Legal Definitions - no-shop provision

A no-shop provision is a clause in a contract that prevents one or more parties from seeking or entering into a better agreement with another party.

For example, if a company is in negotiations to merge with another company, a no-shop provision may be included in the contract to prevent the first company from seeking a better deal with a different company.

Another example is in the case of a real estatetransaction. A seller may include a no-shop provision in the contract with a potential buyer to prevent the buyer from seeking a better deal with another seller while the transaction is still in progress.

These examples illustrate how a no-shop provision can protect parties from being taken advantage of during negotiations or transactions.