Exclusivity
A binding commitment in the LOI that the seller will not negotiate with other buyers for a defined period.
Also called: No-shop · No-shop period
Exclusivity is what a buyer receives in exchange for spending real money on diligence. It is normally binding even when the rest of the LOI is not, and it usually runs thirty to ninety days from signing, sometimes with extensions tied to progress.
It is also the moment a seller's leverage changes hands. Before signing, competing interest is what disciplines price and terms. After signing, the seller has one counterparty, a clock, and no alternative — which is precisely the environment in which a re-trade is attempted. Nothing about that is improper; it is simply the structure of the mechanism.
The mitigations are all in the drafting. Keep the period as short as the buyer's process genuinely requires. Tie any extension to milestones rather than granting it automatically. Include termination rights if the buyer materially changes the terms or misses a deadline. And use the pre-LOI period to extract as much specificity as possible, because that is when you still have alternatives.
Where sellers get caught
- Granting ninety days to a buyer whose financing is not arranged.
- Automatic extensions with no conditions.
- Telling other interested parties to go away rather than pausing them. Exclusivity ends; the alternatives should still be reachable.
Common questions
Can I refuse exclusivity?
You can, and some buyers will still proceed, but most will not fund serious diligence without it. The practical negotiation is over length and conditions rather than existence.
What happens if the buyer walks during exclusivity?
The period ends and you are free to talk to others, but you have lost time and the market may notice. That risk is the argument for qualifying the buyer hard before signing.
Related terms
Letter of intent
A mostly non-binding document setting out the proposed price, structure, and process, whose binding provisions typically cover exclusivity and confidentiality.
Due diligence
The buyer's post-LOI investigation of the business, covering financial, legal, commercial, tax, and operational matters.
Business broker
An intermediary who markets a business for sale to a pool of prospective buyers, usually for a success fee.
Quality of earnings
An independent accounting analysis that tests whether reported earnings are real, recurring, and sustainable.
Guides that use this term
Where exclusivity comes up in a real sale, and what it changes.
Last reviewed 2026-08-25. General information for business owners, not legal, tax, or financial advice — terms, thresholds, and tax treatment vary by jurisdiction and by deal.