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An exclusivity clause is a commitment in a contract to engage exclusively with one party for specific activities. For example, a business might designate a supplier as their exclusive provider of water for North America for two years. Sometimes, these clauses may not explicitly use the term "exclusive," such as a statement committing to purchase all water from a supplier, which nonetheless creates exclusivity. Although not commonly found in all agreements, these clauses can be significant in major business deals, potentially involving substantial financial implications, like being the exclusive distributor or licensee in a certain region for a set time. Violating these clauses can have serious consequences.
