What is an NCNDA?
A Non-Circumvention, Non-Disclosure Agreement (NCNDA) is a contract used when intermediaries introduce counterparties to each other. It combines two promises: not to bypass the introducer to deal directly, and not to disclose the confidential information exchanged.
At a glance
| Term | NCNDA |
|---|---|
| Definition | Non-Circumvention Non-Disclosure Agreement — protects parties from being bypassed in a deal chain. |
| Category | Contracts & agreements |
| Related terms | IMFPA |
What it is used for
Commodity trading runs on introductions, and an introducer's only asset is the relationship. The NCNDA is intended to preserve that asset long enough for a deal — and a commission — to be concluded.
Key points
- Names the protected parties, the introduced parties and the transactions covered.
- Sets a protection period, commonly one to five years from introduction.
- Usually paired with an IMFPA, which handles how the commission is actually paid.
- The ICC publishes model non-circumvention wording that is more robust than most circulated templates.
What to watch for
- Enforceability varies sharply by jurisdiction, and proving a breach is expensive and often impractical.
- An NCNDA cannot protect a party who was already known to the other side — introduction must be genuine.
- Templates circulating in broker chains are frequently unsigned, undated, or missing a governing law clause, which makes them close to worthless.
Frequently asked questions
Is an NCNDA enforceable?
In principle yes, as a contract, but outcomes depend heavily on governing law, drafting quality and evidence. Treat it as a deterrent rather than a guarantee.
How long does an NCNDA last?
Whatever period it states, commonly one to five years. Very long periods can be challenged as unreasonable restraint in some jurisdictions.
Do I need an NCNDA and an IMFPA?
They do different jobs. The NCNDA protects the relationship; the IMFPA secures payment of the fee. Intermediaries usually want both.
Related terms
Lodfy verifies every company on the platform — registration, ownership and sanctions screening — before they can trade.