How Can a Smart Contract Incorporate Clauses That Require Subjective Interpretation, like a Material Adverse Change (MAC) Clause?

Incorporating subjective clauses like a MAC clause into a deterministic smart contract is a significant challenge. The most common solution is to rely on a trusted oracle or a panel of decentralized oracles (a juried system) to interpret the event off-chain and feed a binary (yes/no) outcome to the smart contract.

Another approach involves creating an "escape hatch" where, upon triggering a potential MAC event, the contract's execution is paused, and control is passed to a pre-agreed-upon arbiter or a decentralized dispute resolution platform like Kleros or Aragon Court to make a binding judgment.