Adverse event

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An adverse event is any event that, happening or having happened, has undesirable consequences for something - something concrete (animal (human or not), vegetable or mineral) or abstract (a firm, political party, organisation, society at large, nation state, etc., an ability to perform, grow, etc., an idea or whatever) under consideration. The "something" from the point of view of which the situation is being evaluated may be stated or implicit.

An adverse event for whatever is under consideration may be neutral or advantageous for something else.

For example in finance, the term may be relevant with regard to loan contracts that include a "material adverse change" clause. A "material adverse event" may then be taken as an event, the happening of which would have or may be expected to have, a material adverse effect on the obligor's ability to perform its obligations under the loan agreement.

The use of the term "adverse event" or "material adverse event" in this context is usually informal, as it is not often a defined term in the agreement.


See also