Lakeview Industries contracts with Marine Motor Distributors to carry its newly patented outboard engine. In exchange for exclusive dealership rights, Marine Motor has agreed to carry the full line of nautical clothing accessories offered by Lakeview. What term best describes this type of arrangement?
A) distributor contract
B) tying agreement
C) channel selection
D) exclusive dealing agreement

Question

Quizplus · Accepted Answer

A tying agreement occurs when a seller with a strong product (the tying product, in this case, the patented outboard engine) requires buyers to purchase a second product (the tied product, here, the nautical clothing accessories) as a condition of sale. This arrangement is exactly what is described between Lakeview Industries and Marine Motor Distributors.

Lakeview Industries Contracts with Marine Motor Distributors to Carry Its