Trail Bikes, Inc., makes and distributes Trail-brand bicycles and accessories to authorized dealers. To prevent price-cutting by dealers in direct competition, Trail Bikes imposes limits on where each dealer can sell Trail products. This is

Question

Trail Bikes, Inc., makes and distributes Trail-brand bicycles and accessories to authorized dealers. To prevent price-cutting by dealers in direct competition, Trail Bikes imposes limits on where each dealer can sell Trail products. This is​

Quizplus · Accepted Answer

The imposition of limits on where each dealer can sell Trail products is a territorial restriction. This is a common practice in distribution agreements and is intended to prevent dealers from engaging in direct competition and engaging in price-cutting tactics.