Material adverse change

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(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