Glossary · People and paperwork
Contract termination
In short
The ending of a contract, either by agreement, breach, or a specified clause. As a buyer, you must understand how key contracts can be terminated and if a change of ownership triggers termination.
What it means in a deal
During due diligence, scrutinize all major contracts for termination clauses, especially those related to customers, suppliers, and employees. Many contracts have 'change of control' clauses that allow the other party to terminate the agreement if the business is sold. Negotiate with the seller to secure consent or new agreements for critical contracts before closing.
Related terms
Common questions about Contract termination
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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