ANTIDIVERSION CLAUSE Meaning and
Definition
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An antidiversion clause is a legal provision often found in contracts or agreements, specifically in supply chain management or distribution contracts, which aims to prevent the unauthorized diversion or redistribution of goods. This provision acts as a protective measure for the parties involved, typically the manufacturer or supplier and the distributor.
The antidiversion clause stipulates that the distributor must only sell the specified goods to authorized end-users or within the approved geographic region. It prohibits the distributor from selling the goods to unauthorized buyers or redirecting them to different markets or territories without explicit consent. The clause aims to maintain strict control over the distribution channels and ensure that the manufacturer's intended market and customers are precisely served.
By implementing an antidiversion clause, the manufacturer or supplier can enforce brand integrity, protect market share, and prevent product counterfeiting or unauthorized parallel imports. It provides a mechanism to maintain pricing and distribution control, which is vital for managing the reputation and exclusivity of the goods.
In case of a breach of the antidiversion clause, the manufacturer or supplier typically has the right to terminate the agreement or seek legal remedies. However, the specifics and consequences of the breach may vary depending on the terms defined in the contract.
Overall, an antidiversion clause is an essential contractual provision that safeguards the manufacturer's distribution strategy and protects the integrity and exclusivity of their goods in the market.
Etymology of ANTIDIVERSION CLAUSE
The word "antidiversion clause" does not have a well-established etymology as it is a legal term and a combination of two separate words with specific meanings in the legal context.
"Antidiversion" is a compound word that combines the prefix "anti-" meaning against, and "diversion" which refers to the act of diverting or redirecting something. In a legal context, the term typically refers to a provision or clause in a contract that aims to prevent the parties involved from diverting funds or resources away from their intended purpose.
"Clause" is a word with Latin origins, derived from the Latin word "clausula" which means a separate section or part of a legal document. In contracts, a clause is a specific provision or statement that outlines a particular condition, rule, or requirement.
