Posted in Marketing and Strategy Terms, Total Reads: 400
Definition: Tying Arrangement
A tying agreement is an agreement in which a seller decides to go ahead with the sales of one product, called the "tying" product only when the buyer agrees to purchase a separate product called the "tied" product from the seller. It can also be looked at as an agreement where the seller sells the tying product only when the buyer agrees not to purchase the tied product from any other seller.
It could be a violation if there is a forced purchase of one product in order to obtain a separate desired product or service. Because of all these clauses, it can be seen that it may appear to be illegal at times. Usually the tied product is one which is not much desired or of poor quality which sellers find difficult to sell. Thus, by clubbing it with the tying product, the sale of the tied product can also be ensured.
For example- sale of not so popular films which have lack of demand with popular video cassettes.