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An exclusivity clause is a contractual agreement stipulating that one party will only engage in certain activities with another party. For example, it may state that a specific supplier is the exclusive source of water for a company's North American operations for two years. Sometimes these clauses don't explicitly mention "exclusive," but they still enforce exclusivity, such as agreeing to purchase all water from a supplier. While not very common, exclusivity clauses can arise in significant business agreements and can be financially valuable, like being the exclusive distributor of a product in a specific region. It's crucial to adhere to these clauses to avoid breaches.
