Define: Client
In a contract, a Client is any person, firm, company or other organisation to whom the Company distributed, sold or supplied goods or services during a defined period, typically the 12 months before termination, and with whom a business relationship existed. The term identifies whose custom is protected, restricted or transferred under the agreement.
Legal accuracy standard set & glossary spot-checked by Imad Mohammed Nazar , Skadden-trained M&A lawyer, Legal Engineer at GenieAI
What Client Means in a Contract
A Client, as defined in a commercial contract, refers to any person, firm, company or other organisation whatsoever to whom or which the Company distributed, sold or supplied goods or services during a specified look-back period, usually the twelve months immediately preceding the termination date of the relevant agreement. This definition is deliberately broad, capturing individuals and entities of any legal form so that no potential business relationship escapes the scope of the clause in which the term is used.
The purpose of defining Client this precisely is to give certainty to obligations that depend on identifying who counts as a customer of the business. This matters most in agreements involving agents, distributors, employees or consultants, where restrictive covenants, commission structures or confidentiality duties are tied directly to the existence and identity of Clients rather than to a vague notion of.
Relevant Circumstances
- When non-solicit restrictions cover counterparties supplied during the last 12 months
- If the leaver's direct involvement defines which clients are protected
- Where evidence of business done with the client supports enforcement
Relevant Sectors
- Trade & Commerce
- Legal Services
- Business Services