Commercial Transactions

The exclusivity of an agreement is an important part of negotiating any business deal and plays a large role in licensing agreements and distributorship agreements.  Making a distributorship agreement exclusive means that only the distributor with the exclusive right may sell the products.  Similarly, an exclusive license means that only the licensee can use the license.  This exclusivity provides a major business advantage, ensuring that the exclusive distributor or licensee will not face any competition from other companies distributing the same product or using the same license.

An undertaking not to compete is a clause often used in commercial contracts in industries where competition is fierce.  The clause aims to prevent a partner company or employee from engaging in business with a competitor during the term of the contract.  In some cases, the undertaking not to compete, also sometimes called a non-compete clause, may prevent competition even after the contract ends for a set period of time.