Is a contract that restricts you from offering any discounts to all ,except for ones referred by another business, enforceable?

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Is a contract that restricts you from offering any discounts to all ,except for ones referred by another business, enforceable?

Our association asked a business if they would like to offer an independent special discount to our members in exchange for a listing in our directory. The business replied that they would love to participate in our partner program. Unfortunately, they “have just signed an exclusive 6 month agreement with another association” that does not allow them to offer special pricing/discounts outside of referrals from this other association. Is this legal?

Asked on June 26, 2011 under Business Law, Wisconsin

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

It is definitely legal. Nothing in the law requires anyone to offer any discounts or deals ever. And nothing in the law makes it illegal to agree to give better pricing or discounts or etc. to person or organization A than to person or organization B. The law allow allows someone to execute and be bound by a contract to do essentially anything that is legal. Since a business may choose to give one entity a better deal than another, and is not forced to give anyone any discount if they don't want to, the business may sign a contract stating that they will only give discounts, etc. to one association, and if they do, that contract is enforceable. So yes, a contract like the one you describe may or may not be wise or fair, but it is legal.


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