How to Negotiate Non-Circumvention Clauses - NDA Clause Library

First Question: Should This Be In Your NDA?

Before negotiating the terms of a non-circumvention clause, ask whether it belongs in your NDA at all. Non-circumvention is not a confidentiality provision - it's a business restriction that has been improperly bundled into many NDAs.

Ask the other party directly: "What specific introductions are you making that require non-circumvention protection?" If they cannot identify specific, valuable introductions, the clause likely doesn't belong in the agreement.

Appropriate Responses

"We're introducing you to our exclusive distributor in Japan who took us years to find"
"You'll meet our key supplier, and we negotiate special pricing through our volume"
"We're connecting you with an investor who specifically requested privacy"

Red Flag Responses

"It's just standard language in our template"
"We include it in all our NDAs"
"Our lawyers require it" (but can't explain why)
"You might meet some of our contacts" (vague, no specific introductions)

Negotiation Strategies by Role

If You're Making Introductions

Document introductions in writing immediately when made
Be specific about which contacts are protected
Tie protection to specific transactions, not general relationships
Request compensation terms (finder's fees) for any circumvention
Seek longer duration (2-3 years) for high-value introductions
Include audit rights to verify compliance

If You're Receiving Introductions

Question whether non-circumvention is necessary at all
Require written identification of protected contacts
Insist on pre-existing relationship carveouts
Limit duration to 12-24 months maximum
Carve out your normal business operations
Require notice and cure before breach claims

Key Scope Limitations to Negotiate

Even if you accept non-circumvention, limiting its scope is essential to protect your business flexibility.

Pre-Existing Relationships

Contacts you already know cannot become "protected" just because someone else mentions them. Require documented proof of relationship priority.

Written Identification

Protected contacts must be identified in writing within a short window (10-30 days) of introduction. No retroactive protection.

Specific Transactions

Protection should be limited to the specific transaction discussed, not all possible future business with the contact.

Inbound Contact Carveout

If the "protected" contact reaches out to you independently, that should not be circumvention.

Normal Business Operations

Your ordinary course of business should be explicitly excluded from non-circumvention restrictions.

Public Opportunities

Publicly known or publicly available business opportunities cannot be "protected" under non-circumvention.

Negotiating Time Limits

Scenario	Reasonable Duration	Assessment
General business discussions	6-12 months	Appropriate
Specific deal introductions	12-24 months	Appropriate
Major strategic partnerships	2-3 years	Negotiate
High-value M&A introductions	3-5 years	Negotiate
Any perpetual/indefinite term	N/A	Reject

Negotiation tip: Offer to accept longer duration in exchange for narrower scope. For example: "We'll agree to 3 years if it only applies to the three specific suppliers you've identified in writing."

Negotiation Playbook

1

Challenge the Premise

Ask why non-circumvention is included. If there are no specific introductions planned, request removal entirely. Many parties will agree to delete it.
2

Require Written Identification

If removal fails, insist that protected contacts must be identified in writing. No blanket protection for "any contacts" - only specifically named parties.
3

Carve Out Pre-Existing Relationships

Add explicit language that contacts you already know cannot become protected. Offer to provide a list of your current relationships if necessary.
4

Limit to Specific Transactions

Narrow the restriction to the specific deal or opportunity being discussed, not all future business with the contact.
5

Negotiate Duration

Push for the shortest reasonable term. Use the comparison table above as a benchmark. Anything over 2 years requires strong justification.
6

Add Notice and Cure

Include a requirement for written notice and an opportunity to cure before any circumvention claim can be made. 30 days is standard.

When to Walk Away

Some non-circumvention terms are deal-breakers. Be prepared to reject agreements containing:

Absolute Red Lines

Perpetual duration: Non-circumvention that never expires is almost certainly unenforceable and unreasonable
"Any contacts" language: Blanket protection without specific identification creates unlimited liability
No pre-existing relationship carveout: You could be restricted from working with contacts you already know
Criminal penalty provisions: Some aggressive clauses include criminal fraud allegations - these are inappropriate
Automatic injunction rights: Provisions waiving your right to contest injunctive relief
Excessive liquidated damages: Punitive damage clauses disguised as "liquidated damages"

If the other party refuses to negotiate reasonable limitations, consider whether the relationship is worth the business restriction. An overly aggressive non-circumvention clause is often a sign of a difficult business partner.