Does an agreement need to spell out exactly what 'material' means, or is it left open?

Neither approach is automatically wrong, but each carries a real trade-off, and thoughtful drafting usually lands somewhere in between rather than at either extreme. Leaving "material" undefined gives flexibility to argue about a wide range of situations as they actually arise, which can suit a party who doesn't yet know what specific issues might come up — but that same flexibility is exactly what creates room for genuine disagreement and dispute later, since each side can read the undefined word differently when it actually matters.

Defining "material" precisely, often by attaching a specific dollar threshold or a defined list of qualifying events, gives both sides much more certainty about what will and won't count, and reduces the odds of an expensive argument at exactly the moment — near closing, or during an indemnity dispute — when neither side wants one. The trade-off is that a fixed definition can sometimes exclude a genuinely serious issue that just happens to fall outside the specific wording chosen.

Which approach makes sense depends on the specific clause and the specific deal — a Treadstone business lawyer weighing your particular risk tolerance and deal dynamics is better placed to recommend one than a general rule ever could be.