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In this video, Simon from the Contract Company discusses the essential clause that every distributor should include in a distribution agreement: exclusivity. He explains that as a distributor, it's crucial to secure exclusive rights to distribute goods in a specific region. This exclusivity ensures that if the distributor invests time and money in marketing the brand or product, they are the sole entity allowed to sell those goods in that area, preventing competition from the supplier or other distributors. Simon emphasizes that exclusivity is vital for protecting the distributor’s interests and maximizing their market potential.