I have an object which has a circular reference to another object. Given the relationship between these objects this is the right design.
To Illustrate
In the Entity Framework version 4, there is an option available: ObjectContextOptions.LazyLoadingEnabled
Setting it to false should avoid the 'circular reference' issue. However, you will have to explicitly load the navigation properties that you want to include.
see: http://msdn.microsoft.com/en-us/library/bb896272.aspx