Exclusivity Clause

In one sentence

A contract provision requiring one or both parties to deal exclusively with each other and not with competitors.

Plain English

An exclusivity clause is a contractual promise that one or both parties will work only with each other and not with rival companies or individuals. For example, a retailer might agree to sell only one brand of shoes in their store, or a musician might promise to record only for one record label. Exclusivity protects each party's investment and relationship but can limit flexibility. These clauses are common in distribution, licensing, employment, and franchise agreements.

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Example

A coffee shop's supply agreement includes an exclusivity clause requiring the shop to purchase all its coffee beans from one specific roaster and no other suppliers.

Used in a sentence

“The exclusivity clause in the distribution agreement prevented the manufacturer from selling through other wholesalers in that region.”

Related terms

Non-Compete Clause

A contract provision restricting one party from competing in the same business or industry for a set time and location.

Non-Solicitation Clause

A contract provision preventing one party from recruiting or doing business with the other party's employees or customers.

Breach of Contract

Failure to do what a contract requires, without a valid legal excuse.

Good Faith and Fair Dealing

A legal duty to act honestly and fairly when making and performing contracts.

Consideration

Something of value exchanged by each party to make a contract binding.

Material Breach

A significant failure to perform a contract obligation that defeats its core purpose.

Offer

A proposal to enter into a binding agreement on specific terms.

Acceptance

Agreeing to the exact terms of an offer, creating a binding contract.

This page is a plain-English reference and is not legal advice. Laws vary by jurisdiction and change over time. For specific situations consult a licensed attorney.