Also known as: just & reasonable · fair and reasonable
Written by attorneys · grounded in primary & secondary sources — see below
A standard requiring that terms of a transaction, an allocation of limited resources, a basis for imposing liability, or a regulatory imposition be equitable and appropriate under the circumstances.
Barry offered Philip a thirty percent ownership interest in Sigma Outlet because Barry could not pay cash fees for lease renegotiations. Philip sent only a brief email summarizing the stake and later obtained a short consent form. Barry later disputed the arrangement after management conflicts arose. The bar committee examined whether the ownership terms satisfied the fairness requirement before the lawyer acquired the interest.
A parts supplier faced a sudden shortage that limited output to sixty percent of normal levels. The supplier divided remaining units among existing buyers and also supplied two longstanding customers who had no current contracts. One buyer challenged the division as favoring non-contract parties. The court assessed whether the chosen proportions met the fairness requirement for partial performance.
Select any source to read its text and confirm it supports the definition.
Poultry processors adopted a code that fixed wages and hours across hundreds of small slaughterhouses. The government defended the code as necessary to prevent destructive competition. Processors argued the wage levels exceeded what the market would support. The Court evaluated whether the wage and hour terms constituted a fair and reasonable commercial standard.
Congress authorized the President to adjust tariff rates on imports to equalize production costs between domestic and foreign manufacturers. An importer challenged a specific rate increase on woolens. The Court considered whether the adjusted rate provided a fair and reasonable level of protection consistent with the statutory goal.
Women injured by DES could not identify which manufacturer supplied the drug taken by their mothers. The court allowed recovery against producers in proportion to their national market shares. Manufacturers objected that the formula imposed liability without proof of causation. The court examined whether apportionment by market share supplied a fair and reasonable basis for allocating responsibility.
OSHA proposed reducing the permissible exposure limit for benzene from ten parts per million to one part per million. Industry groups presented evidence that the lower limit would impose costs far exceeding any demonstrated health benefit. The agency defended the limit as necessary to eliminate significant risk. The Court assessed whether the chosen exposure level reflected a fair and reasonable relationship between costs and benefits.
The lawyer must demonstrate that the transaction terms are equitable given the client's circumstances and that those terms were transmitted in writing in language the client could reasonably understand. The disclosure must allow the client to evaluate the economic consequences before consenting.
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No. Even when the client is a sophisticated business entity with in-house counsel, the rule still requires written disclosure of terms in an understandable manner, written advice about independent counsel, and a signed consent. Informal review by the client's own lawyers does not substitute for these formal steps.
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The method must treat contract customers proportionally and may include regular non-contract customers only if the inclusion does not unduly disadvantage existing contract buyers. The seller must notify buyers of the allocation and the estimated quota available to each.
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Buried references and undefined technical terms can prevent a client from understanding the economic implications of the transaction. The rule demands presentation that permits reasonable comprehension given the client's education and the context of the deal.
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…regulating the activities of the common carriers subject to the Act, in order to assure the performance of their services upon just and reasonable terms, with adequate facilities and without unjust discrimination. Congress from time to time has elaborated its requirements, as needs have been disclosed. To facilitate the application of…