{"ok":true,"canonical_url":"https://dealroom.so/glossary/breach-of-contract","api_url":"https://dealroom.so/api/public/glossary/breach-of-contract","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"breach-of-contract","term":"Breach of Contract","group":"People and paperwork","definition":"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":"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.","url":"https://dealroom.so/glossary/breach-of-contract","official_sources":[],"related":[{"slug":"loan-agreement","term":"Loan agreement","url":"https://dealroom.so/glossary/loan-agreement"},{"slug":"non-compete","term":"Non-compete","url":"https://dealroom.so/glossary/non-compete"},{"slug":"due-diligence","term":"Due diligence","url":"https://dealroom.so/glossary/due-diligence"},{"slug":"liability","term":"Liability","url":"https://dealroom.so/glossary/liability"}],"related_questions":[{"question":"How does a lender determine affiliation when a prior owner retains less than 20% equity and a consulting contract?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-determine-affiliation-when-a-prior-owner-retains-less-than-20-equity-and"},{"question":"Can I use an SBA 7(a) loan to acquire a business that relies heavily on independent contractors instead of employees?","url":"https://dealroom.so/sba-7a/questions/can-i-use-an-sba-7-a-loan-to-acquire-a-business-that-relies-heavily-on-independent-contrac"},{"question":"What happens if a significant portion of the acquired business's revenue is generated from government contracts?","url":"https://dealroom.so/sba-7a/questions/what-happens-if-a-significant-portion-of-the-acquired-business-s-revenue-is-generated-from"},{"question":"Can the value of customer contracts or recurring revenue streams count as collateral for an SBA loan?","url":"https://dealroom.so/sba-7a/questions/can-the-value-of-customer-contracts-or-recurring-revenue-streams-count-as-collateral-for-a"},{"question":"Can an SBA 7(a) loan finance the intangible assets of a service business, such as client lists or recurring contracts?","url":"https://dealroom.so/sba-7a/questions/can-an-sba-7-a-loan-finance-the-intangible-assets-of-a-service-business-such-as-client-lis"},{"question":"What specific conditions trigger affiliation due to contractual relationships or franchise agreements?","url":"https://dealroom.so/for-lenders/questions/what-specific-conditions-trigger-affiliation-due-to-contractual-relationships-or-franchise"}]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — Breach of Contract","url":"https://dealroom.so/glossary/breach-of-contract","source_type":"DealRoom Data"}}