Simple definition
A significant negative change that may trigger contractual rights if defined conditions are met.
Corporate
What Does Material Adverse Change Mean?
A significant negative change that may trigger contractual rights if defined conditions are met.
Example in a contract
A contract may use “material adverse change” when describing a significant negative change that may trigger contractual rights if defined conditions are met.
What material adverse change means in a contract
In a contract, this term should be read in the context of the surrounding clause, defined terms, cross-references, and governing law.
Why it may matter
Its practical effect depends on the exact wording and how it connects to the rights and obligations elsewhere in the agreement. Review the exact language rather than relying on the label alone.
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FAQ
Questions about material adverse change.
What does material adverse change mean in plain English?+
A significant negative change that may trigger contractual rights if defined conditions are met.
Where might material adverse change appear in a contract?+
In a contract, this term should be read in the context of the surrounding clause, defined terms, cross-references, and governing law.
Is this definition legal advice?+
No. ClauseInsight provides concise informational explanations. The legal effect of a term depends on the complete document, facts, and applicable law.