Duration and terminability. The duration and resilience of an exclusive trade agreement are technically covered by silo and competitive damage analyses, but these factors generally affect an exclusive sales right. Shorter-term agreements (one year or less) or those that can be easily terminated are more likely to convince a judge, jury or agency that the contract has not been harmed or excluded. Exclusive trading agreements are legal in accordance with the provisions of the Sherman Act and the Clayton Act. The legality of the agreement is examined by the Court of First Instance as follows: in summary, while exclusive distribution may harm consumers in certain circumstances, it may also produce efficiency gains and there is no simple way of determining, even if harm is possible, whether a particular exclusivity agreement should be held to be anti-competitive. (95) As one participant in the debate noted, current economic theory, as regards exclusivity, provides `possible outcomes` in simple attitudes which show that, in certain circumstances, damage could occur, not that it will not. (96) Although all participants recognised that exclusive distribution can benefit consumers, it is difficult to demonstrate the existence of these benefits, let alone to estimate their level. (97) In its first decision condemning exclusive trade under antitrust law, the Supreme Court examined a contract which prohibited a Standard Fashion retailer from holding clothing models from other manufacturers. After the retailer began holding another line of reference, Standard Fashion sought damages from the retailer for infringement. The court upheld the dismissal of the appeal on the grounds that the contract was contrary to the Clayton Act. The court found that Standard Fashion controlled forty percent of model sellers in the country and found that Standard Fashion`s exclusive trade agreements “must be in the hundreds, perhaps in thousands of small municipalities.
a monopoly. (19) If your competitor uses exclusive trade agreements, you may be upset, but in most cases, exclusive trade agreements are legal under antitrust laws. . . .