Exclusive dealing is not per se or presumptively illegal under either the Sherman Act, 15 U.S.C. Sec. 1-7, or the Clayton Act, 15 U.S.C. Sec. 12-27. Antitrust concerns related to exclusive dealing arrangements are based on the possibility that performance of the contract will foreclose competition in a substantial share of the line of commerce affected. To determine whether a particular exclusive arrangement operates as an illegal restraint on trade, courts apply the rule of reason of whether the restraint imposed is such as merely regulates and perhaps thereby promotes competition or whether it is such as may suppress or even destroy competition.
An Exclusive Dealing Agreement between a Manufacturer and Distributor is a contract between the two parties which defines the terms and conditions of their exclusive business relationship. The agreement typically allows the Distributor to exclusively distribute products manufactured by the Manufacturer, and grants the Distributor exclusive rights to sell the Manufacturer's products. This type of agreement can be beneficial to both parties, as it provides the Manufacturer with a reliable and consistent sales channel and gives the Distributor exclusive rights to market and sell the Manufacturer's products. There are several types of Exclusive Dealing Agreements between Manufacturers and Distributors, including: Exclusive Distribution Agreement, Exclusive Agency Agreement, and Exclusive Marketing Agreement. An Exclusive Distribution Agreement is an agreement between a Manufacturer and Distributor in which the Distributor agrees to exclusively distribute the Manufacturer's products in a specified geographic area. This type of agreement allows the Manufacturer to ensure that the Distributor has exclusive rights to sell their products in the agreed-upon area. An Exclusive Agency Agreement is an agreement between a Manufacturer and Distributor in which the Distributor is granted exclusive rights to act as the Manufacturer's agent in a specified geographic area. This type of agreement allows the Distributor to promote and market the Manufacturer's products, as well as to negotiate the sale of the Manufacturer's products to customers in the agreed-upon area. An Exclusive Marketing Agreement is an agreement between a Manufacturer and Distributor in which the Distributor agrees to exclusively market and promote the Manufacturer's products in a specified geographic area. This type of agreement allows the Distributor to promote and market the Manufacturer's products without having to negotiate the sale of the products.
