Material adverse change: Difference between revisions
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(MAC). A clause in a loan agreement. Normally it is intended as a 'catch-all' clause and states that if there is a change in the circumstances of the | (MAC). | ||
A clause in a loan agreement. | |||
Normally it is intended as a 'catch-all' clause and states that if ''in the opinion of the lender'' there is a change in the circumstances of the borrower that is both material and adverse, then this will constitute an event of default. | |||
Not surprisingly this is a contentious clause, depending on who determines 'material', and how. | |||
Modified forms of the clause may require the opinion to be 'reasonable' or replace the 'opinion' with an objective test. | |||
== See also == | == See also == | ||
* [[Conduct]] | |||
* [[Event of default]] | * [[Event of default]] | ||
* [[Loan agreement]] | * [[Loan agreement]] | ||
* [[Material]] | |||
* [[Material adverse effect]] | |||
* [[Materiality]] | |||
[[Category:Long_term_funding]] | |||
[[Category:Treasury_operations_infrastructure]] | |||
Latest revision as of 10:32, 15 July 2021
(MAC).
A clause in a loan agreement.
Normally it is intended as a 'catch-all' clause and states that if in the opinion of the lender there is a change in the circumstances of the borrower that is both material and adverse, then this will constitute an event of default.
Not surprisingly this is a contentious clause, depending on who determines 'material', and how.
Modified forms of the clause may require the opinion to be 'reasonable' or replace the 'opinion' with an objective test.
