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Can you make a contract with another business to exclude other businesses from making the same deal?

Ah yes the powerful exclusivity agreement. US contract law forbids very little so an agreement like this is surely allowable. There are some things to keep in mind with these types of contracts though:

  • Consideration is needed. Like any contract, each party needs to receive a benefit or right from it.
  • Be sure to be as explicit as possible regarding the terms as a court will not go out of its way to find a valid agreement. This includes listing the start and end date of the arrangement.
  • Most exclusive agreements don’t implicate antitrust laws especially if they are short-term in duration (but it’s possible).
  • You can structure the agreement so that contract can be broken at any time. Alternatively, the contract can lay out terms that penalize a party for opting out.
  • You can be held to the exclusivity agreement even if one party goes bankrupt. Make sure the contract addresses this situation.

Stop by LawTrades a quick & easy price quote to have an experienced business attorney draft your exclusivity contract. If a dispute ever reaches court, the terms of the contract will be strictly construed so it’s important to have a professional aid you in the process. Good luck!

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