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An exclusivity clause is a contractual commitment to conduct specific transactions with only one party. For instance, a contract may state that a company is the exclusive supplier of water for North American operations for two years. Alternatively, it may specify that all water purchases for that period must come from that supplier, which creates an exclusive obligation without explicitly using the term "exclusive." Although not very common, exclusivity clauses can appear in significant business agreements and can have considerable financial implications. Violating these clauses can lead to serious consequences, making it crucial to adhere to the terms set forth in such contracts.
