Material Adverse Effect definition: Copy, customize, and use instantly
Introduction
The term "Material Adverse Effect" refers to any event, change, or effect that significantly impacts the business, operations, financial condition, or other critical aspects of an entity. It is used to describe situations where such adverse changes affect the company's ability to meet its obligations or perform as expected.
Below are various examples of how "Material Adverse Effect" can be defined in different contexts. Copy the one that fits your needs, customize it, and use it in your contract.
Definition of "Material Adverse Effect" as a significant impact on financial condition
This definition ties "Material Adverse Effect" to a negative change in the company's financial condition.
"Material Adverse Effect" means any event, change, or effect that has, or would reasonably be expected to have, a materially adverse impact on the financial condition, operations, or business prospects of the entity, or its ability to perform its obligations under the agreement.
Definition of "Material Adverse Effect" as an adverse effect on business operations
This definition connects "Material Adverse Effect" to disruptions in a company’s operations.
"Material Adverse Effect" refers to any event, occurrence, or circumstance that significantly harms the ability of the business to operate as intended, including disruptions to key business activities, supply chains, or customer relationships.
Definition of "Material Adverse Effect" as a legal or regulatory impact
This definition links "Material Adverse Effect" to legal and regulatory changes.
"Material Adverse Effect" means any change or event that results in a materially adverse impact on the company’s legal standing or its compliance with relevant laws and regulations, including government actions, investigations, or sanctions.
Definition of "Material Adverse Effect" as a negative market condition
This definition applies "Material Adverse Effect" to shifts in market conditions.
"Material Adverse Effect" refers to a situation where changes in market conditions, such as a downturn or economic crisis, substantially impair the ability of the business to operate or meet its obligations.
Definition of "Material Adverse Effect" as an operational disruption
This definition connects "Material Adverse Effect" to interruptions in business operations.
"Material Adverse Effect" means any significant disruption to the operational capabilities of the company, such as the loss of key personnel, technology failure, or critical production delays.
Definition of "Material Adverse Effect" as an impact on financial performance
This definition links "Material Adverse Effect" to the company’s financial performance.
"Material Adverse Effect" refers to any change that has a significant adverse impact on the company's ability to achieve its projected financial performance, including significant declines in revenue, profitability, or liquidity.
Definition of "Material Adverse Effect" as a risk to ongoing business
This definition connects "Material Adverse Effect" to risks to a company's continuity.
"Material Adverse Effect" means any change or event that presents a significant risk to the continued operations or viability of the business, either in the short or long term, including significant operational, strategic, or market-based risks.
Definition of "Material Adverse Effect" as a reputational damage
This definition links "Material Adverse Effect" to reputational harm.
"Material Adverse Effect" means any event or condition that causes or is expected to cause a significant deterioration in the reputation of the company, resulting in loss of customers, partners, or market share.
Definition of "Material Adverse Effect" as a deterioration in business prospects
This definition ties "Material Adverse Effect" to a reduction in growth potential.
"Material Adverse Effect" refers to a situation where changes in the company’s business environment, including the competitive landscape, technology, or market conditions, lead to a significant reduction in its business prospects or future growth potential.
Definition of "Material Adverse Effect" as financial distress
This definition connects "Material Adverse Effect" to financial instability.
"Material Adverse Effect" means any event, change, or occurrence that causes the company to face financial distress, such as significant losses, increased debt obligations, or insolvency risks.
Definition of "Material Adverse Effect" as an adverse effect on contractual obligations
This definition ties "Material Adverse Effect" to a company’s ability to meet contract terms.
"Material Adverse Effect" refers to any event that negatively affects the company's ability to perform its obligations under any contracts or agreements, including the inability to deliver goods or services as agreed.
Definition of "Material Adverse Effect" as adverse environmental impact
This definition links "Material Adverse Effect" to environmental changes.
"Material Adverse Effect" means any environmental change or event, such as a natural disaster or environmental regulatory change, that significantly harms the company’s operations or business performance.
Definition of "Material Adverse Effect" as an adverse change in key relationships
This definition connects "Material Adverse Effect" to disruptions in relationships.
"Material Adverse Effect" refers to a significant disruption or change in key relationships, such as with customers, suppliers, or business partners, that materially impacts the company's ability to conduct its business.
Definition of "Material Adverse Effect" as significant litigation risk
This definition ties "Material Adverse Effect" to the impact of legal disputes.
"Material Adverse Effect" refers to the material risk or effect of ongoing or threatened litigation that could result in significant financial or operational harm to the company or its ability to perform under agreements.
Definition of "Material Adverse Effect" as a loss of key assets
This definition ties "Material Adverse Effect" to the impact of losing critical assets, which directly affects the company’s ability to operate.
