Open AccessRethinking MAC Clauses in the Time of Akorn, Boston Scientific, and COVID-19
Author(s) -
S. I. Shapiro
Publication year - 2021
Publication title -
michigan business and entrepreneurial law review
Language(s) - English
Resource type - Journals
eISSN - 2375-7558
pISSN - 2375-7523
DOI - 10.36639/mbelr.10.2.rethinking
Subject(s) - covid-19 , law , business , law and economics , political science , economics , medicine , virology , disease , pathology , outbreak , infectious disease (medical specialty)
The MAC clause is perhaps the most important clause in contract law, giving acquirers the ability to terminate even the largest agreements in the face of an often vaguely defined “Material Adverse Change.” For decades, even though MAC clauses have been present in nearly every merger agreement, courts have almost universally refused to enforce them. But the Delaware Chancery Court’s 2018 decision in Akorn may finally change that. As the world deals with the economic uncertainty caused by COVID-19, courts may soon get more opportunities to decide whether or not they will follow Akorn’s lead and begin to allow companies to exit agreements. In this Article, I argue that they should.