Each party agrees not to circumvent or bypass the other party in any way to gain access to Confidential Information or to the clients or customers of the other party. Each party shall not make use of or exploit the Confidential Information or trade connections of the other party for its own benefit or for the benefit of a third party.
Here is a plain English explanation of the Non-Circumvention clause:
- This clause prevents the parties from going around each other to get access to confidential information or business contacts.
- Neither party can exploit the other's confidential information or customer relationships for their own benefit or a third party's benefit.
- The parties must go through proper channels and cannot sidestep or bypass each other to tap into sensitive information or client connections.
- Circumventing the other party to take advantage of their trade secrets, intellectual property, or clients is prohibited.
- Essentially, the parties must respect each other's proprietary information and relationships.
- Accessing the other's protected resources through back channels or by stealth is not allowed.
- The purpose is to prevent unethical business behavior and misuse of confidential data obtained through the relationship.
- It maintains trust by ensuring proper procedures are followed to handle sensitive information and contacts.
Non-circumvention clauses originated in international trade contracts to prevent unscrupulous behavior and unfair exploitation of confidential information.
With the growth of global commerce in prior centuries, some merchants began circumventing their partners overseas to directly access suppliers for their own gain. This violated business ethics and undermined trust.
To curb such conduct, clauses were developed prohibiting merchants from bypassing one another to tap their exclusive overseas connections and sources. This concept was later expanded beyond international trade into other business agreements involving proprietary information, trade secrets, and client relationships.
Over time, non-circumvention clauses became a standard contractual tool to maintain integrity and prevent unethical manipulation of confidential data for unauthorized purposes. They uphold loyalty between parties who reveal sensitive information or provide exclusive business contacts during their relationship.
The clauses trace back to promoting ethical business practices in an international merchant context.
Today, they continue serving an important role in contracts governed by English law to preserve trust and prevent confidential data misuse, by prohibiting stealthy circumvention of proper channels.