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An exclusivity clause is a contractual agreement that requires one party to exclusively engage with another party for specific activities. For example, it might state that a supplier is the exclusive provider of water for a company's North American operations for two years. Such clauses can also imply exclusivity without using the word, like committing to buy all water from a supplier in that region. Though not very common, exclusivity clauses can play a significant role in critical business agreements, often associated with substantial financial implications, such as exclusive distribution or licensing rights in particular markets. Violating these clauses can lead to serious consequences.