Opportunity vs NCND

[Faisal Tunis]

Hey

A few times Ive found myself @ a juncture where I have to decide whether to honor a NCND or completely seize an opportunity myself.

Dont misunderstand- Its not my intention to burn bridges, but sometimes- even though youre ready to pay the toll- the tollgate is unattended and its like the bridge is really a wall bc you cant get anywhere with the person (bridge) youre trying to work with.

Ive decided to risk it and seize the opportunity.

I have a wholesale deal in KC, MO involving 12 properties to 1 buyer and my bridge has been Missing In Action for over 1 week. No phone call, email or text......making me look like a fool and jeopardizing my company's (PROPERTY PUSHERS UNLIMITED) reputation. Im tired of apologizing for whats not my fault.

In this deal, the arrangement was for me and the bridge to be paid by the seller as not to complicate things.

By chance- My attorney knows someone who knows the actual owner of the properties at hand.

The owner has expressed that he "hates" working with my bridge and doesnt think he can get the job done. He says if my buyer is ready I can arrange the deal and he will pay me the entire commission.

Im going for it & I dont feel bad. Should I??

Should I fear a lawsuit?

I would like to know what you would do, or have done, in similar situations.

Peace

Faisal

[Dion DePaoli]

I am glad you posted this question. First, IMO, NCND's are garbage. Second, NCND's from brokers are a worse kind of garbage. I am not a lawyer but have been around the block on these wastes of paper, but do not let that override you should always seek legal counsel from an attorney.

First, NCND, Non Disclosure and Non Circumvent. It has two features, do not disclose and do not circumvent. Aside from the ethics, in most cases it is not enforceable or the enforcement will cost so much money it is not worth it. Those agreement lawsuits are civil matters not criminal, contrary to popular belief.

If 99 people sign your Non Disclosure and 1 person does not, that one person can go post all of your desired non disclosure material in the Wall Street Journal with no recourse from you. Once they do, the other 99 people are no longer bound by your agreement as the information is public knowledge.

In circumvention, it is also a matter of if circumvention happened. Just because I introduce you to Mr. Buyer doesn't mean I own Mr. Buyer nor does it exclude you from doing business with Mr. Buyer away from me. Mr. Buyer could have contacted you or another contact of yours (as in this case) can introduce you. That is not circumvention.

A person is not property and a person can not be owned. Property is protected by non-disclosure such as intellectual property like software coding because it can be substantiated to be unique to some degree. Even that has pitfalls, the real way to protect it is a patent and patents are public knowledge.

A good example is in your post, Owner does not wish to work with the bridge guy, so there is simply nothing he can do. The bridge does not own the Owner and the Owner is free to work with whoever he wants, even if that is you.

Circumvention suits that get enforced are for provable concepts. Examples, you circumvented something not someone, like circumventing security in a software program or regulations from an agency.

The misguided concept of an NCND stems from brokers who want to document the world of people they don't own and don't know. Think about it, what does the broker own and did you circumvent that or disclose that? If he gave you a physical list from his company or person belongs and you posted that EXACT list, that would be bad but if you posted a name off of the list there is no way to prove the name came from the list. It is really that simple.

Additionally, in most NCND agreements, there is no consideration or monetary value, so what are the damages? "I could of made $X" is not a strong legal argument as it can simply be countered with swapping X with $0.

A proper way to document the relationship between two cooperating brokers is a cooperating broker agreement. An agreement specific to a transaction, party and with specific consideration. This is how licensed professionals actually contract together in the legitimate world. Ask any commercial real estate agent, as they tend to have more situations like this, they do not send an NCND, they send a co-op broker agreement and both brokers sign. Then those are the terms (something specific) you can not circumvent. A well drafted cooperating broker agreement will spell out specific performance for each party and have a provision for lack of performance, if you can pull it off.

I will say, while I view them as worthless pieces of paper I make a habit out of not even executing them. They become broker annoyances so I would rather just avoid them all together. Additionally, having a mature view on circumvention helps. You will not circumvent with my client because I have already established a real relationship that brings real value to my client. You are the new guy, not me. In the event, I am the new guy, it is still for the value I provide, that value wins the race not a piece of paper. They will seek the value I provide, as that is my role in the equation. With that, when I seem them, I know there is no "real" relationship between the broker and a party and I squash the broker's expectations of the agreement right then. Honestly, I can't remember the last time I did that and the broker hung up the phone or walked away, apparently I add value for him too, getting something done that he couldn't.

Good luck.