A Canadian Non-Circumvention Agreement is a restrictive covenant contract that prevents one party from bypassing another to deal directly with business contacts, clients, suppliers, or opportunities that were introduced through the relationship. It protects the introducing party's proprietary business relationships and ensures they are not cut out of transactions they facilitated.

Non-circumvention agreements are treated as restrictive covenants under Canadian common law, which means they are subject to the same enforceability framework that applies to non-compete and non-solicitation agreements. The Supreme Court of Canada's landmark decision in Shafron v. KRG Insurance Brokers (2009 SCC 6) established that restrictive covenants must be clear, unambiguous, and reasonable in scope, duration, and geographic limitation. Courts will not use notional severance to rewrite vague or overly broad terms — if the restriction is ambiguous, it is unenforceable in its entirety.

The agreement must also comply with the Competition Act (R.S.C. 1985, c. C-34), which prohibits agreements that unduly restrict competition, fix prices, or allocate markets. A non-circumvention agreement between competitors must be carefully drafted to protect legitimate business relationships without constituting market allocation or customer division prohibited under Part VI of the Act.

Canadian courts have recognized that the diversion of business contacts can constitute irreparable harm justifying injunctive relief. To obtain an interim injunction, the aggrieved party must demonstrate a serious issue to be tried, that damages would be an inadequate remedy, and that the balance of convenience favours granting the injunction. Including an injunctive relief clause in the agreement strengthens the applicant's position.

When introducing a business contact, client, or supplier to a partner, agent, or intermediary, and the introducing party needs assurance that the other party will not bypass them to deal directly with the contact in future transactions.

When engaging a broker, finder, or intermediary to source deals, investments, or business opportunities, and the principal needs protection against the intermediary cutting them out of transactions with contacts they provided.

When forming a joint venture or strategic alliance where each party brings proprietary business relationships to the table, and both need assurance that their contacts will not be poached by the other party after the venture concludes.

When sharing a proprietary client list or supplier network with a distributor, sales agent, or marketing partner, and the disclosing party needs contractual protection against direct dealing.

When entering international trade arrangements where one party introduces the other to overseas buyers, manufacturers, or distributors, and the introducing party needs protection in a jurisdiction where enforcement may be more challenging.

Without a non-circumvention agreement, the introducing party has no contractual remedy when their business contacts are approached directly, and common law claims for unjust enrichment or breach of fiduciary duty are difficult and expensive to prove.

Identification of Protected Contacts — A clear description or list of the specific business contacts, clients, suppliers, or opportunities covered by the agreement. Under Shafron v. KRG, vague descriptions of the protected scope will render the covenant unenforceable. The more precisely the contacts are identified, the stronger the protection.

Definition of Circumvention — An explicit statement of what constitutes circumvention: directly or indirectly contacting, soliciting, transacting with, or entering into any business arrangement with protected contacts without the introducing party's written consent.

Reasonable Duration — A time-limited restriction, typically two to five years for commercial arrangements. Canadian courts are more likely to enforce restrictions that are proportionate to the legitimate business interest being protected. Indefinite restrictions face a higher risk of being struck down.

Geographic Scope — If applicable, define the geographic territory covered by the non-circumvention obligation. For industry-specific or relationship-specific agreements, geographic limitations may be less relevant than specifying the protected contacts themselves.

Competition Act Compliance — A provision ensuring the agreement does not constitute market allocation, customer division, or restraint of trade prohibited under Part VI of the Competition Act. This is particularly important when the parties are actual or potential competitors.

Compensation and Damages — The method for calculating damages if circumvention occurs, such as a percentage of the transaction value, lost commission, or liquidated damages. Liquidated damages clauses must represent a genuine pre-estimate of loss to be enforceable in Canada.

Injunctive Relief — A clause acknowledging that circumvention may cause irreparable harm not adequately compensable by monetary damages, entitling the aggrieved party to seek injunctive relief. This clause is critical because business relationship damage is often irreversible.

Confidentiality of Contact Information — An obligation to treat all introduced contacts and associated information as confidential, preventing the receiving party from disclosing contact details to third parties.

Governing Law — The province whose laws govern the agreement, which determines the applicable reasonableness standard and the court with jurisdiction over enforcement proceedings.