The Non-Circumvention and Non-Disclosure (NCND) form is a legal document designed to protect the interests of parties entering into business transactions. It ensures that introductions made between parties are respected and that any related commissions or fees are honored. By signing this agreement, parties commit to maintaining confidentiality and avoiding any actions that could undermine the value of their introductions.
The Non-Circumvention and Non-Disclosure (NCND) form serves as a crucial tool for parties engaged in business transactions, ensuring that all involved are fairly compensated for introductions and referrals. This agreement is designed to protect the interests of the parties by preventing any direct or indirect circumvention of established relationships. It emphasizes the importance of transparency and trust, as each party agrees not to disclose confidential information that could jeopardize business dealings. The NCND form outlines the obligations of each party regarding payment of fees and commissions, ensuring that no one attempts to avoid their financial responsibilities. Additionally, it establishes a five-year term during which the agreement remains binding and non-cancelable, reinforcing the commitment to uphold the terms. The form also addresses potential disputes, specifying that unresolved issues should be submitted to arbitration, thereby promoting a fair resolution process. Overall, the NCND form is essential for fostering secure and mutually beneficial business relationships.
What is an NCND form?
An NCND form, or Non-Circumvention and Non-Disclosure Agreement, is a legal document designed to protect the interests of parties involved in business transactions. It ensures that parties do not bypass each other in dealings with third parties introduced during negotiations. Additionally, it safeguards confidential information shared between the parties, preventing unauthorized disclosure.
Why is an NCND form important?
This form is crucial because it establishes trust and security in business relationships. By signing an NCND, parties can feel confident that their introductions and sensitive information will be respected. This agreement helps prevent potential disputes and financial losses that could arise from unauthorized dealings or information leaks.
How long does the NCND agreement last?
The NCND agreement is effective for five years from the date of execution. During this time, the terms of the agreement remain irrevocable and non-cancelable. This duration allows parties to establish long-term business relationships while ensuring that their interests are protected.
What happens if a party violates the NCND agreement?
If a violation occurs, the affected party has the right to seek legal action. The agreement stipulates that disputes will be submitted to the American Arbitration Association in Denver, Colorado. The decision made by the arbitrators will be binding, and the prevailing party may recover reasonable attorney fees and costs incurred during the legal process.
Can confidential information be disclosed under the NCND?
Confidential information cannot be disclosed without the written consent of the other party. This includes sensitive data such as names, financial details, and contact information. The NCND agreement explicitly covers negligent or inadvertent disclosures, ensuring that all parties are held accountable for maintaining confidentiality.
What is considered an introduction under the NCND agreement?
An introduction is defined as any connection made between parties that leads to a potential business transaction. If one party introduces another to a third party, and that third party subsequently engages in a transaction, the introducing party is entitled to any fees or commissions associated with that transaction.
Are there any exceptions to the NCND agreement?
While the NCND agreement is comprehensive, it may be subject to exceptions if outlined in related agreements, such as a Loan Authorization Agreement. In such cases, the terms of the Loan Authorization Agreement would prevail over the NCND agreement.
Who is bound by the NCND agreement?
The NCND agreement binds not only the signing parties but also their successors and assigns. This includes any business entities in which a party has an ownership interest, ensuring that the obligations extend beyond the individuals directly involved in the agreement.
What if one provision of the NCND agreement is found invalid?
If any provision of the NCND agreement is deemed invalid or unenforceable, the remaining provisions will still remain in effect. This ensures that the overall integrity of the agreement is maintained, even if one part is challenged.
Can the NCND agreement be modified?
Any modifications to the NCND agreement must be made in writing and signed by both parties. This requirement helps ensure that any changes are mutually agreed upon, preserving the original intent and protections of the agreement.
Understanding the Non-Circumvention and Non-Disclosure (NCND) form is essential for anyone involved in business transactions. Here are some key takeaways to keep in mind:
By keeping these points in mind, parties can navigate their business relationships more effectively while safeguarding their interests.
Misconceptions about the NCND form can lead to confusion and mismanagement in business dealings. Here are five common misconceptions:
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IRREVOCABLE AND NON-CANCELABLE
NON-CIRCUMVENTION
AND NON-DISCLOSURE AGREEMENT
WHEREAS, the undersigned parties anticipate entering into various business transactions either between themselves or between themselves and other third parties some or all of whom may have been introduced by one of the parties to the other(s), and
WHEREAS, the parties recognize the inherent value of an introduction or referral which results in a business transaction which is financially beneficial to one or both of the parties, and
WHEREAS, the parties wish to guarantee that all parties are fairly compensated for such introductions or referrals without which the said business transactions might not otherwise have been initiated or concluded,
NOW, THEREFORE, In consideration of the mutual promises herein contained and for other good and valuable consideration, the receipt of which is hereby acknowledged, the undersigned parties, intending to be legally bound, do hereby irrevocably agree as follows:
1.NOT TO CIRCUMVENT, AVOID OR BYPASS EACH OTHER DIRECTLY OR INDIRECTLY.
