Lightning ATVs, Inc., makes Lightning-brand all-terrain vehicles and accessories, which are distributed to authorized dealers, including Macho Motors, Inc. Macho operates dealerships in several locations. Lightning imposes territorial restrictions on Macho to insulate other dealers from direct competition. This is

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Lightning's territorial restrictions on Macho Motors are vertical restraints, as they involve a manufacturer placing restrictions on the behavior of a dealer/distributor. Horizontal market division involves competitors agreeing to not compete with each other in certain markets, exclusive-dealing contracts involve a manufacturer requiring a distributor to only sell their products, and an interlocking directorate involves individuals serving on the boards of multiple companies.