Question 1

Are exclusive dealing agreements legal?

Accepted Answer

Generally yes, as long as they don't unreasonably restrict competition. U.S. antitrust law (Clayton Act, Section 3) and EU competition rules prohibit exclusive arrangements that substantially lessen competition. Small businesses rarely run into antitrust issues, but market-dominant companies need to be careful.

Question 2

What's the difference between exclusive dealing and a non-compete?

Accepted Answer

Exclusive dealing restricts who you do business with during the contract. A non-compete restricts what you can do after the contract ends. An exclusive supplier agreement says 'buy only from us while we're working together.' A non-compete says 'don't work for our competitors after you leave.'

Question 3

Can I get out of an exclusive dealing contract?

Accepted Answer

Only if your contract has termination provisions that allow it. Some include performance benchmarks — if the exclusive partner doesn't hit minimum purchase volumes or service levels, you can exit. Without an out clause, you're locked in for the full term.

Question 4

What happens if I violate an exclusive dealing clause?

Accepted Answer

The other party can sue for breach of contract and seek damages — typically lost profits from the sales you diverted elsewhere. They might also seek an injunction to stop you from working with competitors immediately.

Question 5

Should I sign an exclusive dealing agreement?

Accepted Answer

It depends on what you get in return. Exclusivity without meaningful benefits (better pricing, guaranteed volumes, marketing support) is a bad deal. Always negotiate a minimum commitment from the other side and include exit provisions tied to performance.

Exclusive Dealing

Definition

In Practice

Common in these contract types

Related terms

Frequently asked questions about exclusive dealing

Create a contract with proper exclusive dealing clauses