{"ok":true,"canonical_url":"https://dealroom.so/glossary/termination-clauses","api_url":"https://dealroom.so/api/public/glossary/termination-clauses","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-clauses","term":"Termination Clauses","group":"Doing the deal","definition":"These clauses define conditions under which a contract, like an LOI or purchase agreement, can be ended. As a buyer, understand these to know when you can walk away from a deal without penalty or when the seller can.","what_it_means":"Pay close attention to termination clauses in the Letter of Intent (LOI) and the definitive Purchase Agreement. They often outline specific deadlines, due diligence failures, or financing contingencies that allow either party to terminate. Ensure your financing contingency is robust, especially for an SBA 7(a) loan.","url":"https://dealroom.so/glossary/termination-clauses","official_sources":[],"related":[{"slug":"loi","term":"LOI","url":"https://dealroom.so/glossary/loi"},{"slug":"due-diligence","term":"Due diligence","url":"https://dealroom.so/glossary/due-diligence"},{"slug":"escrow-holdback","term":"Escrow / holdback","url":"https://dealroom.so/glossary/escrow-holdback"},{"slug":"loan-agreement","term":"Loan agreement","url":"https://dealroom.so/glossary/loan-agreement"}],"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 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 Clauses","url":"https://dealroom.so/glossary/termination-clauses","source_type":"DealRoom Data"}}