In a contract, the term “reasonable person” is often used to describe a standard of behavior or performance that is expected of the parties involved. But what does it really mean?
Essentially, a reasonable person is someone who acts in a way that is considered typical, rational, and fair in a given situation. It is a subjective standard, meaning that what is considered reasonable can vary depending on the circumstances.
When a contract includes language requiring parties to act as a reasonable person would, it is essentially asking them to behave in a way that is expected of someone in their position, with their knowledge and experience. This could include things like meeting deadlines, communicating clearly and promptly, and not engaging in behaviors that could be considered unethical or dishonest.
For example, if a contract requires a contractor to complete a construction project by a certain date, the contractor is expected to act as a reasonable person would in ensuring that the project is completed on time. This might include taking into account things like weather conditions, available resources, and unforeseen delays, and making adjustments as necessary to ensure the project is completed as close to the deadline as possible.
Similarly, if a contract requires a supplier to deliver a certain quantity of goods, the supplier is expected to act as a reasonable person would in ensuring that the goods are delivered on time and in the agreed-upon condition. This might include taking steps to ensure that the goods are properly packaged and shipped, and that they are delivered by a reliable carrier.
In some cases, a contract might include language requiring parties to act as a reasonable person would “in the opinion of the other party.” This means that the other party is entitled to make a judgment call as to whether the behavior in question is reasonable or not. For example, if a landlord is required to maintain a rental property in good condition, the tenant might be entitled to judge whether the landlord`s efforts to maintain the property are reasonable or not.
In summary, the term “reasonable person” in a contract is a subjective standard that asks parties to behave in a way that is considered typical, rational, and fair in a given situation. While the precise definition of what is considered “reasonable” can vary depending on the circumstances, it is generally understood to include behaviors like meeting deadlines, communicating clearly and promptly, and acting ethically and honestly.