Glossary · Doing the deal
Indemnification from the Seller
In short
A contractual clause where the seller promises to compensate you for specific losses or damages arising after the sale, typically for issues that occurred under their ownership.
What it means in a deal
Your purchase agreement must include strong indemnification clauses. This protects you if problems like undisclosed liabilities or breaches of representations surface post-closing. Ensure the seller stands behind their statements, especially concerning tax liabilities or legal disputes that could come back to haunt you.
Related terms
Common questions about Indemnification from the Seller
- What if a franchise agreement contains provisions for indemnification that concern the SBA?
- Does a full standby seller note prevent the seller from receiving any consulting fees from the business post-acquisition?
- If a seller note is on full standby, can the seller still receive interest payments from the business?
- Can the seller receive any form of compensation from the acquired business during the standby period of their seller note?
- If a seller note is on standby, is the seller prohibited from any post-sale employment with the business?
- What if the seller withdraws from the sale agreement during the SBA loan underwriting process?
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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