1. A clause in an agreement between two nations providing that each will treat the other as well as it treats any other nation that is given preferential treatment. [Cases: Treaties
8. C.J.S. Treaties § 6.]
2. By extension, such a clause in any contract, esp. an oil-and-gas contract. — Often shortened to favored-nation clause; MFN clause. — Also termed most-favored-nations clause. Cf. preferential tariff under TARIFF.