Are you entering a joint venture with another business or organization? Are you bringing in an outside professional to work together on a commercial project? You may benefit from a non-circumvention agreement or a non-circumvention clause within your contract. In this article, our Clearwater business contract attorney explains the most important things that you should know about non-circumvention agreements (non-circumvention clauses) in Florida.
What is a Non-Circumvention Provision?
A non-circumvention provision is a contractual clause that is designed to prevent one party from “circumventing” another party in a business relationship, thereby using their position to improperly gain direct access to opportunities, clients, customers, or sources. In other words, this type of agreement or contract provision is meant to safeguard the interests of intermediaries who provide business opportunities to other parties. A non-circumvention provision is commonly employed in various commercial transactions, such as joint ventures, M&A transactions, and business partnerships.
How to Draft a Non-Circumvention Agreement (Key Terms)
How exactly a non-circumvention agreement should be drafted depends on a number of different case-specific issues. Though, a non-circumvention agreement should always have clear, concise writing that leaves no room for misinterpretation. Some key terms to include in the agreement are:
- Parties Involved: Clearly define who is bound by the agreement, including individuals, companies, and any associated entities. You need to make it clear.
- The Scope: Detail what business opportunities or relationships are protected under the agreement. There is a risk of unenforceability with overly broad or overly vague contracts in Florida. The more specific you can be in the scope of the agreement, the better.
- The Duration: Specify the period during which the agreement is enforceable. It is best to have a clear duration for the non-circumvention agreement.
- Geographic Scope: If applicable, identify the regions or territories where the agreement applies. In Florida, a non-circumvention agreement may need to have a reasonable geographic scope. There should be a commercial purpose to the restrictions.
- Breach Consequences: Outline what penalties or remedies apply if the agreement is breached.
Every Contract Should Be Customized to Meet Your Needs
In Florida, one-size-fits-all contracts are rarely effective. Customization of every contract is key—and non-circumvention agreements are certainly no exception to the rule. Among other things, customization entails tailoring the agreement to suit the specific characteristics of your business relationship, including the roles of the parties involved, the nature of the business opportunity, the risks associated. A well-drafted agreement will not only best protect your interests, it reduces the risk of unenforceability in Florida courts due to overly broad terms.
Speak to a Contract Law Attorney in Clearwater, FL
At Clearwater Business Law, our Florida business lawyer has the skills and experience to draft, negotiate, review, and litigate all non-circumvention agreements/provisions. If you have any questions about your rights or your options, we are here as a resource. Call us now at (727) 785-5100 or contact us online for a confidential initial appointment. From our Clearwater, FL law office, we provide business law services throughout the wider region.