The decline may be attributable to general economic or industry conditions, the seller's business or a combination of these. Employee morale could drop during the period between signing and closing and customers may be taking a wait and see attitude, both of which suggests that the decline in OCF is merely a temporary blip. For a seller to shoulder this entire blame, it contends, does not fairly allocate the risk. A buyer may retort that regardless of the reasons, or lack of reasons, for the decline in OCF, the fact is that OCF has declined and the business in its unbiased view may be less valuable, and is certainly less financeable. The other condition to closing with particular significance for communications transactions involves material adverse changes.
Most clauses tend to be purely subjective in nature.
A mach out will occur, for example, if there has been a mach in seller's business, financial condition, properties or prospects. These are all value-laden concepts. Reasonable people can honestly differ on whether any or all of these machs have occurred. Sellers frequently attempt to qualify mach out clauses to exclude events affecting the economy in general or the industry in particular. They justify this qualifier on the grounds that the mach out should only apply to conditions caused by seller.