AZ - EU contract published

[Davros]

Breaking news on BBC

@ItsA1WayStreet

I think where things are tricky is the use of the definition "best reasonable effort". Is this a legally defined, well used term in business contracts? If not, who is to say what is "reasonable"?

The EU-AZ contract has a specific definition of the term at clause 1.9. As far as AZ is concerned, best reasonable efforts means, " 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."

Can I ask anyone with legal knowledge about the warranty in 13.e?

There's some debate on Twitter about whether prior UK contracts make AZ in breach of this.

Excited for all of the contract experts to appear, CIPs must be rubbing their hands with glee at all of the new members.

Oh dear publish a contract and wait for 100 lawyers to come up with 100 different interpretations!

@ItsA1WayStreet

I think where things are tricky is the use of the definition "best reasonable effort". Is this a legally defined, well used term in business contracts? If not, who is to say what is "reasonable"?

It's a very, very commonly used concept.

In English law we tend to use best endeavours/all reasonable endeavours/reasonable endeavours. There's a lot of case law about what these mean, and also parties can be really specific in the contract as to what it means to do this (as they have done here in the definition of BRE). They essentially all mean "I will try to do this but cannot promise anything beyond that" (as opposed to just saying "I will do this"). "Best endeavours" means that you'll try really really hard to do it, "reasonable endeavours" means that you'll try but you won't put your back out doing it.

Unfortunately, the AZ contract is governed by Belgium law, and goodness knows what Belgium law says about how this should be interpreted!

@3asAbird AZ filed for approval on the 13th of this month on the EU

My understanding is that Belgian law is more about the intent than the precise wording.

One of the scientists on the TV this morning said that the UK manufacturing plants for the vaccines have had 3 months to iron out any issues of which they have had many. For example, they had issues with yield. What that apparently means is that you have to grow parts of the vaccine as a culture and early on there wasn't enough to make enough vaccines. We have had time to iron all this out over 3 months and now our factories and supply chain is running very efficiently.

The EU on the other hand has weighed itself down in bureaucracy and red tape as usual. They haven't even approved it yet.

The EU commission's arrogance is unbelievable. They won't acknowledge their own shitshow and now want to take vaccines off us, to cover up their incompetence. If I was AZ and any other manufacture of vaccines I think I would look elsewhere to make them and just ship them over to the EU. I wouldn't take the chance of them holding me to ransom.

I am as pro EU as they come, but they are making themselves look like bully boys over this. I think they feel that the UK's early order has made them look foolish or was done tactically and seem to be retaliating quite spitefully on this. I wonder if they were hoping that UK would make more of a hash of vaccination and they would be able to attribute it to Brexit. I don't know...

Unfortunately, the AZ contract is governed by Belgium law, and goodness knows what Belgium law says about how this should be interpreted!

Shout out to any Belgian lawyers who may be lurking (just on the off chance)

SecondGentleman

That's referring to competing agreements entered into by the Commission, not by AZ.

No, it isn't, it's about capacity limitations and the effect they have on AZ's ability to fulfil contracts and taken in combination with 6.1 it says that the EU should use BRE to assist AZ, including in finishing capacity, and that AZ are not liable if they don't. As far as I can see, the EU have not done this, they are aware of capacity limitations but haven't made efforts to ameliorate them.

@cathyandclare

Can I ask anyone with legal knowledge about the warranty in 13.e?

There's some debate on Twitter about whether prior UK contracts make AZ in breach of this.

That's what we would call a bog standard clause that gets put in contracts more out of habit that anything else. If the EU manage to hang a claim on that it's out of luck that it was in the contract, not because the EU specifically thought about this scenario coming up.

My view is that the EU can't really do much with this, and certainly not without seeing the AZ-UK contract to see if the terms actually conflict with this. AZ having another supply contract for the same kind of goods with another customer might prevent it from actually meeting the EU's delivery schedule, but it doesn't necessarily prevent it from using its best reasonable efforts to meet that schedule (which is all that AZ's contractual commitment is).

I don't think the EU are trying to win this on a contractual interpretation basis. I think they are throwing out any possible justification that they can think of for introducing laws preventing export from Belgium, so that other manufacturers in the EU don't get spooked that the same thing might happen to them ("That was a one-off! We only did it because they were definitely in breach!"). And also hoping that if they make enough fuss they'll get some vaccines from somewhere.

@cathyandclare NAL but I would take it that the EU factory capacity has not been earmarked to provide doses for anyone else. The UK doses come from UK factories so a separate matter.

@cathyandclare

Can I ask anyone with legal knowledge about the warranty in 13.e?

There's some debate on Twitter about whether prior UK contracts make AZ in breach of this.

13.1e does not mean prior UK contracts put AZ in breach. They are only in breach if their contract with the UK (or any other pre-existing contract) would interfere with their ability to deliver to the EU. Given that the contract requires AZ to deliver solely from EU plants initially, the UK contract would only interfere if the UK was taking deliveries from AZ's EU plants.

As per my earlier post, if AZ has diverted output from EU plants to satisfy UK orders they may be in breach of contract. However, AZ maintain that the problem is that the EU plants are not yet getting sufficient yield. If that is the case, AZ is in the clear.

