Exclusivity and non-compete

Typical wording

During the term, the customer shall not use equivalent services from a third party within the scope of the agreement.

What it means

You tie yourself to one supplier in this area for as long as the agreement runs, even if others turn out to be better or cheaper.

Common practice

Exclusivity occurs, but is normally limited in time, geography or product area. Wide and long commitments can also raise questions under the competition rules.

What to look for

• How broad is the area the commitment covers?
• How long does it last, and does it apply after termination?
• Do you get something concrete in return - price, volume, priority?
• Are there carve-outs for services the supplier cannot deliver itself?

Source