What is a non-circumvention agreement, and do you need one to refer a company?
A non-circumvention agreement is a contract in which the parties you introduce promise not to bypass you and close the deal without paying you. Enforceability depends on governing law and drafting. In the SourceX program, registered introductions, attribution rules and published terms address the same risk, so read those instead.
The short answer
A non-circumvention agreement, often called a non-circumvent or, when combined with a confidentiality agreement, an NCNDA, is a contract in which the people you introduce promise not to go around you and do the deal without paying you. Whether one holds up depends on the law that governs it and on how precisely it defines the protected contacts, the covered transactions and the time period.
A SourceX referral handles the same worry another way. Introductions are registered through the partner's referral link or the referral form, credit goes to the first valid referrer whose introduction leads to a verified company application within the attribution window, and the rules sit in the published program terms and the signed partner agreement. Read those before you introduce anyone; do not expect to negotiate a separate NCNDA for each company.
What a non-circumvention clause actually says
Non-circumvention is a contract term, not something a statute defines, so there is no standard text. Most versions are built from the same parts.
| Element | What it typically covers | What to look for |
|---|---|---|
| Protected parties | The companies, buyers or investors the introducer brings, often listed in a schedule | Whether a contact must be named in writing to be protected |
| Prohibited conduct | Dealing directly with a protected party, or through an affiliate, to avoid the introducer | Whether indirect dealing is defined |
| Covered transactions | The deal types protected, such as a sale, a financing or a supply contract | Whether a different kind of deal with the same party counts |
| Duration | A fixed period after the introduction or after the agreement ends | Whether the start date is one you can prove |
| Remedy | The fee the introducer would have earned, damages or a court order | Whether it is practical to enforce where the other party is |
| Carve-outs | Relationships that existed before the introduction, or contacts made independently | Who has to prove the earlier relationship, and how |
Non-circumvention is often confused with two neighbors. A non-solicitation clause usually stops one party from hiring the other's staff or poaching its customers. A non-disclosure clause protects information. Only the non-circumvention clause protects the introducer's place in the transaction.
Is a non-circumvention agreement enforceable?
It can be, but it depends on the facts, the wording and the governing state's contract law. As a practical matter, a clause that names the protected party, the type of transaction and a defined period leaves far less to argue about than one that protects all contacts indefinitely.
Two further limits matter for M&A advisors.
- A non-circumvent protects a fee; it does not decide whether you may earn it. In securities transactions, whether someone must register as a broker depends on what they actually do, as the SEC explains in its Guide to Broker-Dealer Registration. The SEC proposed a limited exemption for finders in 2020 but, as its July 2025 advisory committee notice records, did not finalize it. Whatever a private contract says, it does not answer the registration question.
- Registered people answer to their firm. If you hold FINRA registrations, paid outside activities go through your firm's compliance process. FINRA reported in September 2026 that the SEC approved new Rule 3290 on outside activities, replacing Rules 3270 and 3280, with the effective date still to be announced; until then the existing rules apply.
SourceX introductions concern a license of business records, not the sale of a company or its securities. That does not make your own professional rules irrelevant, and the finder vs broker-dealer comparison sets out the questions to take to counsel.
This is general information, not legal, tax or financial advice. Confirm with your own counsel, tax adviser or professional body before acting.
How the SourceX program handles the fear of being cut out
The worry behind most non-circumvention requests is simple: you make the introduction, the parties meet, and the deal closes without you. The program answers it with process rather than a bespoke contract.
- Register before you introduce, so the introduction is recorded under your partner account from the start.
- Use your referral link or the referral form. The link sends the company to sourcex.si/apply with your referral code attached, so the owner can apply alone and your credit is preserved.
- Rely on a published attribution rule. Credit goes to the first valid referrer whose introduction leads to a verified company application within the attribution window, as set out in the terms.
- Notice who pays the reward. It is a share of SourceX's fee and is never deducted from what the company receives, so routing around you saves the company nothing.
- Expect payment to follow cash. Partners earn 25% of the eligible platform fees SourceX actually collects from the referred company's licensing deals, capped at $100,000 per referred company, payable only after the buyer pays and SourceX receives its fee. No reward is guaranteed.
