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Non-Circumventing Business Agreement

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NON-CIRCUMVENTING BUSINESS AGREEMENT

This Non-Circumventing Business Agreement (the "Agreement") is made and entered into as of Effective Date: by and between Client Name: , having its principal place of business at Address: , and Introducer Name: , having its principal place of business at Address: . Client Name and Introducer Name are each referred to herein as a "Party" and collectively as the "Parties."

RECITALS

WHEREAS, Introducer Name possesses relationships, contacts and information regarding third parties (each an "Introduced Party") that may be useful to Client Name in connection with certain potential business transactions described as: (the "Transaction");

WHEREAS, Client Name desires to receive introductions to Introduced Parties and expects to compensate Introducer Name as set forth herein; and

WHEREAS, the Parties desire to protect the benefits of those introductions and to prevent circumvention, direct dealing or other conduct that would avoid payment of agreed compensation.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein and other good and valuable consideration, the sufficiency of which is acknowledged, the Parties agree as follows:

1. DEFINITIONS

1.1 "Introduced Party" means any third party introduced by Introducer Name to Client Name, whether introduced directly or indirectly, orally or in writing, including any affiliate, successor or related entity of such third party.

1.2 "Circumvent" or "Circumvention" means any act or omission by Client Name, its affiliates, representatives, agents, employees, successors or assigns that results in the avoidance, reduction or elimination of payments or other benefits owed to Introducer Name in connection with any Transaction originating from an introduction by Introducer Name, including but not limited to direct negotiation, contracting, referral, or engagement with an Introduced Party without prior written notice to and written agreement with Introducer Name.

2. NON-CIRCUMVENTION

2.1 During the Term and for a period of years following termination or expiration of this Agreement, Client Name shall not, directly or indirectly, contact, solicit, negotiate with, contract with, engage or otherwise deal with any Introduced Party in respect of the Transaction without the prior written consent of Introducer Name or without paying the compensation described in Section 4.

2.2 Client Name shall promptly notify Introducer Name in writing of any contact initiated by an Introduced Party, and shall not take any action that could materially modify or avoid the commission or fee obligations owed to Introducer Name.

3. CONFIDENTIALITY

3.1 Each Party agrees to maintain in strict confidence all non-public information disclosed by the other Party in connection with the Transaction ("Confidential Information") and shall not disclose such Confidential Information to any third party except to its employees, agents or professional advisors with a need to know and who are bound by obligations of confidentiality no less protective than those set forth herein.

3.2 Confidential Information shall not include information which (a) is or becomes generally available to the public through no breach of this Agreement, (b) is rightfully received from a third party without restriction, or (c) is independently developed by the receiving Party without use of the disclosing Party's Confidential Information.

4. COMPENSATION; PAYMENT

4.1 As consideration for introductions and the protection against Circumvention, Client Name shall pay Introducer Name a commission equal to % of the Gross Consideration actually received by Client Name, or a flat fee of where applicable, for each Transaction with an Introduced Party.

4.2 "Gross Consideration" means the total cash and cash-equivalents received by Client Name in respect of the Transaction, exclusive of taxes, shipping and third-party pass-through costs. Payment of any commission shall be made within days after Client Name receives such Gross Consideration, together with a statement identifying the amount and basis of the commission.

4.3 If Client Name fails to pay any amounts when due, Introducer Name shall be entitled to recover interest at the lesser of 1.5% per month or the maximum rate permitted by law, plus costs and attorneys' fees incurred in collecting such amounts.

5. TERM AND TERMINATION

5.1 This Agreement shall commence on the Effective Date and shall continue for a period of years (the "Term"), unless earlier terminated by mutual written agreement.

5.2 Termination shall not affect rights or obligations accrued prior to termination, including the obligation to pay commissions for Transactions initiated during the Term and consummated afterwards, and the non-circumvention and confidentiality obligations shall survive termination as provided elsewhere in this Agreement.

6. REMEDIES

6.1 The Parties acknowledge that a breach of the covenants contained in Sections 2 and 3 would cause irreparable harm for which monetary damages would be an inadequate remedy. Accordingly, in addition to any other remedies available at law or in equity, the non-breaching Party shall be entitled to injunctive relief to enforce the provisions of this Agreement without the necessity of posting bond.

6.2 The Parties further agree that, in the event of Circumvention, Introducer Name shall be entitled to recover actual damages plus any commissions that would have been payable, together with attorneys' fees and costs reasonably incurred.

7. INDEMNIFICATION

7.1 Each Party (the "Indemnifying Party") shall indemnify, defend and hold harmless the other Party (the "Indemnified Party") from and against any losses, liabilities, damages, claims and expenses (including reasonable attorneys' fees) arising out of the Indemnifying Party's breach of this Agreement, willful misconduct or gross negligence.

