What happens if the buyer's financing falls through during the exclusivity period?

Unless your LOI specifically ties the exclusivity obligation to the buyer maintaining their financing, the seller's restriction against talking to other buyers generally continues to run for the full stated period regardless of the buyer's financing troubles. Exclusivity clauses are usually written around a fixed time period, not around the buyer continuing to meet particular conditions, so a financing setback on the buyer's side doesn't automatically release the seller from what they agreed to.

This is a common way sellers end up stuck: tied up for weeks while a buyer scrambles to fix a financing problem, unable to talk to other interested parties, with no clear mechanism forcing the process to end early even though the deal's prospects have clearly weakened. If your LOI doesn't address this scenario directly, there's often no automatic remedy — just the exclusivity period continuing to run its course.

Sellers who want protection against exactly this situation should negotiate it into the LOI upfront: a condition that exclusivity depends on the buyer maintaining financing readiness, or a right to terminate exclusivity early if specific milestones aren't hit. A Treadstone business lawyer can help build that protection in before you sign, rather than discovering the gap once financing actually falls through.