💡 Plain English Explanation

The Vendor Terms Protection clause safeguards the specific arrangements a retailer has negotiated with its suppliers and vendors. This includes exclusivity agreements, payment terms, volume commitments, co-op advertising arrangements, and special programs that give the retailer competitive advantages in the marketplace.

In retail, vendor relationships are strategic assets. Years of negotiation, volume commitments, and relationship building go into securing favorable terms. If a competitor learns that you have exclusive rights to a product line, 90-day payment terms, or preferential allocation during shortages, they can use that information to negotiate similar or better terms, or to poach your suppliers.

This clause typically addresses:

⚠ Why This Clause Matters in Retail

For the Retailer (Disclosing Party): Your vendor relationships represent years of negotiation and strategic positioning. Exclusivity agreements prevent competitors from carrying certain brands. Extended payment terms improve cash flow. Volume rebates reward your purchasing power. Disclosure of these arrangements to competitors or even to other vendors can undermine your negotiating position and competitive advantage.

For the Service Provider (Receiving Party): You may need access to vendor information for legitimate purposes such as supply chain optimization, payment processing, or technology integration. You need clear boundaries on what you can do with this information, particularly if you serve multiple retailers who may have overlapping vendor relationships.

Vendor Perspective: Vendors themselves often have confidentiality provisions in their retailer agreements. When you share vendor terms with third parties, you may be breaching those underlying agreements. Ensure your NDA acknowledges this layered confidentiality structure.

📄 Clause Versions

Balanced Version: Protects key vendor relationship details while allowing reasonable operational use. Includes clear categories and acknowledges practical business needs. 
"Vendor Terms" means non-public information relating to the Disclosing Party's relationships with its suppliers, vendors, manufacturers, and distributors, including without limitation:

(a) the identity of vendors with whom the Disclosing Party has exclusive or preferred relationships;
(b) pricing terms, including wholesale prices, volume discounts, rebate structures, and promotional allowances;
(c) payment terms, including payment periods, early payment discounts, and credit arrangements;
(d) volume commitments, minimum purchase requirements, and allocation arrangements;
(e) exclusivity agreements, territorial restrictions, and channel limitations;
(f) co-op advertising arrangements, marketing development funds, and promotional support terms; and
(g) contract terms, renewal dates, and negotiation strategies.

The Receiving Party agrees to:

(i) use Vendor Terms solely for the Purpose defined in this Agreement;
(ii) not disclose Vendor Terms to any competitor of the Disclosing Party or to any entity that provides similar services to the Disclosing Party's competitors;
(iii) not contact, solicit, or interfere with any vendor relationship identified through access to Vendor Terms;
(iv) not use Vendor Terms to negotiate on behalf of any third party or to provide competitive intelligence to any third party; and
(v) implement reasonable access controls to limit exposure of Vendor Terms to personnel with a need to know.

The existence of specific vendor relationships may be acknowledged when necessary for the Purpose, but the specific terms of such relationships shall remain confidential.

Vendor Terms shall remain confidential for a period of three (3) years following disclosure or until the underlying vendor agreement expires or is publicly disclosed, whichever is later.
Disclosing Party Favor: Maximum protection for all vendor relationship information with broad definitions, non-solicitation provisions, and extended confidentiality periods. 
"Vendor Terms" means all information, in any form, relating to or derived from the Disclosing Party's relationships, negotiations, or dealings with any supplier, vendor, manufacturer, distributor, licensee, or other party in the Disclosing Party's supply chain, including without limitation:

(a) the identity of all vendors, suppliers, and manufacturers, including secondary and backup sources;
(b) all contract terms, including pricing, payment terms, warranties, indemnities, liability provisions, and termination rights;
(c) all exclusivity arrangements, including geographic exclusivity, product exclusivity, and channel exclusivity;
(d) all financial arrangements, including payment schedules, credit terms, rebate structures, volume incentives, and co-op advertising funds;
(e) all operational arrangements, including lead times, minimum order quantities, allocation priorities, and fulfillment terms;
(f) all quality and compliance terms, including specifications, testing requirements, and audit rights;
(g) all strategic information, including product roadmaps, upcoming collections, and discontinuation plans;
(h) all negotiation information, including proposals, counteroffers, and negotiation strategies; and
(i) the existence, status, or nature of any vendor relationship or negotiation.

The Receiving Party acknowledges that Vendor Terms constitute trade secrets and provide significant competitive advantage to the Disclosing Party. The Receiving Party agrees to:

(i) treat Vendor Terms with the highest level of confidentiality;
(ii) not disclose Vendor Terms to any third party without prior written consent from the Disclosing Party;
(iii) not directly or indirectly contact, solicit, or communicate with any vendor identified through access to Vendor Terms regarding any business relationship, pricing, or terms, except as specifically authorized in writing by the Disclosing Party;
(iv) not use Vendor Terms to develop, source, or manufacture competing products;
(v) not introduce any third party to vendors identified through Vendor Terms;
(vi) immediately notify the Disclosing Party if approached by any vendor regarding information that may have been derived from Vendor Terms; and
(vii) indemnify the Disclosing Party for any damages resulting from interference with vendor relationships caused by breach of this clause.

The Receiving Party shall not, during the term of this Agreement and for a period of two (2) years thereafter, engage in any business relationship with vendors identified solely through access to Vendor Terms without the prior written consent of the Disclosing Party.

Confidentiality obligations for Vendor Terms shall survive for five (5) years following disclosure or until the underlying vendor relationship terminates and is publicly disclosed, whichever is later.
Receiving Party Favor: Narrow definition focused on documented disclosures, allows pre-existing vendor relationships, and provides reasonable confidentiality periods with clear carve-outs. 
"Vendor Terms" means only the specific vendor agreement terms that are:

(a) provided by the Disclosing Party in written or electronic form;
(b) clearly marked as "Confidential Vendor Information" at the time of disclosure; and
(c) directly relevant to the Purpose of this Agreement.

Vendor Terms includes copies of vendor contracts, pricing schedules, and exclusivity agreements that meet all of the above criteria.

For clarity, Vendor Terms does not include:
(i) the identity of vendors whose products are publicly sold by the Disclosing Party or whose relationship with the Disclosing Party is otherwise publicly known;
(ii) general industry knowledge about vendor practices, standard terms, or market pricing;
(iii) information about vendors with whom the Receiving Party has an independent, pre-existing relationship;
(iv) publicly available vendor catalogs, price lists, or marketing materials; or
(v) information that the Receiving Party independently learns from the vendors themselves.

The Receiving Party shall use commercially reasonable measures to protect Vendor Terms, consistent with how it protects its own confidential business information.

The Disclosing Party acknowledges that the Receiving Party may have existing relationships with vendors that supply the Disclosing Party. Nothing in this Agreement shall:
(i) require the Receiving Party to terminate or modify any pre-existing vendor relationship;
(ii) prevent the Receiving Party from developing new vendor relationships through independent means; or
(iii) restrict the Receiving Party from using general industry knowledge about vendor practices.

The non-solicitation provisions of this clause apply only to vendors whose identity was first learned through access to Vendor Terms and shall expire twelve (12) months after termination of this Agreement.

Confidentiality obligations for Vendor Terms shall expire two (2) years after the date of disclosure or upon termination of the underlying vendor agreement, whichever is earlier.

💬 Key Considerations for Retail