{"ok":true,"canonical_url":"https://dealroom.so/glossary/material-breach","api_url":"https://dealroom.so/api/public/glossary/material-breach","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":"material-breach","term":"Material Breach","group":"Doing the deal","definition":"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 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.","url":"https://dealroom.so/glossary/material-breach","official_sources":[],"related":[{"slug":"loan-agreement","term":"Loan agreement","url":"https://dealroom.so/glossary/loan-agreement"},{"slug":"due-diligence","term":"Due diligence","url":"https://dealroom.so/glossary/due-diligence"},{"slug":"commitment-letter","term":"Commitment Letter","url":"https://dealroom.so/glossary/commitment-letter"},{"slug":"escrow-holdback","term":"Escrow / holdback","url":"https://dealroom.so/glossary/escrow-holdback"}],"related_questions":[{"question":"What are the consequences if SBA Form 1919 contains material omissions or misrepresentations?","url":"https://dealroom.so/for-lenders/questions/what-are-the-consequences-if-sba-form-1919-contains-material-omissions-or-misrepresentatio"},{"question":"Can a lender approve a material change to collateral without prior SBA approval?","url":"https://dealroom.so/for-lenders/questions/can-a-lender-approve-a-material-change-to-collateral-without-prior-sba-approval"},{"question":"What constitutes a 'material adverse change' that could affect my loan approval after application?","url":"https://dealroom.so/sba-7a/questions/what-constitutes-a-material-adverse-change-that-could-affect-my-loan-approval-after-applic"},{"question":"Which material servicing actions can a 7(a) lender take without prior SBA approval?","url":"https://dealroom.so/for-lenders/questions/which-material-servicing-actions-can-a-7-a-lender-take-without-prior-sba-approval"},{"question":"How does an unapproved material servicing action impact the SBA's 7(a) loan guaranty?","url":"https://dealroom.so/for-lenders/questions/how-does-an-unapproved-material-servicing-action-impact-the-sba-s-7-a-loan-guaranty"},{"question":"How does a lender correct a material error in the E-Tran submission after receiving an authorization?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-correct-a-material-error-in-the-e-tran-submission-after-receiving-an-aut"}]},"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 — Material Breach","url":"https://dealroom.so/glossary/material-breach","source_type":"DealRoom Data"}}