What are Reciprocal Dealing Contracts?

This is an agreement where a buyer offers to buy a sellers goods under the condition that the seller buys other goods from the original buyer. These agreements are only illegal under the Clayton Act if there is a distinct anticompetitive objective with a substantial effect on the product market. Any pro-competitive justification may serve as a defense to a challenge to these practices.

Example: ABC Corp agrees to purchase machinery that distributes chemicals from a 123 Corp if the 123 agrees to purchase all of the chemicals from the ABC. This conduct will be illegal if a challenger can demonstrate that ABC and 123 have an anticompetitive objective that substantially affects the market for farmers purchasing these machines and chemicals.