{"ok":true,"canonical_url":"https://dealroom.so/glossary/contract-termination","api_url":"https://dealroom.so/api/public/glossary/contract-termination","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":"contract-termination","term":"Contract termination","group":"People and paperwork","definition":"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":"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.","url":"https://dealroom.so/glossary/contract-termination","official_sources":[],"related":[{"slug":"supplier-agreement","term":"Supplier agreement","url":"https://dealroom.so/glossary/supplier-agreement"},{"slug":"legal-liability","term":"Legal liability","url":"https://dealroom.so/glossary/legal-liability"},{"slug":"change-of-ownership","term":"Change of ownership","url":"https://dealroom.so/glossary/change-of-ownership"},{"slug":"due-diligence","term":"Due diligence","url":"https://dealroom.so/glossary/due-diligence"}],"related_questions":[{"question":"How does the SBA review franchise agreements for compliance if there are unusual clauses regarding termination or transfer?","url":"https://dealroom.so/sba-7a/questions/how-does-the-sba-review-franchise-agreements-for-compliance-if-there-are-unusual-clauses-r"},{"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"}]},"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 — Contract termination","url":"https://dealroom.so/glossary/contract-termination","source_type":"DealRoom Data"}}