An NCND agreement — short for Non-Circumvention, Non-Disclosure agreement — is a single contract that combines two protections: it keeps shared information confidential, and it stops one party from going around the intermediary who introduced a deal or contact. It shows up most often in international trade, commodity brokering, and other transactions where someone’s commercial value lies in the introductions they can make. Sign one, and you are agreeing both to keep what you learn to yourself and to avoid cutting the introducer out of future business with the people they put you in touch with.
What Each Half of the Agreement Does
The non-disclosure half works like a standard NDA. The receiving party agrees to keep shared information confidential and to use it only for the purpose named in the agreement. That typically covers trade secrets, financial data, client lists, pricing models, and supply chain details. Well-drafted versions carve out information that is already public, information the receiver already had, information developed independently, and information received from a third party with no confidentiality obligation.
The non-circumvention half is what makes an NCND different from an ordinary NDA. It prevents a party from going around the intermediary who made the introduction. If a trade broker introduces you to a petroleum supplier in the Middle East, nothing in a plain NDA stops you from calling that supplier directly on your next deal and leaving the broker out. A non-circumvention clause prohibits exactly that. These clauses typically ban direct or indirect contact with the protected parties — suppliers, buyers, or other contacts introduced during the transaction — without the introducer’s written consent. The restriction usually extends to your employees, affiliates, and agents, which closes the obvious loophole of asking someone else to make the call. When circumvention happens, the bypassed party is normally entitled to damages equal to the commission or fee they would have earned, and sometimes more.
An NCND can be one-directional, where only one side is disclosing and needs protection, or mutual, where both sides share sensitive information and introduce contacts. Mutual versions are common in joint ventures and co-brokered deals. The agreement usually functions as a gateway document, signed before the parties move on to a purchase agreement, commission contract, or other operational deal.
How an NCND Differs from an NDA and a Non-Compete
People often confuse NCNDs with NDAs because both involve confidentiality. The difference is scope. A standard NDA restricts what you do with information. An NCND restricts what you do with information and what you do with relationships. An NDA alone would not stop you from contacting a supplier you learned about during negotiations; it would only stop you from sharing that supplier’s name with someone else. The non-circumvention component locks down the relationship itself, not just the data around it.
An NCND is also not a non-compete. A non-compete prevents you from competing in a particular market or industry. A non-circumvention clause is narrower: it only prevents you from cutting out the specific person who introduced you to specific contacts. You can still compete in the same industry, work with other suppliers, and pursue other deals. You just cannot do it with the protected contacts you were introduced to under the agreement.
Clauses That Decide Whether an NCND Actually Works
Beyond the two core protections, several supporting clauses determine whether the agreement holds up in practice.
Term and Survival
The term clause sets how long the agreement lasts, typically two to five years from the date of the last contact or from execution. Perpetual restrictions are disfavored by courts, so a definite endpoint matters. A separate survival clause extends specific obligations — usually confidentiality — beyond the agreement’s expiration. Survival periods of three to five years after termination are common, though some agreements make confidentiality indefinite for trade secrets specifically.
Schedule of Protected Parties
The strongest NCND agreements include an exhibit listing the specific contacts, companies, and sources covered by the non-circumvention clause, updated as new introductions are made. Vague descriptions like “all contacts introduced during our dealings” are far weaker in court than a named list with dates. If you are the intermediary, insist on a written schedule.
Liquidated Damages
Many NCND agreements include a liquidated damages clause setting a predetermined payout if circumvention occurs. When a broker gets cut out of a commodity deal, calculating exactly how much business they lost over the life of the relationship is genuinely difficult, and a set figure resolves that upfront. Courts will strike down the clause, however, if the amount bears no reasonable relationship to the anticipated harm. A figure pegged to double the expected commission on a defined transaction is likely to survive. An arbitrarily large number meant to punish will not.
Governing Law and Jurisdiction
Because NCNDs frequently cross borders, the governing law clause specifies which country’s or state’s legal system applies, and the jurisdiction clause determines where disputes are resolved. In international commodity deals, arbitration clauses are common because they avoid the uncertainty of litigating in a foreign court. The ICC offers arbitration services, and referencing ICC arbitration rules is standard in agreements modeled on the ICC template.1International Chamber of Commerce. ICC Model Contracts and Clauses
The ICC’s own Model Occasional Intermediary Contract is the most widely referenced NCND template in international trade. It was designed for intermediaries whose role might be as limited as supplying the name of a potential customer or flagging a particular deal, and it focuses on protecting that intermediary against circumvention and non-payment.2International Chamber of Commerce. ICC Model Occasional Intermediary Contract (NCND)
What Courts Look For Before Enforcing One
A signed NCND does not guarantee enforcement. Courts evaluate non-circumvention clauses the way they evaluate other restrictive covenants, looking at whether the restrictions are reasonable in scope, duration, and geography. Fail on any of these, and the agreement can be thrown out entirely.
