Non-Circumvention Agreement in a Nutshell

Standardized Legal Documents Non-Circumvention Agreement in a Nutshell

Write a Bullet-Proof Non-Circumvention Agreement 

Individuals entering business deals often use non-circumvention agreements to protect themselves from foul play. You should consider using one if you are collaborating with someone for the first time or don’t trust the other party. 

While non-circumvention agreements depend on the business type, personal requirements, and particular state laws, they all have a specific structure.

DoNotPay will teach you how to write a contract and present alternative ways of getting a bullet-proof non-circumvention agreement!

A Non-Circumvention Agreement Explained

The purpose of a non-circumvention agreement is to prevent one or more parties from being overlooked in a transaction, leaving them without proper compensation for their work or involvement. Parties that sign the agreement promise not to conspire to cut out the protected party from the deal. 

Non-circumvention agreements also ensure that intellectual property revealed during negotiations will be safe. Many businesses choose to protect themselves further by adding confidentiality and non-disclosure clauses. 

If the restricted parties breach the agreement, the protected party can sue them for damages. 

In the table below, you can check out the common situations where non-circumvention agreements are necessary:

Partners Entering a Joint Business Venture

If more parties enter a business deal together, one party may feel disposable when moving the transaction forward. The endangered party is either easily replaceable or has only served as an intermediary for introducing other participants. In those cases, the vulnerable party often asks for a non-circumvention agreement

Broker Acting on Behalf of the Client

Brokers often act as intermediaries on behalf of their clients. When they don’t contribute to the transaction other than introducing the parties, they are in danger of being overlooked for getting their share. As a result, brokers often use a non-circumvention agreement to cover all deals they bring to the client

What Should a Non-Circumvention Agreement Include?

Before writing a non-circumvention agreement, you should know what sections to incorporate. All the paragraphs listed below are essential and mustn’t be overlooked:

  1. Terms of agreement
  2. Contacts defined as valuable and exclusive
  3. Fee or commission agreements
  4. Liquidated damages
  5. Confidentiality clause
  6. Non-disclosure section
  7. Governing law
  8. Attorney fees
  9. Entire agreement section

Terms of Agreement

This section should outline the duration of the agreement, including:

  • The period during which the agreement will be valid 
  • Possibility of automatic contract renewal after the completion of transactions
  • Method of managing term amendments

Valuable and Exclusive Contacts

This paragraph deals with contact confidentiality and explains which information should remain confidential between parties. Try to be specific when describing them.

Fee or Commission Agreements

You should use this section to list the terms of your fee and commission agreements. If you have already established fees for specific services, you should present them in detail. You can also leave this section open for future changes.

Liquidated Damages

This section defines the penalties for violating the agreement. You can adjust them to your particular situation.

Non-Disclosure Section

You can add a non-disclosure paragraph to prevent the involved parties from revealing any information related to your business. Include anything you wish to keep confidential in this section, such as contacts, patents, trade secrets, and intellectual property.

Confidentiality Clause

This is not a mandatory part of a non-circumvention agreement but provides a higher level of security of your confidential data. A confidentiality clause requires the involved parties to actively protect confidential information that could harm your business. 

Governing Law

This paragraph should state that the terms of the agreement comply with the particular state law.

Attorney Fees

You should indicate that if a dispute over the agreement reaches the court, the losing party must pay for legal expenses.

Entire Agreement Section

This section lists individuals related to each party. You can include a provision requiring all participants to ensure that agents, contractors, and employees comply with the agreement. All involved parties must sign the agreement and the added amendments. 

Other Ways of Creating a Non-Circumvention Agreement

If you don’t feel confident drafting a contract yourself, you can choose between:

Attorneys are more than qualified to draw up a legally binding non-circumvention agreement. They are familiar with state laws and legal terminology and can give you useful advice. The only downside is the price. Lawyers charge a lot for creating contracts, so you should be sure that their services are necessary before breaking the bank.

The other more affordable option is to use an online contract template. Online contract forms are free and easily accessible but include general terms that don’t apply to specific situations. You should select the one that meets your needs and ask for a professional opinion upon completion.

Draw Up Numerous Legal Documents With DoNotPay!

Besides teaching you how to write contracts, DoNotPay can even create some of them for you! 

Our Standardized Legal Documents feature is designed to generate contracts using the information you provide. All contracts are tailor-made and fit all legal requirements to a tee! Take a look at some of the legal docs we can draw up:

How To Create a Contract With DoNotPay 

To get your personalized contract, you have to do the following:

  1. Sign in to DoNotPay
  2. Enter the name of the document in the Search field
  3. Answer our chatbot’s questions 
  4. Download, notarize, and even fax the document from our platform!

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