

Ask HN: Non-circumvention clauses and distribution agreements - api

I&#x27;ve been approached by a vendor who wants to negotiate a distribution agreement for a piece of software and associated SaaS services. They claim to have a number of identified customers, etc.<p>They&#x27;re asking for (1) a non-circumvention clause, and (2) a geographically exclusive distributor agreement.<p>I have to admit that I&#x27;d never even <i>heard</i> of a non-circumvention clause before this. I&#x27;ve been around the block for a while, and these just do not seem to be common in software or SaaS industries. Even NDAs have gone somewhat out of fashion in many cases, but I&#x27;d not even encountered this beast. Perhaps if I&#x27;d been in sales or marketing instead of corporate dev and engineering I would have seen them.<p>The second part I consider problematic just about to the point of being a show stopper. It frankly does not seem to make much sense. Geography for software and Internet services is kind of hard to even pin down. In many cases you don&#x27;t even know for certain where your users are, etc. It might make sense for a hardware or other physical goods company but I just don&#x27;t get it here.<p>I&#x27;m curious about whether anyone else has ever encountered such a thing before, and when&#x2F;if it would ever make any sense. Or is this bizarre to &quot;run away!&quot; levels?<p>Apologies for the vagueness, but I can&#x27;t disclose exact details or participants.
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anigbrowl
With so little detail that you feel willing to share, how reliable can any
answer that appears here be? Either trust your gut or shell out for a lawyer
to educate you on it. Trying to validate your feelings here is going to be a
fruitless endeavor.

I don't know about the non-circumvention clause; it sounds like a non-compete
which is banned/unenforceable in some jurisdictions but it also sounds like
you're in a potential supplier rather than employee relationship here, so
labor law considerations don't apply. Geographic exclusivity doesn't sound odd
to me at all, and if you don't get the concept then it may be worth your while
to take a course in basic business law or buy a book on the subject to get a
feel for why it matters and why it would make sense; a distributor who wants
rights to particular territory is telling you that that's the scope within
which they're able to carry on business effectively, and that they don't want
to be liable for problems that might arise when dealing with customers from
outside that territory.

 _In many cases you don 't even know for certain where your users are, etc._

You will if you give one of them occasion to sue you and you find yourself
summoned to go to their jurisdiction. If this concept is foreign to you, then
you definitely need to learn more about it. Here's a book that would give you
a cheap-but-decent introduction to business law:
[http://www.amazon.com/Business-Law-
Barrons/dp/0764142402](http://www.amazon.com/Business-Law-
Barrons/dp/0764142402)

You should definitely get legal advice; don't make the mistake of thinking
that your common sense and skill at logic outweigh centuries of established
inter-business legal practice, even though some of the conventions may be
counter-intuitive or seem anachronistic.

~~~
api
I am getting legal advice, and have asked a few others. Just thought I'd ask
here too.

Seems like your advice boils down to 'don't assume it's wrong just because it
might seem anachronistic.'

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brudgers
Ask for references who have been successful with similar terms. Then you will
have a better idea what the arrangement might offer in your situation.