Point 4 is the structural difference from many classic finder arrangements, where the introducer's fee comes out of the deal value and gives the principals a reason to avoid it.
How it applies in common partner situations
| Situation | What to check | Outcome to confirm in the terms |
|---|---|---|
| The owner applies at sourcex.si/apply after your call, without your link | Whether your referral form submission came first | Credit follows the first valid referrer whose introduction led to the verified application |
| Another partner introduced the same company earlier | The dates of each introduction and which one led to the application | One referrer is credited under the attribution rule |
| The company had already applied before you spoke to it | Whether your introduction led to the verified application | Credit depends on which introduction produced it |
| The license closes many months after your introduction | Whether the verified application fell inside the attribution window | How the window is measured |
| A co-introducer asks you to sign an NCNDA before sharing a company | Whether the side agreement fits the program terms | Check the program terms first; a private side agreement does not change how attribution is decided, so ask before you sign |
| The company asks you to sign its NDA first | What the NDA lets you share | You pass on only basic fit information in any case |
Disclosure and consent habits that protect you
These habits do more for an introducer than most non-circumvention clauses, because they create a clear record.
- Get the owner's permission before introducing, and keep the email where they agreed.
- Screen the company first with the company fit checker, so you only introduce businesses that may qualify.
- Send the company your referral link rather than just a name, or submit it through the referral form the same day.
- Keep a dated note of each introduction: company, sponsor, date and channel.
- Share only basic fit information; never forward exports, files or descriptions of confidential records.
- Tell the owner you are a registered partner who may earn a share of SourceX's fee.
- Read the program terms for the attribution window and current reward rules before you rely on them.
Questions to ask your counsel
- Do any NCNDAs I already have with clients or co-introducers restrict me from introducing a company to SourceX?
- Does my sell-side engagement letter address fees from third parties, and must I disclose a referral reward to the client?
- If I hold FINRA registration or another license, what does my firm or regulator require before I accept referral compensation?
- Which state's law governs my existing agreements, and how does it treat restrictive covenants?
For the document that usually sets out referral economics, see what a referral fee agreement is.
Next step
Read the program terms, then register as a partner and make your first introduction with your referral link. If you run sell-side mandates, the page on referral opportunities for M&A advisors shows which clients tend to fit.
- Step 1Share your linkSend your personal link to a company you know.
- Step 2Company appliesThe company applies itself at /apply.
- Step 3Buyer selects and paysThe buyer selects and pays for the data and SourceX receives its fee.
- Step 4You get your rewardYour share of SourceX fees becomes payable.
Common questions
What does NCNDA stand for?
NCNDA stands for non-circumvention and non-disclosure agreement. It combines two promises in one document: the parties will not bypass the introducer to deal directly with the contacts the introducer brought, and they will keep shared information confidential. The format is common in finder, brokerage and commodity-trading arrangements, where an introducer's main asset is the relationship and the information they pass on.
Is a non-circumvention clause the same as a non-compete?
No. A non-compete restricts someone from competing in a market or role. A non-circumvention clause is narrower: it restricts dealing around the introducer with specific parties for a defined period. A non-solicitation clause is different again, usually covering employees or customers. Each is treated under its own rules, which vary by state, so ask counsel which applies to your agreement.
Will SourceX sign a non-circumvention agreement for each introduction?
Partners should not expect to negotiate a separate NCNDA for each company. The program's protection comes from its registration and attribution process, set out in the published terms and the partner agreement you sign. If anything about attribution is unclear, ask before you introduce a company rather than after, and keep your referral link and form records.
How long does a non-circumvention period usually last?
There is no standard length. Clauses commonly run for a fixed period from the introduction or from the end of the agreement, and some try to last as long as the protected relationship. Broad, open-ended periods leave more room for dispute. In the SourceX program the period that matters is the attribution window described in the program terms.
What evidence helps if someone disputes that I made the introduction?
Dated records do most of the work: the email where the owner agreed to be introduced, the referral form confirmation, evidence that the company applied through your referral link, and notes of calls with the sponsor. Keep them together for each company you introduce. A clear record is more useful in practice than a broadly worded clause that someone later disputes.
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By SourceX Partnerships Team · Published 2026-10-09 · Updated 2026-10-09
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