MAC clauses excuse closing where a change materially and adversely affects the business. Carve-outs typically exclude general economic conditions, industry-wide effects, and changes in law unless disproportionately affecting the target.
Successful MAC invocations are rare.
Alternative Names:
MAC|MAC Clause
Why it Matters?
Delaware has set an exceptionally high bar, requiring a durationally significant decline measured in years rather than quarters, and buyers have almost never prevailed. The disproportionate effect carve-out is where invocations survive, since a target harmed more than its industry peers may fall outside the exclusions. Drafting the carve-outs and their exceptions is the negotiation that determines whether the clause has practical effect.
Frequently Confused with
Related terms
Frequently asked questions
How high is the Delaware bar?
Where do invocations survive?
