Can I be forced to pay a break fee even if I had a good reason to walk away?

Break fees aren't a standard or automatic feature of business-sale LOIs in Ontario — they're uncommon in smaller deals and only exist at all if you and the other side specifically negotiated one into the document. If your LOI doesn't contain a break fee clause, there's generally nothing forcing you to pay one just for walking away, regardless of your reason.

If a break fee clause was included, whether "a good reason" changes anything depends entirely on how that specific clause was drafted. Some break fees are written to apply whenever a party terminates, without carving out exceptions for cause; others are drafted with specific exceptions, for example if the other side breached the LOI first, or if a defined condition, such as a due diligence finding, wasn't met. There's no general legal principle that automatically excuses payment because you had good reason — the clause itself is what governs.

Given how much this turns on precise wording, and how easily a broadly drafted break fee clause can catch a party off guard, have a Treadstone business lawyer review any break fee language before you sign, not after the other side is demanding payment.