Exclusivity agreement for a commercial transaction

by Practical Law Commercial

A template exclusivity agreement for use between two companies in a proposed commercial transaction. Also known as a lock-out or no-shop agreement, this standard document helps parties protect their investment of time and resources during negotiations. It achieves this by preventing either party from entering into discussions with third parties for a specified exclusivity period. It sets out mutual undertakings and defines the scope of prohibited third-party negotiations. It also addresses the legal requirements for enforceability under English law, such as the need for consideration and a reasonable duration, as established in key case law. The agreement also covers remedies for breach, including potential indemnities for transaction costs and the right to seek equitable relief like an injunction and contains key boilerplate clauses on confidentiality, announcements and governing law, providing a solid framework for securing a period of exclusive negotiation.