# Break fee

Money one side owes the other for walking away from a signed deal.

It is rare at this deal size and it turns up in two places worth watching for. A seller who has been burned before may ask for one inside the exclusivity period, which converts your right to walk after diligence into a priced option. And a [purchase agreement](https://searchspheresource.com/glossary/purchase-agreement) may carry one running the other way, payable if the seller takes a better offer. Either version is negotiable and both are worth reading against the deposit: a large [earnest money](https://searchspheresource.com/glossary/earnest-money) deposit that is non-refundable after a date is a break fee wearing different clothes.

In numbers: A $125,000 break fee on a $5 million deal is 2.5% of the price, owed whether or not diligence ever started.

Source: https://searchspheresource.com/glossary/break-fee
Not dated: A definition is editorial: what a term means, why it matters, and an example. None of it reads a source that can go stale, so there is no date to take and a stamped one would be the build time wearing a costume.

Site index for machines: https://searchspheresource.com/llms.txt