Reasonableness: Overview, definition and example
What is reasonableness?
Reasonableness refers to actions, decisions, or terms that are fair, balanced, and based on common sense. In legal terms, it means doing what a reasonable person would do under the circumstances. It often serves as a standard for determining if something is acceptable, fair, or just. In contracts, reasonableness ensures that parties act in ways that are sensible and not excessively demanding or harmful.
Why is reasonableness important?
Reasonableness is important because it provides a guideline for fair dealing and helps avoid disputes. When parties act reasonably, they maintain trust and avoid actions that could be seen as unfair, unjust, or extreme. In many cases, laws and contracts include "reasonableness" as a standard to ensure that both parties are treated fairly, especially in negotiations, performance expectations, or decision-making.
Understanding reasonableness through an example
Imagine a company that requires a supplier to deliver goods within 30 days of placing an order. This timeframe is reasonable based on the nature of the goods and the industry standard. If the supplier requests an extension of 90 days without any valid reason, the manufacturer could argue that this demand is unreasonable, as it exceeds what would be considered fair in the context of a typical business relationship.
In another case, an employer asking employees to work additional hours during a peak season might be reasonable if compensated fairly and explained in advance. However, expecting employees to work excessive overtime without compensation could be deemed unreasonable, as it would go beyond what a reasonable employer would expect from their staff.
Example of a reasonableness clause
Here’s how a reasonableness clause might look in a contract:
“Any actions or decisions made by either party under this Agreement must be reasonable, fair, and consistent with the standards of good practice in the industry.”
Conclusion
Reasonableness ensures fairness and balance in business contracts and relationships. It helps set expectations for how parties should behave and make decisions. By adhering to the principle of reasonableness, businesses can avoid conflicts, build stronger relationships, and ensure that their contracts remain fair and enforceable.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.