Contract Law – Key Terms and Understanding (Feb. 1, 2021)
The following Legal English exercise focuses on the language of contract law and is based on the APA between EU Commission and AstraZeneca.
In order to complete this exercise, you will need to refer to this abbreviated version of the Agreement:
1) What is the legal synonym for “reached” or “signed” in the first clause on pg. 1?
2) What does the term “herein” as within the meaning of the 4th clause on pg. 1 mean?
3) What is the name of the section of the contract that starts on pg. 1 and continues on pg. 2?
4) What is the synonym for “obtain” or “purchase” used in the first Whereas clause?
5) According to the last Whereas clause on pg. 1, are all Member States obligated to be part of this APA?
6) According to the 5th Whereas clause on page 2, has AstraZeneca undertaken to produce 300 million doses of Vaccine?
7) What does the term “good and valuable consideration” mean in the clause that starts with “Now, Therefore”?
8) What is the importance of a consideration clause in the common law legal tradition?
9) What does “Best Reasonable Efforts” within the meaning of the 5th Whereas clause on pg. 2 signify? Where can we find this?
10) How can we interpret this clause: does it impose an obligation on the part of AstraZeneca to provide EU COMMISSION with certain minimum number of Vaccine doses?
11) According to s. 5.4 of the operative clauses, may AstraZeneca produce the vaccine in facilities outside of the EU? If so, under what conditions?
12) How does late or non-delivery affect payment obligations of the contract?
13) Who retains all Intellectual Property Rights to the Vaccine?
14) What happens after AstraZeneca decides to abandon its vaccine development?
15) What liability does AstraZeneca have in case of any harm or injury suffered by any third party (in the EU) as a result of being injected with its vaccine? Why?
16) What recourse does the Commission have against AstraZeneca in case it is shown that its vaccine is unsafe or ineffective? Why?
1) Enter into
2) In this agreement
3) The Recitals/Whereas
5) No, they have the right to opt out with proper (5 working days) written notice
6) No, AstraZeneca has committed itself to “use its Best Reasonable Efforts to build capacity to manufacture 300 million Doses of the Vaccine.”
7) It means valid exchange of something of value (in the context of this APA: vaccine on the part of AstraZeneca and an undisclosed sum of money on part of the EU COMMISSION)
8) In common law, it is one of the 3 necessary elements of a binding agreement (offer + acceptance + consideration)
9) It 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;” (point 1.9 of the Definition section)
10) No, it simply means that AstraZeneca would do all a company of its size and nature would do to produce the Vaccine (taking into account the importance of this Vaccine becoming available given the serious health and economic consequences of the pandemic)… it is a rather ambiguously worded clause
11) Yes; however, it must first notify EU COMMISSION of this intention and the EU COMMISSION may present the company with a list of CMO’s in EU capable of vaccine production and it shall use its best reasonable efforts to contract with them for such vaccine production.
12) As per s. 8.2, the payment may be suspended until delivery has been made as long as written notification of same has been issued.
13) As per s. 11.1, AstraZeneca retains all IP rights.
14) As per s. 11.2, EU COMMISSION shall have the right to obtain a license for the Vaccine IP Rights from AstraZeneca to enable the Commission to continue the development efforts for the Vaccine for the EU market.
15) None; as per clause 14, the Commission has agreed to fully indemnify the company in all such cases
16) None; as per clause 15.1 the Commission waives and releases any such claim against AstraZeneca (as long as the latter applied Good Manufacturing Practices in its development and production process).