Draft Material Adverse Change Clause: Pro-Buyer vs Pro-Seller
Generate a Material Adverse Change definition in two versions, pro-buyer broad and pro-seller narrow with carve-outs, plus annotations on which provisions face the strongest pushback.
The Prompt
This prompt is part of the strategic tier
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Preview prompt structure
— Interest Toggle: MAC Definition Generate a Material Adverse Change (MAC) definition for a $[X]M acquisition in the [industry] sector. VERSION 1 - PRO-BUYER: - Broad MAC definition covering financial performance, customer relationships, key employee departures, regulatory changes, and ind...
Variables (2)
| Variable | Description | Example |
|---|---|---|
| {{deal_size}} | Deal Size (USD millions) | 250 |
| {{industry}} | Industry Sector | specialty chemicals manufacturing |
Expected Output
Two complete MAC clause drafts (pro-buyer and pro-seller) with provision-level pushback annotations and suggested compromise positions for negotiation.
Usage Notes
Use early in deal negotiation to map the negotiation gap on the MAC clause. Delaware courts construe MAC clauses narrowly (Hexion v. Huntsman, IBP v. Tyson, Akorn v. Fresenius), so even broad pro-buyer definitions rarely succeed at closing. Always cite the controlling case law for your governing state when advising the client.
Legal Sources Referenced
- Hexion Specialty Chemicals, Inc. v. Huntsman Corp., 965 A.2d 715 (Del. Ch. 2008)
- In re IBP, Inc. Shareholders Litigation, 789 A.2d 14 (Del. Ch. 2001)
- Akorn, Inc. v. Fresenius Kabi AG, C.A. No. 2018-0300-JTL (Del. Ch. Oct. 1, 2018)
- DGCL § 251 (Merger or Consolidation of Domestic Corporations)
- DGCL § 259 (Status, Rights, Liabilities of Constituent and Surviving or Resulting Corporations)
- ABA Private Target Mergers & Acquisitions Deal Points Study (most recent edition)
- Item 1006 of Regulation M-A (17 CFR §229.1006), Purposes of Transaction and Plans or Proposals
Originally featured in: AI for M&A Lawyers: Due Diligence, LOI Drafting & Deal Room Automation (2026)
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