Best or reasonable efforts – or best reasonable efforts?
In our Contracts for Engineers course, we talk about the difference between best and reasonable efforts. The context might be a requirement on a construction project to use local labour for example. Where reasonable efforts, in simple terms, is making an effort to employ suitably qualified labour or subcontractors without sacrificing quality or safety; best efforts would require doing everything possible, including throwing money at the requirement, for example by setting up a training program for welders at your cost. What we have seen on occasion, usually in a badly worded contract, is the use of the term best reasonable efforts or endeavours – and this has no meaning either in English law or in practice. It should be best or reasonable but not both.
Therefore it was with interest that I read the recently published contract between AstraZeneca and the EU over the production, purchase and supply of COVID-19 Vaccine – not for fun, I hasten to add! The EU decided to publish the contract in connection with its dispute over the commitments made by AstraZeneca, which the latter are having trouble fulfilling. I have no interest in the politics behind this, but when I read that AstraZeneca “shall use its Best Reasonable Efforts”’ to manufacture and deliver the vaccine doses by a certain date and quantity, I wanted to understand more. What does Best Reasonable Efforts mean in this situation?
Best Reasonable Efforts Defined
Unlike many contracts, the term Best Reasonable Efforts is at least defined with regard to AstraZeneca and repeated here for your perusal…
“the activities and degree of effort that a company of similar size with a similarly-sized infrastructure and similar resources as AstraZeneca would undertake or use in the development and manufacture of a Vaccine at the relevant stage of development or commercialization having regard to the urgent need for a Vaccine to end a global pandemic which is resulting in serious public health issues, restrictions on personal freedoms and economic impact, across the world but taking into account efficacy and safety.”
What would you do?
Where AstraZeneca has contractual obligations to manufacture, deliver a certain number of doses of their Vaccine by certain dates, and shall manufacture them at sites within the EU (including the UK for these purposes), what do you think this obligation to use Best Reasonable Efforts means? If that means setting up additional, unplanned facilities inside or outside the EU, does this obligation require you to do this at your own cost?
Where there are presumably parallel agreements with other nations (e.g. between AstraZeneca and the UK) which contain the same clauses, is there an argument over who gets priority if the ability to manufacture or deliver is constrained? Should any contractor be burdened with the “urgent need…to end a global pandemic” and how much money should they throw at it with their best reasonable efforts? Interested to hear your views…
Karen Cherrill – Partner Kingsfield Academy