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ARTICLE · 19 AUGUST 2020

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Exclusivity Clauses In Commercial Agreements-Issues Under Indian Competition Law

Vaish Associates Advocates
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Exclusive clauses in commercial arrangements such as purchase and supply agreements, dealership agreements are commonplace in the supply chain.

IndiaAntitrust/Competition Law
MM Sharma, Head Competition Law & Policy Practice
MM Sharma, Head Competition Law & Policy Practice
Anand Sree
Anand Sree
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Article by MM Sharma, Head Competition Law & Policy Practice, Vaish Associates, Advocates, New Delhi, India
Anand Sree, Senior Associate.

Exclusive clauses in commercial arrangements such as purchase and supply agreements, dealership agreements are commonplace in the supply chain. They are either encountered upstream (while purchasing a good/service) or downstream (while selling a good/service). Competition law recognizes two broad categories of exclusive agreements, i.e., (a) Exclusive Supply Agreements; and (b) Exclusive Distribution Agreements, based on whether the restriction operates upstream or downstream.

Exclusive Supply Agreements

Exclusive Supply Agreements are defined under Section 3(4)(c) of the Competition Act, 2002 ("Act") as agreements restricting the purchaser from purchasing/dealing with goods other than those of the seller. Exclusive supply agreements operate a restriction on the seller. Exclusive supply agreements are also known as 'single

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