”? English lawyers might shrug and be a little hand-wavy here — you know, not trivial; not formalistic: | |||
{{quote|“‘Material’ has its normal meaning of something which is real, substantial, significant, not ''de minimis'', something which would affect the way in which you look at something but not necessarily decisively”.<ref>{{citen|Attrill & Ors|Dresdner Kleinwort Ltd|2012|EWHC|1189}} cited in {{citen|Decura|UBS|2015|EWHC|171}} see {{plainlink|https://www.bailii.org/ew/cases/EWHC/Comm/2015/171.html|transcript}}</ref>}} | |||
{{ | ====Our American friends==== | ||
But as the [[doyen of drafting]] attests,<ref>[[A Manual of Style For the Drafting of Contracts|Ken Adams]], {{plainlink|https://www.adamsdrafting.com/rethinking-material-and-mac/|''Rethinking “Material” and “Material Adverse Change”''}}</ref> our [[litigationey]] [[US attorney|American friends]] have gone further down the rabbit-hole than that. Of ''course'' they have. There is US authority that “material” means “information that, if known, would cause a party to walk away from the transaction”. This is a high bar: a lot higher than “non-trivial”. | |||
{{sa}} | |||
*[[Events of default]] | *[[Events of default]] | ||
*[[Termination events]] | *[[Termination events]] | ||
*[[Creditworthiness]] | *[[Creditworthiness]] | ||
*[[Smart contract]]s | *[[Smart contract]]s | ||
{{ref}} | |||
Latest revision as of 13:32, 13 August 2024
The material adverse change — fondly known as a “MAC” is something ineffable and hard to describe in concept, but you will know one when you see it. It is a hotly debated topic among the negotiator community and a good example of the limitations of all this breathless smart contract chat.
English law
But what, exactly, is “material”? English lawyers might shrug and be a little hand-wavy here — you know, not trivial; not formalistic:
“‘Material’ has its normal meaning of something which is real, substantial, significant, not de minimis, something which would affect the way in which you look at something but not necessarily decisively”.[1]
Our American friends
But as the doyen of drafting attests,[2] our litigationey American friends have gone further down the rabbit-hole than that. Of course they have. There is US authority that “material” means “information that, if known, would cause a party to walk away from the transaction”. This is a high bar: a lot higher than “non-trivial”.
See also
References
- ↑ Attrill & Ors v Dresdner Kleinwort Ltd [2012] EWHC 1189 cited in Decura v UBS [2015] EWHC 171 see transcript
- ↑ Ken Adams, Rethinking “Material” and “Material Adverse Change”