Looking for DD services or software?Beyond M&A →Lens →

Definition

MAE / MAC (Material Adverse Effect / Change)

Clause permitting a party to walk from the deal if something materially deteriorates between signing and closing.

MAE clauses are heavily negotiated and notoriously hard to invoke. The standard test in Delaware case law is a 'durationally significant' adverse change that is specific to the target, not the industry. Buyers want broad MAE rights as a walk option; sellers want narrow definitions with extensive carve-outs (industry-wide events, pandemics, regulatory change).

See also