- Specificity of protected contacts: The agreement must identify the people, companies, or opportunities covered with reasonable detail. A named schedule is far more enforceable than a blanket restriction.
- Reasonable duration: Two to five years is the accepted range. Open-ended or perpetual non-circumvention restrictions are consistently rejected.
- Geographic scope: Where relevant, the restricted territory should correspond to the area where the intermediary actually operates or made introductions.
- Independent consideration: In a standalone NCND, the introduction itself can serve as consideration, but the agreement should say so explicitly. Without consideration, the contract may lack a basic formation requirement.
- Pre-existing relationships: If the restricted party already had a relationship with the contact before the introduction, sweeping that relationship into the NCND undermines enforceability.
Overbreadth is where most enforcement attempts fail. Courts have refused to enforce clauses that extend restrictions to vaguely defined “affiliates,” that prohibit merely “attempting to” contact someone, or that lack any temporal limit. Precision helps. Broad, aspirational language works against you.
The non-disclosure side carries its own enforcement machinery. The federal Defend Trade Secrets Act lets a court issue an injunction against ongoing misappropriation, award damages for actual losses and unjust enrichment, and impose exemplary damages up to twice the compensatory award when the theft was willful and malicious.3Office of the Law Revision Counsel. 18 USC 1836 – Civil Proceedings Most states have adopted some version of the Uniform Trade Secrets Act with parallel remedies.
Where NCNDs Are Commonly Used
NCNDs are not universal business documents. They serve a specific purpose in industries where introductions carry real commercial value.
- International commodity trading: Brokers dealing in petroleum, minerals, and agricultural products rely on NCNDs to protect their supply chain contacts. A single introduction to a verified seller can be worth millions in future commissions.
- Real estate wholesaling: Wholesalers who find off-market properties and assign contracts to investors use NCNDs to prevent the investor from going directly to the owner on future deals.
- Business brokerage: Brokers facilitating company acquisitions use these agreements to keep buyers from approaching sellers directly after the introduction.
- Procurement consulting: Consultants connecting companies with overseas manufacturers use NCNDs to protect supplier relationships.
- Financial intermediation: Finders who connect borrowers with lenders, or investors with fund managers, use NCNDs to ensure referral fees are honored.
The common thread is that the intermediary’s value lies in access to a network or a specific contact. Once that access is shared, the intermediary has nothing left to sell unless the agreement prevents the other side from exploiting the introduction independently.
The IMFPA Companion in Commodity Deals
In international commodity trading, an NCND is often paired with an IMFPA, which stands for Irrevocable Master Fee Protection Agreement. The NCND prevents circumvention, but it does not directly guarantee the intermediary gets paid. The IMFPA fills that gap by creating a binding payment obligation backed by banking arrangements. Under a typical IMFPA, the buyer directs their bank to automatically transfer the intermediary’s commission into a designated account within a set timeframe after each shipment closes, and the agreement covers renewals, extensions, and follow-on deals that originated from the original introduction.
The IMFPA is also the document most frequently associated with fraud in this space. Legitimate IMFPAs exist in real commodity deals, but the structure has been widely copied in scams where no actual product changes hands. Treat any IMFPA attached to an unverified deal with skepticism.
Fraud and Red Flags
NCND agreements have acquired a bad reputation, and it is partly deserved. The ICC itself has warned about fraudulent NCNDs circulating online, noting that “elaborate websites soliciting export and import business are offering get-rich-quick deals” using “full texts of bogus ICC non-circumvention and non-disclosure agreements.” The ICC states that references to non-existent rules like “ICC Regulations 400/500/600” should be treated as indicators of a possible scam.4International Chamber of Commerce. Traders Warned About Non-Existent ICC Instruments Quoted on Internet
The genuine ICC model is Publication No. 769, available through the ICC Business Bookstore. If someone hands you an NCND claiming to follow “ICC rules” but not referencing that publication, investigate before signing.
Other warning signs are worth knowing:
- Long chains of unnamed brokers: Legitimate deals have a short, verifiable chain between buyer and seller. Layers of intermediaries you cannot verify usually mean the deal is fictitious.
- Upfront fees before product verification: Requests for due diligence fees, compliance deposits, or “soft probe” payments before any product has been inspected are classic advance-fee fraud.
- Vague product details: An NCND that does not specify the actual commodity, quantity, origin, or delivery terms with precision suggests there is no real product behind the deal.
- Pressure to sign immediately: Legitimate counterparties expect you to have the agreement reviewed by counsel. Urgency is a manipulation tactic.
The NCND itself is not the scam. It is the credibility tool that makes the scam look professional. Fraudsters use official-looking NCND and IMFPA documents to create the appearance of a legitimate multi-party trade when no goods actually exist. If the underlying deal does not check out, no amount of paperwork makes it real.