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Non-solicitation clause
Also called non-solicit, protected merchant clause.
A provision in an ISO or broker agreement restricting who may approach a funded merchant - typically barring the broker from moving them, and sometimes barring the funder from bypassing the broker.
Drafted with AI assistance. Not yet independently checked. Nobody has verified the claims on this page against a source, so treat the figures and legal points as a starting point rather than as settled, and confirm anything you are about to act on. How we check things.
What it means
The clause runs in one or both directions. Against the broker: no marketing competing products to merchants funded through this funder, for a stated period, usually measured from the last funding. Against the funder: no direct renewal solicitation of the broker's merchants without paying the broker, or no disclosure of the merchant to other channels.
Scope is where the money is. A clause covering merchants "submitted" to the funder is far broader than one covering merchants "funded" - the first captures every file you shopped there and lost. Duration is measured from different events in different agreements. And a protected-merchant list, if the agreement contemplates one, is worth insisting on so the scope is knowable rather than argued about later.
Enforceability of restrictive covenants between businesses is governed by state law and varies considerably in how courts treat duration, geographic scope and legitimate interest. Several states have moved against restrictive covenants in employment contexts, which does not automatically carry over to commercial agreements between counterparties.
Where this one catches people
Most drafts protect the funder's book and say nothing about the broker's. Check whether the funder is restricted at all - if it can renew your merchant directly at a rate that pays you nothing while you are barred from touching them for a year, the clause is a one-way transfer of your customer relationship, agreed to in the paperwork you signed to get paid on the first deal.
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Non-solicitation clause — common questions
What does non-solicitation clause mean?
A provision in an ISO or broker agreement restricting who may approach a funded merchant - typically barring the broker from moving them, and sometimes barring the funder from bypassing the broker.
Where does non-solicitation clause catch people out?
Most drafts protect the funder's book and say nothing about the broker's. Check whether the funder is restricted at all - if it can renew your merchant directly at a rate that pays you nothing while you are barred from touching them for a year, the clause is a one-way transfer of your customer relationship, agreed to in the paperwork you signed to get paid on the first deal.
Is non-solicitation clause the same as an interest rate?
Non-solicitation clause is defined above; if you are comparing it against a rate, check whether the two measures share a time dimension before you put them side by side.
Which products does non-solicitation clause apply to?
It is not specific to one product — it appears across the market.
Is there a worked example of non-solicitation clause?
Not on this entry. Where a term is arithmetic, the arithmetic is shown; this one is not primarily a calculation.
What else should I read alongside non-solicitation clause?
Commission, ISO agreement, Rate sheet, Renewal, Residual.
Has this definition been checked?
Not yet. This entry is drafted and live, and the notice at the top says so. Confirm anything you are about to act on.
Is this legal advice?
No. It is a definition. What a clause does in your contract, in your state, is a question for a lawyer licensed where you are.
Can I suggest a term?
Yes — [email protected]. The glossary grows from what people are actually shown in contracts.