Glossary · People and paperwork
Breach of Contract
In short
This happens when one party fails to fulfill their obligations under a legally binding agreement. It can lead to disputes, lawsuits, or financial penalties, impacting the business you're buying.
What it means in a deal
During due diligence, you must identify any existing or potential breaches of customer, vendor, or employee contracts. A breach could create significant liabilities or disrupt operations post-acquisition. Your attorney will review all key contracts for potential issues before closing.
Related terms
Common questions about Breach of Contract
- How does a lender determine affiliation when a prior owner retains less than 20% equity and a consulting contract?
- Can I use an SBA 7(a) loan to acquire a business that relies heavily on independent contractors instead of employees?
- What happens if a significant portion of the acquired business's revenue is generated from government contracts?
- Can the value of customer contracts or recurring revenue streams count as collateral for an SBA loan?
- Can an SBA 7(a) loan finance the intangible assets of a service business, such as client lists or recurring contracts?
- What specific conditions trigger affiliation due to contractual relationships or franchise agreements?
Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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