Exclusivity Agreements Solicitors in Manchester, Blackburn and Lancashire

Exclusivity agreements are used to try to ensure that the other party to a prospective deal negotiates solely with the client for an agreed period of time. Also known as lock-out, shut-out or no-shop agreements, they aim to give the client some protection from another party outbidding them during the process of purchasing or selling a commercial property.

Why Do I Need an Exclusivity Agreement?

Any prospective buyer of a commercial property, who is about to commit time and expense to due diligence and lengthy negotiations, will be extremely keen to obtain protection against losing out to a rival bidder after spending time and money on various services during the negotiations process.

From the buyer's perspective, the case for having an exclusivity agreement is strong. It’s fair to say that exclusivity agreements are becoming more and more common in commercial acquisitions, with emphasis placed on intricate due diligence and protracted negotiations becoming the norm. With this in mind, any buyer holds great negotiating strength with sellers becoming more receptive to exclusivity agreements in recent years. The seller has the final say on the length of exclusivity for said property, but the final figure usually follows a period of intense negotiation.

An exclusivity agreement prevents the seller from using the buyer's offer as equivalent to an insurance policy, enabling the seller to seek higher offers elsewhere. It will also allow the buyer a period in which to undertake due diligence and negotiate the deal without the constraints and pressures that would exist if there were competing buyers.

Key Terms of An Exclusivity Agreement

An exclusivity agreement will usually be drafted by the purchasing party’s lawyers and should include the following terms:

• The seller will immediately terminate any existing discussions with third parties.
• During the exclusivity period, which should usually be for a fixed period, the seller may not negotiate or enter into a transaction with a third party. This should be expressed as a negative covenant.
• A statement of the consideration. An exclusivity agreement should be supported by consideration or executed as a deed to be enforceable.

Contact Curtis Law Solicitors Today

If you are in the process of purchasing or selling a commercial property and would like to find out more about exclusivity agreements, please feel free to get in touch with our expert team of corporate solicitors today. You can get in touch by calling 01254 297130, or by using our simple enquiry form below, and one of our expert solicitors will be in touch with you as soon as possible.