A non-circumvention agreement is a US legal contract that protects parties in a business deal by prohibiting unauthorized direct interactions. So, it prevents the parties from getting deprived of the compensation associated with their respective involvements in the business. Let us delve deeper and learn more about a non-circumvention agreement below.
A non-circumvention agreement is a contract put into place to protect parties participating in a business deal. Non-circumvention agreements are signed to prevent a business from bypassing, or ‘circumventing’, another business and to guarantee full compensation will be received by the business doing work for or with another.
In many business deals, one party may introduce another party to its customers, vendors, or another high-value party during a transaction. By giving a party this exposure, a business may worry they will be ‘cut out’ of a deal. This is exactly why the non-circumvention agreement was created.
This agreement is often used in partner arrangements where one party may not show signs of trustworthiness or possibly it is just a precaution taken when someone new or unknown is being worked with.
There are agreements that are similar to a non-circumvention agreement which are listed below:
All parties must know their requirements when approaching a lawyer for a non-circumvention agreement. Here are a few more things that they should keep in mind before going for a legal professional to work on the legal document:
When writing a non-circumvention agreement, you will want to include the essential sections below:
Non-circumvention agreements are great tools to have when working with partners outside of your direct company or circle of partners. As with any contract though these agreements have good sides and potential bad sides. See below for details:
It is guaranteed that personal or confidential information cannot be released outside of or used against the business.
There is legal assurance that if a violation occurs the party that broke the agreement can be sued and may be demanded to pay money for damages.
Promised payments per the agreement are required to be made to each party who performed work responsibly even if there is some sort of minor dispute.
The party being restricted may be subject to a long-time constraint that might prevent the ability to work in similar areas of business even when the agreement ends.
Although there are sections in the agreement requiring parties to keep information confidential and not to trade secrets, it can be difficult to control their business actions once the assignment is complete and even while it is still active.
An excellently drafted non-circumvention agreement is required to ensure all necessary sections and details are included and useful for the future. This can ultimately take up a lot of time and money to get it done right by a legal professional.
Yes, a non-circumvention contract is a legally binding agreement. This type of agreement guarantees that a party who has been wronged by a breach can sue another business partner.
There are several sections in these agreements that represent legal requirements and what as well as where legal action will be taken if it comes down to that.
Brokers act on behalf of their clients and may be perceived to not do much in certain business deals. For this reason, they are susceptible to instances of circumvention. Due to the small role agents may play in a business transaction they safeguard themselves and their clients by putting a non-circumvention agreement into place.
A partnership becomes a joint venture when three or more parties come together to carry out business. When brokers enter into a joint venture it is done with the intention of being paid commissions or some other form of award for services performed. A non-circumvention agreement will benefit you as a broker in this scenario by guaranteeing your payment is received once your work is done.
Read this article on non-circumvention agreements and brokers.
A non-circumvention agreement is paramount for parties often associated with various business deals. It is because the legal document helps protect each party's respective rights and obligations without depriving them of any requirements or benefits. However, everyone must be careful while signing such an agreement and check the terms without fail. The parties may also consider approaching a professional attorney with experience working on non-circumvention agreements earlier.
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My name is Ryenne Shaw and I help business owners build businesses that operate as assets instead of liabilities, increase in value over time and build wealth. My areas of expertise include corporate formation and business structure, contract law, employment/labor law, business risk and compliance and intellectual property. I also serve as outside general counsel to several businesses across various industries nationally. I spent most of my early legal career assisting C.E.O.s, General Counsel, and in-house legal counsel of both large and smaller corporations in minimizing liability, protecting business assets and maximizing profits. While working with many of these entities, I realized that smaller entities are often underserved. I saw that smaller business owners weren’t receiving the same level of legal support larger corporations relied upon to grow and sustain. I knew this was a major contributor to the ceiling that most small businesses hit before they’ve even scratched the surface of their potential. And I knew at that moment that all of this lack of knowledge and support was creating a huge wealth gap. After over ten years of legal experience, I started my law firm to provide the legal support small to mid-sized business owners and entrepreneurs need to grow and protect their brands, businesses, and assets. I have a passion for helping small to mid-sized businesses and startups grow into wealth-building assets by leveraging the same legal strategies large corporations have used for years to create real wealth. I enjoy connecting with my clients, learning about their visions and identifying ways to protect and maximize the reach, value and impact of their businesses. I am a strong legal writer with extensive litigation experience, including both federal and state (and administratively), which brings another element to every contract I prepare and the overall counsel and value I provide. Some of my recent projects include: - Negotiating & Drafting Commercial Lease Agreements - Drafting Trademark Licensing Agreements - Drafting Ambassador and Influencer Agreements - Drafting Collaboration Agreements - Drafting Service Agreements for service-providers, coaches and consultants - Drafting Master Service Agreements and SOWs - Drafting Terms of Service and Privacy Policies - Preparing policies and procedures for businesses in highly regulated industries - Drafting Employee Handbooks, Standard Operations and Procedures (SOPs) manuals, employment agreements - Creating Employer-employee infrastructure to ensure business compliance with employment and labor laws - Drafting Independent Contractor Agreements and Non-Disclosure/Non-Competition/Non-Solicitation Agreements - Conducting Federal Trademark Searches and filing trademark applications - Preparing Trademark Opinion Letters after conducting appropriate legal research - Drafting Letters of Opinion for Small Business Loans - Drafting and Responding to Cease and Desist Letters I service clients throughout the United States across a broad range of industries.