Is an exclusivity clause legal?

Yes, provided it is proportionate: limited in time, territory and scope, and justified by the investment or commitments of the beneficiary. A clause that locks a market for too long can breach competition law.

What is the difference between exclusivity and a non-compete clause?

Exclusivity applies while the contract is in force and reserves a product, territory or customer base. A non-compete clause restricts activity after the contract ends and is subject to stricter conditions.

How long should an exclusivity clause last?

The duration should match the time needed to recover the beneficiary's investment, often one to five years. Linking renewal to the achievement of targets keeps the clause balanced.

Clause templatesCommercial

Exclusivity clause

An exclusivity clause prevents one party from working with competitors, or reserves a territory or channel to its partner. It secures the investment of a distributor or provider. Because it restricts competition, it must be limited in scope, territory and duration and offset by real commitments.

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Clause template

1. For the duration of this contract, [GRANTING PARTY] grants [BENEFICIARY] the exclusive right to [DISTRIBUTE / SUPPLY / PROMOTE] [PRODUCTS OR SERVICES] in [TERRITORY] through [CHANNELS]. 2. During the same period, the Granting Party shall not appoint any other [DISTRIBUTOR / PROVIDER] in the Territory for the same products or services. 3. In return, the Beneficiary undertakes to achieve the following minimum targets: [VOLUME OR REVENUE] per [PERIOD]. 4. If the minimum targets are not met for [NUMBER] consecutive periods, the Granting Party may, after written notice, convert the exclusivity into a non-exclusive right or terminate the contract. 5. Exclusivity applies for [DURATION] from [DATE] and does not survive termination of the contract, unless otherwise agreed in writing. 6. This clause shall be interpreted in accordance with applicable competition law.

Replace the bracketed items before use.

Variants

Exclusive supply (buyer side)

For [DURATION], [BUYER] undertakes to purchase exclusively from [SUPPLIER] its requirements of [PRODUCTS] for its activity in [TERRITORY], provided that the Supplier delivers within the agreed deadlines and at prices in line with market conditions. If the Supplier fails to meet these conditions, the Buyer may source from third parties for the affected quantities.

When to use it

Appointing an exclusive distributor or agent in a country
Influencer or brand ambassador partnerships
Supply contracts where the buyer undertakes to source from a single supplier
Joint development of a product or market

Mistakes to avoid

Granting exclusivity without a time limit or minimum targets
Defining the territory or products so broadly that the clause becomes anti-competitive
Confusing exclusivity during the contract with a post-termination non-compete obligation
Failing to provide a sanction or exit route if targets are not met

Country-specific notes

France
The Commercial Code limits exclusive supply clauses to ten years; an excessive commitment is generally reduced to that limit rather than annulled.
Source: Lettre des Réseaux, Quelle durée pour un approvisionnement exclusif

Contracts that use this clause

Frequently asked questions

Yes, provided it is proportionate: limited in time, territory and scope, and justified by the investment or commitments of the beneficiary. A clause that locks a market for too long can breach competition law.

Other Commercial clauses

Sources

Lettre des Réseaux, duration of exclusive supply clauses

Indicative template, to adapt to your situation. It does not replace legal advice.

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Exclusivity clause

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Variants

Exclusive supply (buyer side)

Mistakes to avoid

Granting exclusivity without a time limit or minimum targets

Defining the territory or products so broadly that the clause becomes anti-competitive

Confusing exclusivity during the contract with a post-termination non-compete obligation

Failing to provide a sanction or exit route if targets are not met