Neither party, shall deal with, contract with or otherwise conduct business with any individual or entity introduced by the other party without the prior knowledge and written permission of the introducing party.
2.NOT TO AVOID PAYMENT OF FEES OR COMMISSIONS IN ANY TRANSACTION WITH ANY ENTITY.
Neither party shall attempt to avoid payment of any fees or commissions due to the other party in connection with any transaction, including any project, loan, service renewal, extension, re- negotiation, contract, agreement, third party assignment, communication or conversation with any entity which transaction was initiated by or the result of an introduction of the entity by one party to the other.
If an introduction by one party to the other results in the successful conclusion of a business transaction with any individual, entity, company, firm, corporation, or other organization, and either party is not informed of or is unaware of the concluded transaction, the party concluding the transaction hereby agrees and guarantees to pay ANY AND ALL commissions and fees earned or received in connection with the transaction to the uninformed party.
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For purposes of this agreement, a person or entity shall be considered “introduced by” a signatory it if that person or entity is in a “chain” of contacts resulting from an original introduction by a Signatory.
For example: Signatory A (mortgage broker) introduces Signatory B (potential borrower) to Signatory C (potential lender, JV partner, investor, buyer, or other entity). C is unable to participate in the business transaction, but refers B to Third party X (2nd potential lender, JV partner, investor, buyer, or other entity) who enters into a transaction with Signatory B. Since Third Party X would not have been aware of or entered into the business transaction with B and/or C but for the original introduction by Signatory A, Third Party X shall be considered “introduced” by Signatory A and Signatory A shall be entitled to any and all fees or commissions specified under any contract between Signatories A and B or A and C.
3. NON-DISCLOSURE
Each party agrees not to disclose or otherwise reveal to any third party any confidential information provided by the other, particularly that concerning lenders, sellers, borrowers, buyers names, bank information, codes, references and/or any such information advised to the other as being confidential or privileged without the written consent of the other party. Each party agrees to keep confidential the names, addresses, telephone numbers, tax ID numbers, email addresses and fax numbers of any contacts introduced by the other party, unless prior written permission is given by the introducing party.
This agreement is expressly intended to cover negligent or inadvertent disclosure of confidential information, which are also considered violations of this agreement.
4.ADDITIONAL AGREEMENTS OF THE PARTIES.
a.The term of this Agreement shall be five (5) years from the date of its execution and is irrevocable and non-cancelable during that time. It shall apply to any and all transactions between the signing parties themselves or between a signing party and a non-signing third party resulting from an introduction by one signing party to the other signing party, regardless of the success of any specific transaction or project. The parties agree that the identities of third parties who are introduced under this agreement are and shall forever remain, the proprietary asset of the introducing party.
b.This agreement shall be binding on the parties, their successors and assigns, including any business entity in which a party has an ownership interest and shall include any proprietorship, company, firm, corporation, LLC, partnership or other business entity of which the party is an employee, member, officer, partner, or agent.
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cAll moneys due and owing from any client transaction undertaken by both parties will be irrevocably and unconditionally guaranteed to be paid without legal impediment upon request.
d.Should a violation, disagreement or dispute occur between the parties arising out of, or connected with this agreement, which cannot be adjusted by and between the parties involved, the disputed disagreement shall be submitted to the American Arbitration Association located in Denver, Colorado and all parties agree to abide by the decision of the referees of said Association. Judgment, upon award, may be entered in any court having jurisdiction thereof.
Notwithstanding the above, both parties agree to fully disclose and inform one another on a current and ongoing basis of all discussions, negotiations and transactions which are under consideration or discussion with any party which is a subject of this agreement. If a party requests updated information by email or telephone regarding the status of a transaction contemplated herein and the other party does not respond within 24 hours of the request, and the requesting party has reasonable grounds to believe that the lack of response is intentional, then the requesting party, at his or her discretion, may take immediate and appropriate legal action to protect such party’s interests under this agreement. Any party who intentionally fails to respond in a timely manner to a request for an information update under this provision hereby waives any claim for damages against the requesting party if any transaction subject hereto is delayed or not concluded as a result of legal action taken by the requesting party under this provision.
e.In the event of any conflict between the terms of this Agreement and any Loan Authorization Agreement, the terms of the Loan Authorization Agreement shall prevail.
f.In the event that either of the parties resorts to legal action against the other, the prevailing party shall be entitled to reimbursement from the other party for all reasonable attorney fees and other costs incurred in such action.
g.This agreement shall be construed and enforced in accordance with the applicable laws and regulations of the State of Colorado.
h.In the event any one or more of the provisions of this agreement shall, for any reason, be held to be invalid, illegal, or unenforceable, the remainder of this agreement shall not be affected thereby.
i.This agreement contains the entire agreement and understanding concerning the subject matter hereof and supersedes all prior negotiations and proposed agreements, written, or oral. Neither of the parties may alter, amend, nor, modify this agreement except by an instrument in writing signed by both parties, or their duly authorized representatives.
j.Additionally, the parties agree that this instrument may be negotiated via telefax/facsimile/fax transmission, and the respective parties accept the signatures by fax as though they were original.
