Non-Circumvention Clause Explained: Six Versions to Check Before You Sign
This page is general information, not legal advice.
A non-circumvention clause stops one party from going around another to deal directly with a contact they were introduced to. It's meant to protect whoever makes the introduction: a broker who finds a buyer, an agency that brings in a supplier, or a freelancer who connects a client with a specialist. Used that way, it's reasonable. But the same clause often appears in NDAs, partnership deals and subcontracting agreements where you are the one being restricted, and the wording can reach much further than one introduction. It may block you from working with people you already knew, or from a whole industry, for years. This page covers six versions of the clause that tilt the risk. For each one you get an illustrative example, why it matters, and wording you can propose. Enforcement of restrictive clauses varies by jurisdiction, and these terms can often be negotiated.
A non-circumvention clause is different from a non-compete, which stops you from competing in a market, and a non-solicitation clause, which stops you from approaching the other side's clients or staff. See non-compete clauses explained and non-solicitation agreement red flags.
The example clauses below are illustrative. They are not taken from any real company's contract.
1. "Protected contacts" covers almost everyone
A typical clause might read: "Recipient shall not, directly or indirectly, contact or transact with any person or entity identified, mentioned or made known to Recipient by Company, or any participant in the Company's industry."
Why it works against you
A fair clause protects specific contacts that were actually introduced. "Mentioned" or "made known" can cover a name dropped in a meeting or copied on an email. "Any participant in the industry" turns the clause into something close to a non-compete. You may not know which contacts are covered until the other side claims a breach.
What to ask for instead
Sample wording to propose: "Protected Contacts means only the persons listed in Schedule [X] or identified in writing by Company as introduced under this Agreement within [10] days after the introduction."
2. A very long restriction after each introduction
A typical clause might read: "This restriction shall apply for a period of five (5) years from the date of each introduction, and shall renew upon any further communication with the Protected Contact."
Why it works against you
A long term can outlast any real value of the introduction. If the period resets every time you speak to the contact, it may never end in practice. Meanwhile your business grows, markets change and the same people may come to you through other routes. Courts in many places look at whether a restriction is reasonable in length, but you may not want to test that.
What to ask for instead
Sample wording to propose: "The restriction for each Protected Contact lasts [12] months from the date of introduction. It does not renew or extend because of later contact."
3. No exception for people you already knew
A typical clause might read: "Recipient shall not engage in any business with a Protected Contact other than through Company, regardless of any prior relationship."
Why it works against you
If you already work with a supplier or client, or meet them independently later, this wording may still treat dealing with them as a breach. "Regardless of any prior relationship" puts your existing business at risk. Without a clear carve-out, it can also be hard to prove where a relationship started.
What to ask for instead
Sample wording to propose: "This Section does not apply to any person with whom Recipient had a business relationship or documented contact before the introduction, or whom Recipient meets independently without use of Company's information. Recipient may list existing contacts in Schedule [X]."
4. Only you are restricted
A typical clause might read: "Contractor shall not circumvent Company with respect to any Company client. Nothing in this Agreement restricts Company from engaging any person introduced by Contractor."
Why it works against you
If you also bring contacts to the deal, such as subcontractors, specialists or clients of your own, a one-sided clause leaves them unprotected. The other side may hire your specialist directly or take your client without paying you, while you remain bound. This is common in agency and subcontracting setups. See agency retainer agreement red flags and subcontracting clauses explained.
What to ask for instead
Sample wording to propose: "Each party agrees not to circumvent the other with respect to Protected Contacts introduced by the other party. The same terms, period and exceptions apply to both parties."
5. Heavy liquidated damages plus an injunction
A typical clause might read: "For any breach, Recipient shall pay Company liquidated damages equal to three times the total value of any transaction with the Protected Contact, and Company shall be entitled to injunctive relief without posting bond and to recover its attorneys' fees."
Why it works against you
A fixed amount based on "the total value of any transaction" can be far larger than any commission or fee the other side would actually have earned. Adding a court order and fee-shifting can make even a weak claim expensive to defend. Courts in many places won't enforce an amount that works as a penalty, but you may still face a costly dispute. See liquidated damages clauses explained and attorneys' fees clauses explained.
What to ask for instead
Sample wording to propose: "If Recipient transacts with a Protected Contact in breach of this Section, Recipient's liability is limited to the fee or commission Company would have earned under Schedule [X] on that transaction."
6. A clause that never ends and covers related companies
A typical clause might read: "This Section shall survive termination indefinitely and shall bind Recipient and its affiliates, successors and any entity later formed or controlled by Recipient or its principals."
Why it works against you
"Indefinitely" means the restriction may outlast the deal by decades. Extending it to affiliates and "any entity later formed" can reach a company you start years from now, a business partner's firm or a buyer of your business. It can also cause problems in due diligence if you sell your company. See affiliate agreement red flags.
What to ask for instead
Sample wording to propose: "This Section survives termination for [12] months only. It binds Recipient and entities Recipient controls at the time of the introduction, and does not apply to later-formed entities or to Recipient's principals personally."
Practical tips before you share or receive contacts
Keep a dated list of the contacts you already have before you sign, and attach it if you can. Ask for introductions to be confirmed in writing so both sides know who is covered. If you're the introducer, record each introduction by email with the date. If the clause sits inside an NDA, read both together, since confidentiality and circumvention terms often overlap.
Also worth a look
Non-circumvention terms often appear in NDAs, so see NDA red flags. Check whether the deal also includes an exclusivity clause and how long confidentiality lasts under the confidentiality survival clause. For a wider checklist, see freelance contract red flags and partnership agreement red flags.
Scan your own contract free
A non-circumvention clause can decide who you're allowed to work with long after the deal ends. Upload your contract to the ScanMyTerms freelance contract review as a PDF, DOCX, TXT or MD file, photograph it (up to 30 pages), or paste the terms. In about a minute you get a list of clauses that work against you, with the risk level, the exact wording, why it hurts and how to change it. The free preview shows the risk count and the first two findings. The full report is $5 per document.
This page is general information, not legal advice. Rules on restrictive covenants and contract penalties vary by jurisdiction, so for decisions about a specific contract, talk to a qualified lawyer where you live.
Sources
- All clause examples on this page are illustrative and written for this guide. They are not quoted from any real company's contract.
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