An exclusivity clause gives a party exclusive rights over a product, territory or market. It can protect commercial relationships while restricting dealings with other businesses. Check that the wording reflects your intended arrangement. Restrictions on market access may raise competition concerns, depending on the agreement and market conditions. This article explains the key considerations when drafting exclusivity clauses to help reduce risk.<\/p>\n\n\n\n
An exclusivity clause is a contractual provision<\/a> that grants one party exclusive rights, such as over a particular market, territory, or product. A contractual provision is a term within your agreement.<\/p>\n\n\n\n In practice, a party receives exclusive rights that prevent the other party from engaging in comparable dealings elsewhere. The restriction may benefit one party or both parties. It can provide more certainty about the commercial relationship.<\/p>\n\n\n\n For example, a marketing agency may be contractually prohibited from working with its client\u2019s direct competitors. A supplier may be appointed as the sole provider of goods for a specific market. Define the scope, duration and limits carefully to avoid unintended consequences.<\/p>\n<\/div>\n\n\n\n In certain high-value deals, exclusivity can protect a negotiated commercial right. For example, a customer may agree to source all its requirements for a particular product exclusively from a specific supplier.<\/p>\n\n\n\n Your business may use exclusivity to support its competitive position. Consider what you plan to invest before deciding how much protection to seek. The commercial benefit should explain why you want the restriction.<\/p>\n\n\n\n Before agreeing to an exclusivity clause, consider whether it supports your commercial objectives. You may lose opportunities to take on other work. Consider negotiating higher fees if the restriction would prevent you from accepting more profitable opportunities.<\/p>\n\n\n\n\n\n Continue reading this article below the form\n <\/i>\n<\/a>\nWhen Can Exclusivity Help Your Business?<\/h2>\n\n\n\n
\n