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An exclusivity clause is a contract that commits one party to exclusively engage with another in certain activities. For example, a company may designate a supplier as its exclusive source of water for North American operations for two years. Sometimes these clauses are implied rather than stated explicitly; a contract might specify that all water purchases must come from a certain supplier, creating an exclusivity commitment without using the term "exclusive." While not extremely common, exclusivity clauses can be significant in major business agreements, potentially holding substantial financial value. Violating these clauses can lead to serious consequences.
