A Non-Circumvention Agreement ensures that in the event that the disclosing party's business contacts are revealed to the recipient, those contacts will remain confidential. The recipient cannot go behind the disclosing party's back and circumvent its business to engage directly with those contacts.
Once this agreement is signed by all parties, the violating party will be liable to pay for penalty fees of the amount that the disclosing party would have received had the contract not been violated, and even more in some cases.
A Non-Circumvention Agreement should include provisions that (i) require amendments (changes) to the agreement to be in writing and signed by both parties, (ii) specify the state laws that will govern and interpret disputes between the parties regarding the matters covered by the agreement, and (iii) prohibit the parties from assigning their obligations under the agreement to third parties. Generally, the state laws that govern the agreement should be the state of the disclosing party or the recipient.