8. RELATIONSHIP OF THE PARTIES

8.1 Nothing in this Agreement shall create a partnership, joint venture, agency, employment or fiduciary relationship between the Parties. Introducer Name is retained solely to introduce potential transaction counterparties and is not authorized to bind Client Name.

9. NOTICES

9.1 All notices under this Agreement shall be in writing and shall be deemed given when delivered personally, by certified mail (return receipt requested), nationally recognized overnight courier, or by electronic mail with confirmation, to the addresses set forth above or to such other address as a Party may designate in writing.

10. ASSIGNMENT; BINDING EFFECT

10.1 Neither Party may assign or transfer its rights or obligations under this Agreement without the prior written consent of the other Party, except that either Party may assign to an affiliate or successor by merger or acquisition provided that the assigning Party remains liable for its obligations under this Agreement.

11. AMENDMENT; WAIVER

11.1 No amendment to this Agreement shall be effective unless in writing and signed by both Parties. No waiver of any breach or default shall constitute a waiver of any other right hereunder unless expressly agreed in writing.

12. GOVERNING LAW; JURISDICTION

12.1 This Agreement shall be governed by and construed in accordance with the laws of the State of , without regard to choice of law principles. The Parties submit to the exclusive jurisdiction of the state and federal courts located in that State for any dispute arising under or in connection with this Agreement.

13. ENTIRE AGREEMENT

13.1 This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior discussions, understandings and agreements, whether written or oral.

14. SEVERABILITY

14.1 If any provision of this Agreement is held invalid or unenforceable, the remaining provisions shall remain in full force and effect and such invalid or unenforceable provision shall be replaced by a valid provision that most closely captures the Parties' original intent.

15. COUNTERPARTS; SIGNATURES

15.1 This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one instrument. Signatures transmitted by electronic means shall be deemed original signatures for all purposes.

ADDITIONAL INFORMATION

Client Name:

By:

Date:

Introducer Name:

By:

Date:

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What a Non-Circumventing Business Agreement Is and When Parties Use It

A Non-Circumventing Business Agreement is a bilateral or multilateral contract that prevents one party from bypassing another to engage directly with introduced clients, suppliers, or business opportunities. It defines the relationships, covered introductions, permitted interactions, geographic or temporal limits, and remedies for bypassing. These agreements are commonly used alongside confidentiality or referral agreements to preserve intermediary compensation, protect brokered deals, and document exclusive referral channels. They are private contracts governed by state law and can be executed electronically or on paper when the parties agree to the format.

Why Parties Rely on a Non-Circumventing Business Agreement

The agreement preserves the introducer’s economic interests, clarifies who may contact specific leads or vendors, and sets remedies for unauthorized contacts. It reduces commercial friction by allocating responsibility and expectation early in a transaction.

Why Parties Rely on a Non-Circumventing Business Agreement

Typical Users and Organizational Roles Involved

Use the agreement when introductions create tangible commercial value and parties want a clear contractual remedy if a counterparty seeks to bypass the introducer.

  • Independent brokers and finders who introduce buyers, sellers, or suppliers and need contractual protection for commissions or fees.
  • Sales teams and business development professionals coordinating partner or channel introductions that must be memorialized.
  • Corporate counsels and procurement managers who approve contractual terms governing third-party introductions and compensation.

Who Typically Signs These Agreements

Business Owner

A small business owner or principal who relies on intermediaries for leads and needs a simple contractual mechanism to ensure intermediaries are paid and not bypassed; often signs as a party and counterparty to the agreement.

Corporate Counsel

An in-house lawyer or outside counsel who reviews language on non-circumvention scope, remedies, and governing law to align the agreement with corporate policy and risk tolerance, and who confirms signature authority.

Core Clauses Every Professional Agreement Should Include

A concise, enforceable non-circumventing clause resides within a broader contract structure that identifies parties, scope, time limits, remedies, and dispute resolution to reduce ambiguity and improve enforceability.

Parties

Full legal names and entity types for each party, including any DBAs; use company legal names to avoid later identity disputes and to ensure enforceability against the correct legal entity.

Scope of Introductions

Clear definition of what counts as an introduction (contacts, leads, suppliers) and which persons, accounts, products, or regions are covered to prevent overbroad or vague enforcement issues.

Non-Circumvention Clause

Explicit prohibition on direct contact or transactions with introduced parties for the specified term and remedies for violations, including payment formulas and injunctive relief.

Term and Duration

Start and end dates for the non-circumvention obligation and any survival provisions; avoid indefinite terms unless narrowly justified and agreed by both parties.

Remedies

Agreed damages, fee schedules, liquidated damages if appropriate, and entitlement to injunctive relief; specify mitigation requirements and notice periods for alleged breaches.

