Material adverse change clauses—key cases

The following Banking & Finance practice note provides comprehensive and up to date legal information covering:

  • Material adverse change clauses—key cases
  • Interpreting a MAC clause
  • Acceleration based on a MAC clause

Material adverse change clauses—key cases

This Practice Note sets out certain key cases and associated relevant content relating to material adverse change clauses (MAC) in a financing context. The cases are divided by topic area and include:

  1. interpreting a MAC clause

  2. acceleration based on a MAC clause

Interpreting a MAC clause

Names of partiesJudgment dateCase summaryRelevant content
Grupo Hotelero Urvasco v Carey Value Added [2013] EWHC 1039 (Comm)26 April 2013This case reiterates that ordinary rules of contractual interpretation apply to MAC clauses stating: 'The approach of the English courts is to give effect to what the parties have stipulated in their agreement, applying well settled rules as to the interpretation of contracts.'Case: Arnold v Britton [2013] EWCA Civ 902

Practice Notes:
—Contract interpretation—the guiding principles
—How to approach a contractual interpretation dispute—a practical guide
—Contract disputes—key and illustrative decisions
Grupo Hotelero Urvasco v Carey Value Added [2013] EWHC 1039 (Comm) 26 April 2013This case gives guidance on what is meant by ‘material’ and ‘materially adverse’.
A change can be regarded as materially adverse if it would have caused the lender not to lend at all or to lend on significantly more onerous terms (eg as to margin, maturity or security) or if it substantially affects the borrower's ability to repay, or more generally, significantly increases the risk assumed by the lender.
A temporary

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