Glossary · Doing the deal
Material Breach
In short
This is a significant violation of a contract's terms that undermines its entire purpose. It can allow the non-breaching party to terminate the contract and seek damages.
What it means in a deal
In an acquisition, if either the buyer or seller commits a material breach of the purchase agreement (e.g., seller hides liabilities, buyer fails to secure financing as agreed), the deal can fall apart. Your purchase agreement should clearly define what constitutes a material breach and the remedies available.
Related terms
Common questions about Material Breach
- What are the consequences if SBA Form 1919 contains material omissions or misrepresentations?
- Can a lender approve a material change to collateral without prior SBA approval?
- What constitutes a 'material adverse change' that could affect my loan approval after application?
- Which material servicing actions can a 7(a) lender take without prior SBA approval?
- How does an unapproved material servicing action impact the SBA's 7(a) loan guaranty?
- How does a lender correct a material error in the E-Tran submission after receiving an authorization?
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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