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Non-disclosure agreements vs non-circumvention provisions

Non-disclosure agreements vs non-circumvention provisions

Most business people know when they work with another company, they want a non-disclosure agreement or NDA. An NDA is a “don’t tell anyone about my stuff” type of agreement. This previsions literally require the other side not to disclose certain information to third parties. 

Often, they are enough to protect your business, but your NDA might not give you the protection you hoped it would. Why? There’s a huge loop hole in the NDA. What if the other side tells no one about your stuff, just uses your stuff without you? Has the bad guy violated your NDA? Probably not, after all they didn’t tell anyone about your stuff. They just cut you out of the deal. 

If you are jointly working on a product or idea, or another company is in the support position for an opportunity product or idea, you might just want a Non-Circumvention Provision. 

While an NDA is a don’t TELL anyone about my stuff clause, a Non-Circumvention Provision is don’t DO my stuff WITHOUT ME clause. For example, you just developed the best relocation package in existence, and you want to team up with a moving company to bring the product to market. 

You brought the idea, product and opportunity to the mover, but the mover steals your idea. He might not have violated your NDA, but he will violate a good Non-Circumvention Provision. This clause prevents the moving company from running with your idea because it opts differently, to your clients or the market place without you. 

If the other side circumvents the teaming agreement, you still benefit. That’s why a Non-Circumvention Provision might be the most powerful contract term to avoid legal landmines that you are not using.