Case Note: Saving a Deal with a Non-Circumvention & NDA Agreement

The Situation

A company had been developing a transaction for months and was approaching a critical stage. One of the members proposed bringing in a potential partner with whom they had a prior personal relationship. The additional participant could add value, but introducing a new party at that stage also created risk, particularly the risk of interference with the deal or the underlying relationships.

Before any substantive discussions occurred, the company asked us to put protections in place.

The Strategy

We drafted and executed a combined non-circumvention and nondisclosure agreement.

A nondisclosure agreement protects confidential information. A non-circumvention agreement goes further: it prevents a participant from bypassing the company to deal directly with counterparties, investors, or other key contacts learned through the relationship. In this case, the agreement was drafted to cover not only the transaction itself, but also the contacts, communications, and relationships surrounding it.

With those protections in place, the new participant joined several calls and was given limited visibility into the deal.

As negotiations progressed, misunderstandings arose and the prospective partner decided not to move forward. Ordinarily, that would have ended the matter. Instead, they began making threats to go around the company and contact the other party directly, conduct that risked disrupting or derailing the transaction.

An important factor in resolving the situation was credibility. The agreement was drafted with enforcement in mind, and the counterparty understood that, if necessary, the company was prepared to follow through.

In many transactions, corporate documentation and litigation strategy are handled by different counsel, which can create gaps between contract language and practical enforceability. Here, the ability to move seamlessly from deal structure to potential enforcement helped clarify the consequences of continued interference, keeping the dispute from escalating further.

The Outcome

We put the individual on formal notice that such conduct would constitute a breach of the non-circumvention agreement. After further back-and-forth, they backed down and ceased contact.

The company proceeded with the transaction without that person’s involvement, and the deal ultimately closed without interference.

The Takeaway

Not every threat becomes litigation. Often, the value of a well-drafted agreement is that it never needs to be enforced in court. Clear boundaries, defined early and in writing, can prevent impulsive or retaliatory conduct from becoming a deal-ending event.

Advisory Note

When introducing new participants into an active deal—especially through personal relationships—protect the transaction before sharing access. A tailored non-circumvention and NDA agreement can help preserve leverage, relationships, and momentum when negotiations become unpredictable.