MAC clause
A clause allowing the buyer to withdraw on a material adverse change occurring between signing and closing.
The MAC clause (material adverse change) protects the buyer during the interim period between signing and closing. If a contractually defined material adverse change in the assets, financial position or earnings of the target occurs, the buyer can refrain from completing or demand adjustments. This allocates the risk of unforeseen deterioration.
In practice MAC clauses are narrowly defined and carry exceptions (such as general market developments or industry trends), so that reliance on them rarely succeeds. The MAC clause is often structured as an additional condition precedent in the share purchase agreement.
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This explanation gives a general overview of Austrian law and does not replace advice in an individual case. The specific circumstances of your transaction are always decisive.
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Signing
The execution of the share purchase agreement, by which the parties become contractually bound; the transfer itself follows at closing.
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Closing
The completion of the transaction at which, once all conditions are satisfied, the shares are transferred and the purchase price is paid.
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Conditions precedent
Suspensive conditions that must be satisfied between signing and closing before the transaction is completed.
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Share purchase agreement (SPA)
The central agreement governing the acquisition of a business (share or asset deal), covering the object of sale, purchase price, warranties and completion.
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