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Preventing other companies operating in a contract

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one-big-letdown | 11:45 Tue 18th May 2010 | Business & Finance
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Hi All,

I am not sure whether on any one on here will know, but just in-case, i'll ask.

Can a company prevent another company from operating within a certain premises, for instance, by writing it in a contract?

Let me see if I can illustrate what I mean here...

If Advertising Agency X offers advertising opportunities in Location A, but Advertising Agency Y also wants to offer advertising space within Location A (a completely different type as to what Advertising Agency X offers), can Advertising Agency Y really be prevented from doing this by Advertising Agency X stating this in their contractual aggreement between themselves and Location A?

Would this be in contradiction of some sort of law or rule imposed by the Competition Commission or other goverment organisation etc?

You see, the above situation prevents Advertising Agency Y from operating and recieving income...

Any help or points in the right direction to go with this question would be greatly appreciated.

Thanks in advance
Joe.

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Location A can offer a contract to Advertising Agency X giving them exclusive rights for either all or specific types of advertising. Advertising Agency X doesn't have to take up all its rights but it's paid for them, probbaly at a premium.

So yes I'd say it was legitimate.
Question Author
Thanks for your reply.

So, Location A could offer exclusivity rights, but Advertising Agency X couldn't just assume these in their contract, therefore preventing Agency Y from operating at Location A?
Any advertising space has to owned by a third party, I take it thats correct.

The third party can sign a contract with who ever they like, its thier property. If location A has more than one site and Y cannot negotiate with the third parties then thats perfectly legal.

However there was a case in London where the Metro newspaper signed a contract for dump bins on London stations but never used them in the afternoons. The London paper went to the OFT caliming that non use equated to restraint of trade and won.

But you would have to prove that X was trying to put Y out of business and going to the OFT is expensive and time consuming.
Question Author
Thank You, davethedog.

It's like this...

Theres a place I want to put up some of my advertising frames, and charge other people to advertise in them (Location A). I will then pay a commission to Location A for the privilidge of doing so.

However, Location A says I cannot do this within their premises as Location X have said no-one else apart from them can offer advertising within Location A. Can they legally do this?

I'm not going to be offering the ame type of advertising as Agency X do...

Thanks all once again...
Does X have a contract with A or is A the parent company?

If A doesn't have a contract why does X comply with A? If they are not making money it doesn't make sense unless A is a council or government body.
Question Author
No, X has a contract with A.
I think that A has bought the rights you could try contacting A and asking.
Question Author
Thanks alot for your help... I will let you know the outcome if it would be of any interest to you?
Yep I would like to know - Good Luck

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