Are you a vendor or supplier looking to do business with a company? If so, you may be asked to sign a vendor non-solicitation agreement. This type of agreement is becoming increasingly common as companies seek to protect their customer base and prevent vendors from reaching out to their customers directly.
What is a vendor non-solicitation agreement?
A vendor non-solicitation agreement is a legal contract that prohibits vendors or suppliers from soliciting a company’s customers during and after their business relationship. Basically, it means that as a vendor, you cannot go directly to the customers you served for that company and try to sell them your services/products.
While these agreements are often used when a company is ending its relationship with a vendor, they may be required at the beginning of the relationship or during the contract negotiation process.
Why would a company require a vendor non-solicitation agreement?
The primary reason for a company to require a vendor non-solicitation agreement is to protect their customer base. If a vendor has direct access to a company’s customers, they may be able to bypass the company altogether and sell their products/services directly to those customers. This can result in lost revenue for the company and damage to their customer relationships.
Additionally, a vendor non-solicitation agreement can help to prevent conflicts of interest. If a vendor is soliciting a company’s customers, they may be more inclined to prioritize those customers over the company’s needs.
What should be included in a vendor non-solicitation agreement?
A vendor non-solicitation agreement should include the following information:
1. The name and contact information for both the company and the vendor.
2. The specific terms of the agreement, such as the length of the agreement and any restrictions on solicitation.
3. Any penalties or remedies for breach of the agreement, such as monetary damages or injunctive relief.
4. Signatures of both parties and the date the agreement was signed.
5. A statement acknowledging that the agreement is binding and enforceable under applicable law.
A sample vendor non-solicitation agreement may look something like this:
[COMPANY NAME], hereafter referred to as “Company”, and [VENDOR NAME], hereafter referred to as “Vendor”, enter into this Vendor Non-Solicitation Agreement (“Agreement”) on [DATE].
1. Vendor agrees not to solicit any of Company’s customers during the term of this Agreement and for a period of [LENGTH OF NON-SOLICITATION PERIOD] after termination of this Agreement.
2. Vendor agrees to immediately notify Company in writing if they become aware of any attempt to solicit Company’s customers or if they receive any unsolicited requests for information regarding Company’s customers.
3. In the event of a breach of this Agreement by Vendor, Company shall be entitled to seek monetary damages, injunctive relief, or any other remedies available at law.
4. This Agreement constitutes the entire agreement between Company and Vendor and supersedes all prior discussions, negotiations, and agreements, whether oral or written.
5. This Agreement shall be binding and enforceable under applicable laws.
[COMPANY NAME]
By: ___________________________
Title: __________________________
Date: ___________________________
[VENDOR NAME]
By: ___________________________
Title: __________________________
Date: ___________________________
Final thoughts
If you are a vendor or supplier, it is important to understand the implications of signing a vendor non-solicitation agreement. While it may limit your ability to reach out to a company’s customers, it can also protect your relationship with the company and prevent conflicts of interest. Make sure to review the agreement carefully and seek legal advice if necessary before signing.