{"ok":true,"canonical_url":"https://dealroom.so/glossary/undue-influence","api_url":"https://dealroom.so/api/public/glossary/undue-influence","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":"undue-influence","term":"Undue Influence","group":"People and paperwork","definition":"When one party improperly pressures or manipulates another into making a decision against their best interest. This can invalidate agreements and is a red flag in any business transaction.","what_it_means":"In an acquisition, be wary of situations where the seller or another party might be coercing you into unfavorable terms. This also applies to the seller's original business formation. Lenders want to see that all parties entered into agreements freely. Ensure all your decisions are independent and well-researched.","url":"https://dealroom.so/glossary/undue-influence","official_sources":[],"related":[{"slug":"intentional-misrepresentation","term":"Intentional misrepresentation","url":"https://dealroom.so/glossary/intentional-misrepresentation"},{"slug":"conflict-of-interest","term":"Conflict of interest","url":"https://dealroom.so/glossary/conflict-of-interest"},{"slug":"arm-s-length","term":"Arm's length","url":"https://dealroom.so/glossary/arm-s-length"},{"slug":"good-character","term":"Good character","url":"https://dealroom.so/glossary/good-character"}],"related_questions":[{"question":"What specific limitations must a lender impose on a seller's post-closing consulting agreement to ensure it does not imply retained control or undue influence?","url":"https://dealroom.so/for-lenders/questions/what-specific-limitations-must-a-lender-impose-on-a-seller-s-post-closing-consulting-agree"},{"question":"What factors primarily influence the premium cost of business life insurance?","url":"https://dealroom.so/sba-7a/questions/what-factors-primarily-influence-the-premium-cost-of-business-life-insurance"},{"question":"When does a franchisor's influence, even without ownership, trigger affiliation for the franchisee?","url":"https://dealroom.so/for-lenders/questions/when-does-a-franchisor-s-influence-even-without-ownership-trigger-affiliation-for-the-fran"},{"question":"What issues in a franchise agreement typically lead to a determination of 'undue control' by the franchisor?","url":"https://dealroom.so/for-lenders/questions/what-issues-in-a-franchise-agreement-typically-lead-to-a-determination-of-undue-control-by"},{"question":"Can a seller's post-closing consulting agreement influence the standby status of their seller note?","url":"https://dealroom.so/sba-7a/questions/can-a-seller-s-post-closing-consulting-agreement-influence-the-standby-status-of-their-sel"},{"question":"Can the seller's post-closing consulting agreement influence the standby status of their seller note?","url":"https://dealroom.so/sba-7a/questions/can-the-seller-s-post-closing-consulting-agreement-influence-the-standby-status-of-their-s"}]},"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 — Undue Influence","url":"https://dealroom.so/glossary/undue-influence","source_type":"DealRoom Data"}}