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Non-exclusivity clauses, also called non-exclusivity agreements, allow service providers or goods producers to buy and sell services under a non-exclusive arrangement. It’s essential to ensure that clause includes non-exclusive agreement language. A non-exclusivity clause should not conflict with non-solicitation agreements.
Many companies utilize non-exclusivity clauses to achieve competitive advantage. For example, a soda manufacturer has a non-exclusivity agreement with restaurants. However, they can require exclusivity from their restaurant customers.
Here is a forum page that discusses non-exclusivity clauses.
The purpose of non-exclusivity clauses is to enhance market reach for a company. Reach increases financial opportunities. However, there are marketing and branding tradeoffs associated with non-exclusivity clauses, including brand diminishment for some situations.
Examples of non-exclusivity clause use include:
You can see a non-exclusivity clause example on this page.
Sample 1 – Non-Exclusive Distribution Agreement:
Appointment of Nonexclusive Distributor. Subject to the terms and conditions of this Agreement, AOS appoints the Distributor, and the Distributor hereby accepts such appointment, as AOS’S non-exclusive authorized distributor for sale of the Products to the Customers (other than House Account) in the Territory (as these terms are defined in Section 1.8, above).
Reference:
Security Exchange Commission - Edgar Database, EX-10.7 14 dex107.htm NON-EXCLUSIVE DISTRIBUTOR AGREEMENT, Viewed April 6, 2021, < https://www.sec.gov/Archives/edgar/data/1387467/000119312510073586/dex107.htm >.
Sample 2 – Distribution Agreement:
Altera hereby appoints Distributor and Distributor hereby accepts the appointment, as a non-exclusive Distributor of the Products within the Territory.
Reference:
Security Exchange Commission - Edgar Database, EX-10.33 7 dex1033.htm DISTRIBUTION AGREEMENT, Viewed April 6, 2021, < https://www.sec.gov/Archives/edgar/data/768251/000119312505047783/dex1033.htm >.
Sample 3 – Distribution Agreement:
Except as provided in Section 14 of this Amendment, the Distributor’s distribution rights under the Agreement shall be converted into non-exclusive distribution rights as of the Amendment Effective Date, and such non-exclusive rights shall not derogate in any way from Common Sense’s rights with respect to the Products, including without limitation, the right to market, distribute, promote and sell the Products, directly and/or indirectly, in the Territory.
Reference:
Security Exchange Commission - Edgar Database, EX-10.1 2 dex101.htm FIRST AMENDMENT TO DISTRIBUTION AGREEMENT, Viewed April 6, 2021, < https://www.sec.gov/Archives/edgar/data/1316826/000119312507182891/dex101.htm >.
Sample 4 – Distribution Agreement:
Non-Exclusive Territory: The PRC. SweeGen hereby appoints Ingredion's Chinese affiliate, Ingredion China Limited, as a non-exclusive distributor of the Products in the PRC on the terms and conditions set forth in this Agreement. Ingredion China Limited hereby accepts such appointment, and agrees to be bound by the terms and conditions set forth in this Agreement.
In the PRC, SweeGen may sell (i) directly to customers and (ii) may also sell to one other company organized and based in the PRC, or any successor or assignee thereof, as its sole non-Ingredion distributor in the PRC but shall not directly or indirectly make any sales to any third party (other than Ingredion or Ingredion China Limited) which SweeGen knows or has reason to believe intends to resell or otherwise distribute the Products outside of the PRC. SweeGen shall make such sales under its own trademark(s). Sales of Products to House Accounts in the PRC shall be considered for the purposes of establishing a Transfer Price.
Reference:
Security Exchange Commission - Edgar Database, EX-10.1 2 f10q123116_ex10z1.htm EXHIBIT 10.1 DISTRIBUTION AGREEMENT, Viewed April 6, 2021, < https://www.sec.gov/Archives/edgar/data/1580883/000107878217000196/f10q123116_ex10z1.htm >.
Here are a few common contracts with non-exclusivity clauses:
A non-exclusive teaming agreement allows contractors to act as subcontractors in specific situations.
Non-exclusive partnership agreements give non-exclusive parties the right to partner with others, as necessary.
Non-exclusive distributions allow a producer to distribute goods and services to others, including customers and competitors.
Non-exclusive collaboration agreements permit parties to collaborate with others on a project.
Non-exclusive sponsorship agreements give other sponsors a chance to sponsor the same event regardless of contributions.
Below, please find the answers to some common non-exclusivity clause FAQs:
Exclusive agreements limit a party’s ability to work with another, meaning that the exclusive party offers services or products not provided elsewhere. Non-exclusive indicates that the non-exclusive party can work with anyone, including employees, competing products, and customers.
Non-exclusive easements allow numerous parties to utilize an easement. It also means that other parties can receive permission to use the same one in the future. Examples of non-exclusive easements include country road access.
