Template:M intro nda Exclusivity

You will often see in an NDA a clause headed up “non-circumvention” or “exclusivity”. This will be to the effect that if you sign up with this introducer to evaluate a juicy deal you can’t then go behind the introducer’s back and contract directly with the source of the juice and do the introducer out of its cut.

This is basically bogus rationale. If the “introducer” is doing something special and valuable for the transaction — that is worth paying for — the transaction will not happen without that something being done and being paid for, so no-one has a great deal of incentive to cut the Introducer out of the loop, since they will only have to pay someone else for the bother of doing that thing, or do it themselves.

But if, as is more usually the case, the Introducer is simply extracting rent from the contents of its own rolodex, and is otherwise adding nothing, taking nothing, and has no skin in the game, then — well, the introducer can go jump in a lake.

If you do have a valuable introducer, okay, you may be prepared to sign an exclusivity, since you are not really giving away anything and maybe it will keep your introducer happy, but even then, the NDA is not really the right place for it. NDAs are limited agreements about the sharing of information. They affect different people over different periods than does an NDA.

In our premium content section there is a sample rebuttal letter should you be asked for an exclusivity.

But in general, the best way of ensuring exclusivity is to be the best in the market. If you are, you don’t need a contractual clause. The JC’s experience is that those counterparts who are hottest on the idea of exclusivity tend to be the least hot at what they do.