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Buying & Selling a Business

Can I get out of the deal if the seller hid that a key customer was about to leave?

TSL Written by the Treadstone Law team· Updated August 2026

This depends heavily on timing. If you discover this before closing, the question is whether it triggers an existing closing condition or a material-adverse-change right in your agreement — a hidden, material fact about the customer base can potentially support delaying or refusing to close if the agreement's conditions are broad enough to capture it, or support refusing to close on the basis that the seller's representations aren't accurate as of the closing date, tying into the bring-down certificate discussed elsewhere.

If the deal has already closed by the time you learn about this, the path shifts entirely — you'd generally be looking at an indemnity or misrepresentation claim under the purchase agreement instead, subject to whatever survival period, cap, and basket apply, rather than a right to unwind the transaction itself. These are genuinely different legal routes with different available outcomes, so identifying exactly when you learned of this relative to closing, and what the agreement says about both conditions and representations, is the necessary first step.

Key takeaways

  • Discovering this before closing points toward a condition or MAC right, not a claim.
  • Discovering it after closing shifts you toward an indemnity or misrepresentation claim instead.
  • The two paths have genuinely different available outcomes.
  • Pin down exactly when you learned of this relative to the closing date.
This is general information, not legal advice. It doesn’t create a lawyer–client relationship, and the rules can change. For advice on your situation, a Treadstone business lawyer can help.
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