Dispute Resolution

Choice of law, forum selection, and alternative dispute resolution (mediation/arbitration) wording to reduce litigation cost and provide predictability.

Essential Legal and Security Considerations to Note

ESIGN / UETA: 15 U.S.C. ch. 96; UETA 1999
HIPAA (if applicable): BAA required for PHI
Data Encryption: TLS 1.2/1.3 in transit
At-Rest Encryption: AES-256 encryption
Audit Trail: Tamper-evident timestamp log
Certifications: SOC 2 Type II; ISO 27001

Step-by-Step: How to Complete the Agreement

Follow a consistent sequence to reduce errors: identify parties, define introductions and covered contacts, set term and remedies, obtain authorized signatures, and preserve an executed copy for records.

  • 01
    Identify Parties: Enter full legal names and entity types for all parties.
  • 02
    Define Scope: List introductions, accounts, or suppliers covered and exclusions.
  • 03
    Set Term: Specify effective date and expiration or survival provisions.
  • 04
    Sign and Record: Ensure authorized signers sign and store an executed copy.

Configuring an Online Signing Workflow

Set up a clear digital workflow to preserve signing order, authentication, and retention for audit purposes when using an eSignature platform.

Recipient Order Sequential or parallel routing as needed
Required Fields Mark signatures, dates, and printed names mandatory
Authentication Level Choose email, SMS code, or stronger KBA if needed
Reminders & Expiry Set automatic reminders and link expiry
Template Naming Use descriptive template names for reuse

Digital Signing and Distribution Considerations

Select an eSignature provider that meets the contract’s legal and security requirements and preserves a tamper-evident audit trail for all signing events.

  • File Formats: PDF, DOCX, and HTML supported
  • Integrations: Salesforce, NetSuite, Google Workspace
  • Compliance: ESIGN, UETA, SOC 2 support

Where to Send, Sign, and Store the Executed Agreement

A predictable routing and storage process reduces disputes: circulate to parties, obtain signatures, confirm execution, and archive copies for both operational and legal needs.

  • Send to Parties: Upload and email or share a signing link with each party.
  • Authenticate Signers: Use agreed authentication method prior to accepting signature.
  • Capture Signatures: Signatures and timestamps recorded in the audit trail.
  • Archive Executed Copy: Store signed PDF plus the platform’s completion certificate.

Common Timeframes and Notice Requirements to Expect

Include clear dates in the agreement for effectiveness, notice, and cure windows to reduce ambiguity and improve enforceability in case of disputes.

Effective Date:

The date from which the non-circumvention obligation begins.

Term Length:

Typical terms: 6–36 months depending on industry and deal lifecycle.

Notice Period:

Specify days required for breach notice (commonly 10–30 days).

Cure Period:

Allow a reasonable cure period before seeking remedies.

Statute Consideration:

Preserve dates needed for any statute-of-limitations analysis.

Common Drafting and Execution Mistakes to Avoid

  • Vague scope language that fails to identify covered contacts or geographic limits, which can render the clause unenforceable.
  • Omitting explicit consideration or payment terms so courts may find the agreement lacks enforceable consideration.
  • Using indefinite or perpetual terms without clear justification, creating risk of courts limiting duration as unreasonable.
  • Relying on unsigned or poorly authenticated electronic signatures without an auditable trail or clear consent to e-sign.

Risks and Potential Consequences of Non-Compliance

Breach Remedies: Monetary damages and injunctive relief possible
Attorney Fees: Contract may allocate fees to prevailing party
Reputational Harm: Loss of trust with referral sources
Tax Consequences: Unreported commissions may affect filings
Enforceability Risk: Overbroad clauses may be voided by courts
Contract Voidance: Material defects could render agreement void

Representative Use Cases and How Organizations Apply the Agreement

Real-world examples show how intermediaries and companies use non-circumvention clauses to protect fees, streamline introductions, and document responsibilities.

Optica Ventures (COO)

A venture firm introduced strategic partners for portfolio exits

  • Introductions led to multi-party negotiations
  • "The interface is simple and easy-to-use for our team; more importantly, it is just as easy for our customers."

Tech Data (CEO)

A distributor formalized referral pathways with vendors

  • Agreement clarified fee entitlement on closed sales
  • "Tech Data uses airSlate SignNow to improve our internal and external customer service while increasing our speed to revenue."

Comparison: Common eSignature Providers for Executing Agreements

Representative plan and capability differences among common eSignature providers. Place signNow first per platform comparison conventions; verify plan specifics with each vendor before purchase.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial 7-day free trial Varies by plan Varies by plan Varies by plan Varies by plan
Bulk Send Yes Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No

Frequently Asked Questions and Practical Answers

Answers to common legal and execution questions about non-circumventing agreements, electronic signatures, and practical steps to reduce enforceability risk.


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