Tie-In Arrangements

Question 1

What is a tie-in arrangement in antitrust law?

Answer 1

A tie-in arrangement is when the provision of one service is made dependent on obtaining another service.

Question 2

Can an agent offer a commission rate based on using a specific title company?

Answer 2

No, an agent cannot say, ‘I can only offer this commission rate if you use the title company/inspector/mortgage broker I recommend.’

This is an example of a tie-in arrangement that violates antitrust law.

Question 3

What is a negative tie-in arrangement?

Answer 3

A negative tie-in arrangement occurs when a provider states, ‘I can only work with you if you agree not to use XYZ Title Company.’

This is also a violation of antitrust law.

Question 4

Are both types of tie-in arrangements violations of antitrust law?

Answer 4

Yes, both positive and negative tie-in arrangements are violations of antitrust law.

Question 5

What must a prospective buyer sign for an agent to negotiate on her behalf?

Answer 5

An agency agreement to be a client

This establishes the formal relationship between the agent and the buyer.

Question 6

Is the scenario where an agent tells a buyer that his commission rate is 2%, but the buyer won’t have to pay this out of pocket a tie-in arrangement?

Answer 6

Not a tie-in arrangement

This situation indicates that the commission is covered by the seller’s agent.