"Material Adverse Effect" means any event or circumstance that results in the loss, destruction, or damage to key assets of the company, impairing its ability to operate or perform its obligations under the agreement.
Definition of "Material Adverse Effect" as an economic downturn
This definition links "Material Adverse Effect" to a severe economic or market crisis that limits the company’s financial stability.
"Material Adverse Effect" refers to any significant economic downturn or market crisis that substantially diminishes the company’s ability to meet its financial obligations, including declines in asset values, liquidity, or profitability.
Definition of "Material Adverse Effect" as a substantial decline in customer demand
This definition connects "Material Adverse Effect" to a major drop in demand, affecting revenue and long-term business sustainability.
"Material Adverse Effect" means any substantial and sustained decline in customer demand for the company’s products or services, which significantly impacts its revenue, profitability, or long-term viability.
Definition of "Material Adverse Effect" as loss of key personnel
This definition ties "Material Adverse Effect" to the departure of key employees or management, leading to operational disruption.
"Material Adverse Effect" refers to the loss or departure of key management or employees, resulting in significant operational disruptions or loss of business expertise crucial to the company’s continued success.
Definition of "Material Adverse Effect" as a regulatory change
This definition links "Material Adverse Effect" to significant changes in laws or regulations that negatively affect the company.
"Material Adverse Effect" means any change in laws, regulations, or governmental policies that results in a significant and negative impact on the company’s business operations, compliance obligations, or market position.
Definition of "Material Adverse Effect" as increased competition
This definition connects "Material Adverse Effect" to the emergence of stronger competitors, undermining the company’s market position.
"Material Adverse Effect" refers to the emergence of new or intensified competition in the company's market, which materially undermines its position, profitability, or growth potential.
Definition of "Material Adverse Effect" as an inability to raise capital
This definition ties "Material Adverse Effect" to challenges in obtaining financing, hindering the company’s financial flexibility.
"Material Adverse Effect" means any inability or significant difficulty in raising capital or obtaining financing on favorable terms, thereby impeding the company’s financial flexibility and growth.
Definition of "Material Adverse Effect" as disruption of supply chains
This definition connects "Material Adverse Effect" to disruptions in the supply chain, causing operational or financial strain.
"Material Adverse Effect" refers to any event or change that disrupts the company’s supply chains, leading to delays, shortages, or increased costs that materially impact its operations or financial performance.
Definition of "Material Adverse Effect" as a strategic failure
This definition links "Material Adverse Effect" to the failure of a key strategic initiative, preventing business growth.
"Material Adverse Effect" means the failure of a key strategic initiative, such as the failure to complete a merger, acquisition, or market expansion, that causes a significant setback to the company’s growth or objectives.
Definition of "Material Adverse Effect" as significant litigation losses
This definition ties "Material Adverse Effect" to the adverse impact of losing a major lawsuit.
"Material Adverse Effect" refers to the adverse impact resulting from the loss of a significant lawsuit, leading to substantial financial liabilities, reputational harm, or operational disruptions.
Definition of "Material Adverse Effect" as a breach of contractual obligations
This definition connects "Material Adverse Effect" to the breach of key contractual duties, impairing the company’s ability to perform.
"Material Adverse Effect" means any breach or violation of key contractual obligations by the company, which results in a material adverse impact on its ability to perform its duties under the contract.
Definition of "Material Adverse Effect" as a technology failure
This definition ties "Material Adverse Effect" to critical technology failures, disrupting operations and customer satisfaction.
"Material Adverse Effect" refers to a significant failure or malfunction of critical technology systems or platforms, impairing the company’s operations, service delivery, or customer satisfaction.
Definition of "Material Adverse Effect" as adverse changes in financial markets
This definition connects "Material Adverse Effect" to fluctuations in the financial markets that impact the company’s financial standing.
"Material Adverse Effect" means any significant changes in financial markets, such as fluctuations in interest rates or currency values, that negatively affect the company’s financial health or obligations.
Definition of "Material Adverse Effect" as natural disasters or force majeure events
This definition ties "Material Adverse Effect" to unforeseen events, such as natural disasters, that disrupt the company’s operations.
"Material Adverse Effect" refers to any event of force majeure, such as a natural disaster, war, or pandemic, that disrupts the company’s operations, financial condition, or ability to perform its obligations.
Definition of "Material Adverse Effect" as an adverse change in business reputation
This definition links "Material Adverse Effect" to a significant loss of reputation, impacting relationships with stakeholders.
"Material Adverse Effect" means any change or event that results in a significant loss of reputation or goodwill, undermining the company’s relationships with clients, customers, or stakeholders.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.