Can I back out of a business purchase in BC if due diligence turns up problems?

This answer covers the law of British Columbia.

Whether you can back out depends on what your contract says and on the facts, so the exact wording of any due diligence condition matters. The wording and deadlines of that condition matter most. What happens to your deposit if you walk away depends on the contract and the facts, so it is worth confirming with a lawyer.

If a buyer or seller faces forfeiture of a deposit, a BC court may relieve against penalties and forfeitures on terms it sees fit. The Law and Equity Act has no dedicated deposit rules. If the sale includes land or a lease, a contract respecting land is not enforceable unless there is a signed writing, an act or acquiescence by the party to be held, or reasonable reliance making enforcement necessary to avoid unfairness, and paying or accepting a deposit counts as such an act.

Problems you find, such as an unexpected lien, can often be a reason to renegotiate the price or require the seller to clear it before closing. Check what your conditions say and when they expire, then get legal advice before you act.