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| Exclusive Rights |
Exclusives
Frequently, distributors, wholesalers, sales representatives and others in the product distribution chain will request an "exclusive" territory or "exclusive distributorship" from a manufacturer or supplier. In this type of arrangement, the manufacturer or seller agrees not to appoint or sell to another dealer in the same area. This greatly assists the distributor or sales representative because it need not then worry about competition in the sale of the same products.
Exclusive Distributorships
The grant of an exclusive distributorship is generally permissible. Although these arrangements could result in a "refusal to deal" by the manufacturer with other distributors, they do not usually result in any antitrust review or antitrust problems. However, if the granting of an exclusive distributorship is part of a plan to monopolize at either the buyer‘s or seller‘s level, or if there is a possibility that competition will otherwise be adversely affected, antitrust laws may apply.
For related information see:
Antitrust Laws
Exclusive Dealing
Restrictions in the Resale of Goods
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