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BY OUR SIGNATURES WE CONFIRM WE HAVE FULL AUTHORITY TO EXECUTE THIS AGREEMENT AND OBLIGATE ALL ASSOCIATED COMPANIES, FIRMS, CORPORATIONS, PARTNERSHIPS, ORGANIZATIONS, INDIVIDUALS AND/OR ENTITIES CONTEMPLATED HEREIN, WHETHER SPECIFICALLY NAMED OR NOT.
Signature
Dated: ____________
Please Print Name
Company Name (Please print or type)
Dated:
Robert E. Larson, President
Janus Mortgage, Inc
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Inaccurate Information: Providing incorrect names, addresses, or other details can lead to misunderstandings. Accuracy is crucial for the validity of the agreement.
Neglecting Signatures: Failing to obtain signatures from all parties involved can render the agreement unenforceable. Each party must sign to confirm their commitment.
Omitting Dates: Not including the date of execution can create confusion regarding the timeline of the agreement. This date is essential for establishing the term of the agreement.
Ignoring Confidentiality Clauses: Overlooking the importance of confidentiality can lead to unauthorized disclosures. Parties must understand and agree to keep sensitive information private.
Misunderstanding Terms: Failing to comprehend the terms and conditions outlined can result in unintentional violations. It is vital to read and understand all provisions before signing.
When filling out the NCND form, it is essential to follow certain guidelines to ensure accuracy and compliance. Here are five things you should and shouldn't do:
The Non-Disclosure Agreement (NDA) is perhaps the most closely related document to the NCND form. Both agreements aim to protect sensitive information shared between parties. In an NDA, the focus is on keeping proprietary information confidential, ensuring that neither party discloses it to outsiders. Like the NCND, an NDA can include clauses that prevent the sharing of details about business relationships and introductions. The key difference lies in the NDA's emphasis on confidentiality, while the NCND also includes non-circumvention provisions.
A Mutual Non-Disclosure Agreement (MNDA) is similar to the NDA but is typically signed by two parties who will both be sharing confidential information. This is akin to the NCND in that it protects the interests of both parties involved. The MNDA outlines what information is confidential and how it should be handled. Just like the NCND, it includes clauses that prevent either party from using the information for unauthorized purposes, ensuring both sides feel secure in their business dealings.
The Non-Circumvention Agreement (NCA) focuses specifically on preventing one party from bypassing the other to engage directly with introduced contacts. This document is similar to the NCND as it also seeks to protect the financial interests of the parties involved. The NCA ensures that if one party introduces a client or contact, the other cannot exploit that introduction without compensating the introducer. Thus, both agreements work to maintain fair business practices and protect relationships.
Understanding the nuances of various legal documents is crucial for ensuring effective transactions in business, much like the clarity provided by the New York Boat Bill of Sale form, which is an essential legal document for boat ownership transfer. This form, serving as proof of the sale, includes vital information about the vessel and the involved parties, making it indispensable for protecting both buyer and seller. For more detailed insights into this document, consider reviewing the Vessel Bill of Sale.
A Letter of Intent (LOI) often serves as a preliminary agreement outlining the basic terms of a business deal. While it is less formal than the NCND, an LOI can include confidentiality and non-circumvention clauses. This makes it similar in purpose, as both documents aim to set the stage for future agreements while protecting the interests of the parties involved. However, an LOI is generally not legally binding in the same way the NCND is.
The Confidentiality Agreement is another document that shares similarities with the NCND. This agreement focuses on the obligation of one or both parties to keep shared information private. Like the NCND, it aims to prevent unauthorized disclosure of sensitive information. However, the Confidentiality Agreement may not include the non-circumvention elements that are essential in the NCND, which makes the latter more comprehensive in protecting business relationships.
A Partnership Agreement is a more extensive document that outlines the roles, responsibilities, and obligations of partners in a business venture. While it is broader in scope, it can include non-circumvention and confidentiality clauses similar to those found in the NCND. Both documents aim to protect the interests of the parties involved, though a Partnership Agreement also addresses the operational aspects of a business relationship.
The Business Cooperation Agreement (BCA) is designed for parties that intend to work together on a project or venture. Like the NCND, it can include provisions for confidentiality and non-circumvention. The BCA outlines the terms of cooperation, ensuring that both parties are aware of their rights and responsibilities. This is similar to the NCND’s goal of protecting the interests of both parties in a business context.
Finally, the Service Agreement is often used when one party provides services to another. While it primarily focuses on the terms of service, it can also include clauses that address confidentiality and non-circumvention. This makes it somewhat similar to the NCND, as both documents seek to establish clear expectations and protect sensitive information shared during the business relationship.