Exclusivity Clause
Category: Legal
Definition (plain English)
A contract clause limiting one or both parties from selling, buying, appointing others, or operating in a territory, customer group, channel, or product category.
Why it matters commercially
Exclusivity can protect a distributor investment, but it can also block growth, trap stock, create channel conflict, and make weak buyer performance expensive.
Example
An exporter granted territory exclusivity only after the distributor accepted minimum purchase volumes, reporting duties, and a right to end exclusivity for underperformance.
Common mistake
Granting exclusivity without defining territory, term, products, channels, minimum volumes, performance review, and termination triggers.
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