What is an exclusivity provision?

What is an exclusivity provision?

Exclusivity clauses, also called non-compete provisions, prevent one party from soliciting offers or negotiating with a third party within a specific period. They are often located within a confidentiality agreement.

What does exclusivity agreement mean?

Related Content. Also known as lock-out, shut-out or no-shop agreements. Agreements which are used to try to ensure that the other party to a prospective deal negotiates solely with the client for a period of time. They aim to give the client some protection from another party outbidding them.

What is investment banking exclusivity?

What Does Exclusivity Mean? An exclusivity agreement in the context of a business acquisition stipulates that the seller cannot pursue an offer from another potential buyer for a period of time subsequent to the signing of the letter of intent (LOI).

What is exclusive dealing arrangement?

Exclusive dealing arrangements are essentially requirements contracts in which a seller agrees to sell all or a substantial portion of its products or services to a particular buyer, or when a buyer similarly agrees to purchase all or a portion of its requirements of a product or service from a particular seller.

What is exclusive clause in law?

An exclusivity clause is part of a bigger legal document that restricts the signer from buying, selling, or promoting any goods or services from any person or company other than the issuing company associated with the contract. In other words, the company or individual works exclusively with the issuer of the contract.

What is an exclusivity period?

An exclusivity provision defines a length of time, typically 1-2 months, where a seller cannot deal with any party other than the prospective buyer regarding the sale of the business.

What is the main purpose of exclusivity clause?

Is it illegal to have an exclusive agreement?

Is An Exclusive Dealing Contract an Unlawful Covenant Not to Compete? The State of California possesses a strict code which states that any contracts that prohibit competition are unlawful. The code specifies that any agreement in which a party is prevented from carrying out legal business is prohibited.

Is an exclusivity agreement legal?

If your competitor is using exclusive-dealing agreements, you might be aggravated about it, but under most circumstances exclusive-dealing agreements are legal under the antitrust laws.

Is an exclusivity clause enforceable?

The Small Business, Enterprise, and Employment Act of 2015 made exclusivity agreements in zero-hours contracts unenforceable. If an employer tried to take action against a worker under an exclusivity agreement with a zero-hours contract, that employer could be liable for compensation to the employee.

What are examples of exclusive dealing?

Exclusive dealing is usually defined by the situation where the marketing outlet carries only the product of one manufacturer in a particular product type. For instance, when McDonald’s sells only Coca Cola, that is exclusive dealing.

Why is exclusive dealing illegal?

Broadly speaking, exclusive dealing occurs when one person trading with another imposes some restrictions on the other’s freedom to choose with whom, in what, or where they deal. Exclusive dealing is against the law only when it substantially lessens competition.

What is exclusivity in an M&A transaction?

Exclusivity in the context of an M&A or growth capital transaction is when the buyer (or investor) and seller agree to only talk to that one party to the exclusion of others. Meaning the buyer (or investor) and seller enter into one-on-one discussions, and legally agree to switch off all conversations with other potential buyers and investors.

What does exclusivity mean in a purchase agreement?

Exclusivity . During the term of this Agreement, and except with respect to this Agreement and the transactions contemplated hereby, the Seller agrees that it will not, and will cause the Company, its Subsidiaries and its and their respective directors, officers, managers, employees, Affiliates and other agents…

What are the pros and cons of an exclusivity clause?

Without the clause, a buyer could opt out of selling or promoting a business partner’s goods or services, making it harder for that company to succeed. The exclusivity clause also benefits the buyer because it restricts the seller from making the goods or services available to anyone who is willing to sell or promote them.

What are the exclusivity provisions in a fuel cell technology agreement?

Exclusivity Provisions. Seller hereby grants Buyer limited exclusivity with respect to the fuel cell technology being developed under this Agreement as described in Attachment 3, License and Exclusivity Provisions. Exclusivity Provisions.