What is Non-Circumvention Agreement Drafting?
A non-circumvention agreement is a legal contract that serves to protect parties, such as brokers and agents, from being eliminated from deals they helped to create. It prevents an intermediary from conducting business activities directly with suppliers or clients.
This type of contract is commonly seen in situations where companies work in the same industry and provide each other with opportunities.
If you need to draft a non-circumvention agreement, there are important key terms to include to protect your business interests.
Read the rest of this article to learn about them as well as how to draft the contract properly. We’ll also feature why it’s beneficial to hire a lawyer to draft a non-circumvention agreement for you.
What Key Terms are in a Non-Circumvention Agreement?
A non-circumvention agreement typically includes the following essential terms and clauses:
- Parties. Identify the parties involved in the agreement for clarity.
- Definition. Explain what activities will be prohibited, such as making side deals.
- Protected contacts. The agreement should specify the clients, buyers, or investors who aren’t allowed to be contacted.
- Compensation. This details the commission and payment structure if a deal is successful.
- Duration. This states how long the protective provisions remain valid, which is usually around two years.
- Exclusions. There might be contacts or relationships that were already known about prior to the agreement. These should be excluded from the agreement to prevent confusion.
- Breach remedies. The agreement must specify legal damages for violating the contract.
- Governing law and jurisdiction. This specifies the local courts or laws that will handle disputes.
- Dispute resolution. You should state how disagreements will be resolved, such as via mediation or arbitration.
What are Tips for Drafting a Non-Circumvention Agreement?
When drafting a non-circumvention agreement, you should consider some important information to provide provisions that will protect your interests and reduce ambiguity between parties.
Include a Non-Disclosure Term
It’s important to include a non-disclosure section in the agreement so that you protect private company information and data that’s exposed to parties.
Maintain a Reasonable Scope
Avoid including a geographical scope for the agreement that’s too broad. While this might be something you consider doing if you worry about general competition, it's more effective to limit the scope to a specific industry or location.
Consider Other Legal Obligations
When drafting your non-circumvention agreement, you should clearly state that the deal won’t violate other business contracts. This ensures consistency and prevents conflicting terms.
Write Down the Purpose
It’s useful to explain the business relationship and why certain opportunities are being included. This can be tied to the specific project or deal.
Clarify Non-Circumvention Obligations
State that parties aren't allowed to bypass the introducing party for their own commercial benefit. Here, it's worth describing any indirect circumvention activities so that parties have clarity about what’s prohibited.
Specify Permitted Uses
It’s important to clarify what parties are allowed to do This can include dealing with companies that weren’t introduced via the protected relationship.
Align the Agreement with all Laws
Make sure you research the applicable laws prior to drafting your non-circumvention agreement. This is because these types of contracts are usually governed by state laws, which vary regarding enforceability. A qualified lawyer can assist you with compliance concerns.
How Does a Lawyer Help With Drafting a Non-Circumvention Agreement?
Since a non-circumvention agreement needs to be clear with reasonable restrictions, a lawyer is advisable to hire to draft your contract. A lawyer can assist you by:
- Accurately defining the transaction and parties involved. This prevents ambiguity.
- Tailoring the agreement to your specific business relationships and activities.
- Setting a clear duration that’s appropriate and matches the applicable laws.
- Covering important indirect circumvention clauses. A lawyer will consider how to handle people trying to bypass the restrictions, which is something a basic contract template might not provide.
- Including confidentiality clauses. To protect your business interests, a lawyer will ensure the agreement contains confidentiality and non-disclosure obligations.
- Enforcing the agreement. A lawyer will consider all applicable laws and courts to make the agreement valid and enforceable.
- Identifying risks. A lawyer will evaluate your transaction or deal and inform you of any elements that could restrict your business or result in disputes.
- Reviewing an agreement. If you’ve already drafted a non-circumvention agreement, a lawyer can provide an in-depth review of it to ensure it’s legally valid, clear, and fair to both parties.
Where to Find a Lawyer for Non-Circumvention Agreement Drafting
If you’ve decided to use a lawyer to draft your non-circumvention agreement for you, you might wonder where to locate one who’s reputable and experienced. Calling traditional law firms might be time-consuming and you might not have the time to research lawyers. Hiring a lawyer from an online legal platform makes more sense.
ContractsCounsel is one of the biggest online legal marketplaces, making it easy to connect with a curated network of vetted lawyers. You can find and connect with a lawyer from the privacy of your home and pay a flat fee for one of them to draft a non-circumvention agreement.
To request that a lawyer on the platform drafts your agreement:
- Go to the ContractsCounsel marketplace.
- Post your project for free. You can include a few details to help you find the most suitable lawyer.
- Receive multiple bids from lawyers directly on the platform.
- Review the lawyers’ profiles. Go through the platform’s lawyer data, such as their location, client ratings for previous projects, expertise, and credentials.
- Choose a lawyer who is best suited to your requirements and hire them to draft your non-circumvention agreement.
