Someone steered me to this post on the California Corporate & Securities Law blog. It’s about a recent California case on the meaning of best efforts. The court held—shock horror probe!—that best efforts is subject to a reasonableness standard, leading my informant to suggest that the court agrees with my views on this subject.
I’m delighted to receive tips of this sort—keep them coming! But this case prompted two thoughts:
First, this case is nothing new, as U.S. courts have essentially said, with one voice, that all efforts provisions mean reasonable efforts.
Second, and more to the point, what a given court has to say on the subject is largely irrelevant for my purposes. Indeed, it’s not a matter of whether a court agrees with me or not.
Instead, a drafter’s function is very different from that of a court. Courts are in the mucky business of determining the meaning of unclear contract language. By contrast, a drafter aims to articulate clearly the meaning of the parties, without creating confusion that a court has to resolve.
So the analysis that a court engages in when considering what best efforts means is of little interest to me. What matters most is that using the phrase best efforts is to invite confusion—for reasons I’ve explained elsewhere, any attempt to distinguish best efforts (and other efforts variants) from reasonable efforts is doomed.
When asked to determine what best efforts means, a court will either be sensible about it or will screw it up. The California case that prompted this post is an example of sensible analysis; I’ve written about English cases (here and here) and a Canadian case (here) that offer scarily flawed analysis.
But in considering such cases, I’m a spectator, in the cheap seats eating popcorn. That’s because the only efforts phrase I use is reasonable efforts, which doesn’t create confusion.