Due Diligence & Legal
Material Adverse Change (MAC) Clause
A buyer's right to renegotiate or exit if a significant negative event hits the target pre-closing — sellers should narrow MAC definitions to protect deal certainty.
Seller Example
Promoter of a Kanpur leather goods manufacturer negotiates the MAC clause to exclude general industry-wide or macroeconomic downturns and apply only to company-specific events, protecting the ₹18 Cr deal from renegotiation due to sector-wide export slowdowns outside the seller's control.