Exclusive Distributorships Law and Legal Definition
Business arrangements, such as distributorships are regulated under federal legislation such as the Sherman Antitrust Act, the Clayton Act, the Robinson-Patman Act, the Miller-Tydings (Fair Trade) Act, and the Federal Trade Commission Act, to ensure fair competition and business practices. Federal statutes relating to business competition and practices are enforced by a variety of methods, including administrative proceedings before the Federal Trade Commission, civil suits or criminal prosecutions by the government, and civil actions by private persons for injunctive relief or for treble damages.
In general, an exclusive dealing contract or agreement is one in which the buyer agrees not to handle the products of competitors. In a requirements contract, the seller agrees to supply all the requirements of the buyer. Some contract may be a combination of each. In an output contract, the seller agrees to supply the seller's entire output to the buyer. An exclusive distributorship or dealership involves an agrement of the seller not to distribute through the buyer's competitors within a specified area. Under the usual tying arrangement, or tying-in contract, the buyer must take another product or brand from the seller in order to obtain the one that is sought..