{"ok":true,"canonical_url":"https://dealroom.so/glossary/termination-clause","api_url":"https://dealroom.so/api/public/glossary/termination-clause","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":"termination-clause","term":"Termination clause","group":"People and paperwork","definition":"A provision in a contract that outlines the conditions under which the agreement can be ended by one or both parties. This protects you by specifying scenarios where you can walk away from a deal.","what_it_means":"Your Letter of Intent (LOI) and purchase agreement will contain termination clauses. These typically cover breaches of contract, failure to meet due diligence contingencies, or inability to secure financing. Understand your rights and obligations to terminate to avoid penalties or being forced into a bad deal.","url":"https://dealroom.so/glossary/termination-clause","official_sources":[],"related":[{"slug":"loi","term":"LOI","url":"https://dealroom.so/glossary/loi"},{"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":"nda-buyer-verification","term":"NDA","url":"https://dealroom.so/glossary/nda-buyer-verification"}],"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":"What if a proposed franchise agreement includes a clause restricting the borrower's operational control or management?","url":"https://dealroom.so/for-lenders/questions/what-if-a-proposed-franchise-agreement-includes-a-clause-restricting-the-borrower-s-operat"},{"question":"Can a seller note on full standby have an acceleration clause if the business defaults on the SBA loan?","url":"https://dealroom.so/for-lenders/questions/can-a-seller-note-on-full-standby-have-an-acceleration-clause-if-the-business-defaults-on-"},{"question":"What specific franchise agreement clauses are generally unacceptable to the SBA and could prevent financing?","url":"https://dealroom.so/sba-7a/questions/what-specific-franchise-agreement-clauses-are-generally-unacceptable-to-the-sba-and-could-"},{"question":"What specific types of clauses in a franchise agreement would constitute \"undue control\" by the franchisor, rendering it ineligible for 7(a) financing?","url":"https://dealroom.so/for-lenders/questions/what-specific-types-of-clauses-in-a-franchise-agreement-would-constitute-undue-control-by-"}]},"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 — Termination clause","url":"https://dealroom.so/glossary/termination-clause","source_type":"DealRoom Data"}}