Define: Prospective Customer

What Prospective Customer Means in a Contract

A Prospective Customer is a person or entity that has not yet become an actual customer but has been engaged in some meaningful way by an organization for the purpose of future trade. This might include entities that received a proposal, attended a sales pitch, submitted a request for quote, or were otherwise actively pursued within a stated timeframe. The concept exists to extend certain contractual protections, most commonly non-solicitation and confidentiality obligations, beyond an organization's existing client base to relationships that are still developing.

The term matters because many commercial disputes hinge on whether a departing employee or a competing business improperly targeted someone the original organization was actively courting. Without a defined category for prospective relationships, protections might only apply to signed customers, leaving a gap that could be exploited. By naming Prospective Customer as a distinct defined term, a contract closes that gap and gives both parties clarity about the scope of restricted conduct.

How Prospective Customer Is Defined or Measured

Most agreements measure the status of a Prospective Customer by reference to a specific lookback period, commonly expressed in months, during which some qualifying activity occurred. That activity might be a submitted bid, a signed non-disclosure agreement, a scheduled meeting, or documented communication expressing interest in the organization's goods or services. The precision of this measurement is important because vague language such as.