Supplier Exclusivity Agreement Definition
A supplier exclusivity agreement is a contract between a company and its supplier in which the supplier agrees to only sell its products or services to that company. The agreement can be for a specific period of time or indefinitely. It is important to note that these types of agreements are not exclusive to the supply of goods, but can also be used in service agreements.
The purpose of a supplier exclusivity agreement is to guarantee that a company has a reliable source of goods or services and to protect it from competition. This type of agreement can be used when a company is launching a new product and needs to ensure that it has a steady supply of raw materials, or when it wants to lock in prices for an extended period of time.
Supplier exclusivity agreements can be beneficial for both parties. They can provide stability and security for the company, as well as guaranteed sales for the supplier. However, these types of agreements can also limit competition and raise prices for consumers.
