Non circumvention clause: protecting an introduction

Sample clause

Written for an introduction agreement between Mekong Bridge Trading, a fictional sourcing agent, and a Brisbane furniture importer it is introducing to a furniture factory.

Non Circumvention. (a) For 24 months after the date of each introduction, the Client must not, and must ensure its related entities do not, purchase goods from, or enter into any agreement with, an Introduced Party except through the Agent, unless the Client pays the Agent the commission in paragraph (b). (b) The commission is 6% of the value of goods purchased from an Introduced Party during that period, payable within 30 days after each purchase. (c) Introduced Parties are the businesses listed in the Schedule, which the Agent may add to by written notice given within 7 days after an introduction, describing the introduction. (d) This clause does not apply to a business with which the Client can show, by written records, it was already dealing before the introduction.

Sample wording, not legal advice.

Variants

What to negotiate

• A schedule of introduced parties

  Disputes usually turn on whether a business was really introduced. A schedule, updated by notice soon after each introduction, settles that. Clients should resist protection for every business the agent ever mentions; agents should record introductions promptly with evidence, such as the introduction email, so the schedule cannot be challenged later.

• Commission instead of a ban

  A ban on dealing is a restraint of trade and must be reasonable to be enforced. A commission obligation is easier to justify and enforce, because it compensates the introducer rather than stopping trade. Many clients accept commission readily while refusing an outright ban, and many introducers really only want to be paid.

• Restraint of trade risk

  Courts in Australia, the UK and the US test restraints for reasonableness: protecting a legitimate interest, such as the introducer's commission, for a reasonable period and scope. A 24 month period tied to named introductions is far more likely to be upheld than an open ended ban on dealing with an entire industry. Pre existing relationships should always be excluded.

The risk of leaving it out

Without a non circumvention clause, an introducer usually has no claim if the client deals directly with the contact, unless it can show a breach of confidence or a separate agreement to pay. A confidentiality clause alone rarely helps, because the identity of a business is often not confidential. Introducers who work on commission rely on this clause to be paid.

Ban against commission versions

Ban: the client must not deal with the introduced party at all for the period. Strong protection, but more likely to be challenged as a restraint, and it may cost the client a good supplier. Commission: the client may deal directly but must pay the agreed commission. Easier to enforce and accept, and gives the agent what it usually wants. Hybrid: a ban unless the commission is paid, as in the sample, which combines a clear rule with a lawful way through it. Law checked on 21 October 2026. This page explains how the clause works and is not legal advice.

The introduced parties schedule

A practical schedule lists, for each introduced party: the business name and location; the date of introduction; how the introduction was made, such as an email or a meeting; the individual contacts introduced; and the protection period end date. Keeping it current makes the clause enforceable and reduces the scope for argument. Clients can ask to be notified of each addition so they can object if they already knew the business.

NCNDA agreements

In trading and brokering, non circumvention is often combined with non disclosure in an NCNDA, a non circumvention and non disclosure agreement. Many circulating NCNDA templates are vague, cover all contacts forever, and are of doubtful enforceability. A short, specific clause tied to named introductions, a time limit and a commission is more useful than a long generic NCNDA.

Competition law

In Australia, the Competition and Consumer Act 2010 prohibits some restrictive arrangements, and restraints between businesses that substantially lessen competition can raise issues. An ordinary commission based non circumvention clause between an agent and a client rarely does, but broad exclusive dealing terms across a market should be checked.

Documents that carry this clause

Referral agreement template with a fee table by productA referral agreement works when it is clear where the referral stops and the advice starts. This one has a real estate agency passing buyers to a mortgage broker for a fee that ranges from $250 to $1,100 by product, attributed for 90 days, paid monthly, and clawed back if the lender claws back first.Mutual NDAA robotics company and a British parts maker want to look inside each other before agreeing to anything. Both sides are handing over trade secrets, which is the only real reason to make an NDA mutual.Sales agency agreement with a commission ladder and a named territoryA sales agency agreement has to answer two questions before anything else: what the agent is allowed to promise on your behalf, and exactly how the commission is worked out. This finished example answers both on the page, with a four band ladder from 6.0 to 10.5 per cent, a worked example on $520,000 of sales, and a table of six decisions the agent may and may not make.

Questions people ask