Can't believe I'm actually glad we are out of the EU... I'm in shock.

Many thanks for the multiple and comprehensive replies. MN at its best!

The warranty in 13(e): if the UK AstraZeneca contract was part of the financial information submitted to the EU in advance of signing, it may count as a 'disclosure' against the warranty if there is a disclosure proviso. So the EU wouldn't be able to point to it.

But my knowledge is decades out of date and was confined to a small area.

@SaskiaRembrandt

SecondGentleman

That's referring to competing agreements entered into by the Commission, not by AZ.

No, it isn't, it's about capacity limitations and the effect they have on AZ's ability to fulfil contracts and taken in combination with 6.1 it says that the EU should use BRE to assist AZ, including in finishing capacity, and that AZ are not liable if they don't. As far as I can see, the EU have not done this, they are aware of capacity limitations but haven't made efforts to ameliorate them.

SecondGentleman is right. The text apparently quoted from 6.2 in the earlier post is incorrect. Clause 6.2 actually says, "In the event AstraZeneca's ability to fulfill its obligations under this Agreement is impeded by a competing agreement entered into by or on behalf of the Commission, AstraZeneca shall promptly inform the Commission..."

@HeyHeyImABeLeaver

Unfortunately, the AZ contract is governed by Belgium law, and goodness knows what Belgium law says about how this should be interpreted!

Shout out to any Belgian lawyers who may be lurking (just on the off chance)

😀I would imagine the EU must know many Belgian lawyers who are currently studying the contract in great detail not sure how many in UK or on mumsnet. I keep recalling spirit of the law and letter of the law. Are there any legal precedents within EU already of best endeavours contracts?

I thought the EMA had applied sooner than that.
Its 29th today at 12 mins past 2 and EMA still not authorised the Oxford Az vaccine or made it clear groups authorised to vaccinate ie over 65?

Another thing that confuses me is Hungary has within its own county authorised and approved Russia and Chinese vaccines and placed orders why haven't other EU nation like Republic of Ireland say can't wait any longer let's approve Oxford AZ now and make orders.

@SaskiaRembrandt

SecondGentleman

That's referring to competing agreements entered into by the Commission, not by AZ.

No, it isn't, it's about capacity limitations and the effect they have on AZ's ability to fulfil contracts and taken in combination with 6.1 it says that the EU should use BRE to assist AZ, including in finishing capacity, and that AZ are not liable if they don't. As far as I can see, the EU have not done this, they are aware of capacity limitations but haven't made efforts to ameliorate them.

It really is. The reference to "such competing agreements" is to the competing agreements entered into by the Commission mentioned in the first sentence of 6.2.

We all encounter "Best efforts" every time we on-line shop. It is a very standard term not just in the UK. Who hasn't had to debate accepting supermarket substitutions?

(Non-fulfilment penalty clauses are more the exception with best efforts being the accepted default. Once there is an explicit best efforts clause you really wouldn't expect to be able to bank on delivery).

Another thing that confuses me is Hungary has within its own county authorised and approved Russia and Chinese vaccines and placed orders why haven't other EU nation like Republic of Ireland say can't wait any longer let's approve Oxford AZ now and make orders

I could be wrong but I thought member states could only procure side orders with firms who the EU Commission hasn’t got a contract with. So EU does not have agreement with the Sputnik vax so Hungary is free to organise their own. But as EU has agreement with AZ member states cannot organise their own orders. Someone else might be able to confirm if this is right or not.

@ChocolateSantaisthebestkind

I am as pro EU as they come, but they are making themselves look like bully boys over this. I think they feel that the UK's early order has made them look foolish or was done tactically and seem to be retaliating quite spitefully on this. I wonder if they were hoping that UK would make more of a hash of vaccination and they would be able to attribute it to Brexit. I don't know...

I feel the same. I voted remain but honestly looking at this is shocking. It is spiteful retaliation.

@tara671

It is so arrogant of the EU to act like it’s contract has anything to do with the UK’s. They seem to think the U.K. remains an EU state that can be bullied into submission.

It’s laughable that this comes so soon after the EU implying that it didn’t trust the U.K. to honour the Deal with the EU. Pot, kettle.

They are so, uncannily, like divorcing a difficult husband. Threats, courts, unreasonable and contradictory positions and endless pointless wrangling over utter, indefensible nonsense.

You can check out, but you can never leave. 😉

@Dinnafashyersel

We all encounter "Best efforts" every time we on-line shop. It is a very standard term not just in the UK. Who hasn't had to debate accepting supermarket substitutions?

(Non-fulfilment penalty clauses are more the exception with best efforts being the accepted default. Once there is an explicit best efforts clause you really wouldn't expect to be able to bank on delivery).

Exactly. I bought a computer online a few years ago and was eagerly anticipating its delivery. Then I got an email from the suppliers saying that unfortunately, that model was out of stock and was displayed on their website in error. I was disappointed but legally I had no leg to stand on. All advance purchase agreements, big or small, contain a clause of this nature.