A New Article on “Best Efforts”

Reader Larry Bell pointed out to me that the April 2008 issue of Corporate Counsel’s Quarterly contains an article by the publisher’s editorial staff entitled “Best Efforts Clauses.” I’m afraid that I can’t provide a link, as I have only a hard copy.

When it comes to guidance on drafting usages, I’m not particularly a fan of big-is-better, and this article is a case in point. It weighs in at 37 pages, and most of it consists of an autopsy of relevant caselaw.

Ultimately, what matters is what the authors make of the caselaw. In that respect, this article is profoundly unimpressive. Here’s one sentence from the conclusion:

We believe we could all agree that, intuitively, “best” is somehow “better” than the other two [i.e., good faith and reasonable efforts], but we are unable to find any authority that would aid in negotiation or litigation should the meaning of those obligations be called into question.

You believe that “we could all agree” that a best efforts obligation is more exacting than a reasonable efforts obligation? Speak for yourself! I, for one, disagree. And you were unable to find any support? What a surprise! Well, don’t let that bother you …

About the author

Ken Adams is the leading authority on how to say clearly whatever you want to say in a contract. He’s author of A Manual of Style for Contract Drafting, and he offers online and in-person training around the world. He’s also chief content officer of LegalSifter, Inc., a company that combines artificial intelligence and expertise to assist with review of contracts.

5 thoughts on “A New Article on “Best Efforts””

  1. In British Columbia we actually have fairly clear caselaw on the difference between “Best Efforts” and “Reasonable Commercial Efforts”. So while everyone else gets to refer to Ken to break a drafting impasse, I have to fall back on references to cases like Nelson v. 535945 British Columbia Ltd., 2007 BCSC 1544 (http://www.canlii.org/en/bc/bcsc/doc/2007/2007bcsc1544/2007bcsc1544.html), which points out the relevant authorities for those that find cases from British Columbia or Ontario persuasive.

  2. Troy: The U.S. caselaw is in fact clear as can be: in a nutshell, all efforts standards mean reasonable efforts. It’s practitioners who are confused … Ken

  3. I have recently reverted to defining “Commercially Reasonable Efforts” due to the extreme confusion about these various standards. Not surprisingly, my definition varies depending on the circumstances.

    One interesting debate is whether the test for “Commercially Reasonable Efforts” can be tied to the need for (or amount of) expenditures required to accomplish the stated objective.

  4. Thanks for the Canadian case reference Troy. The case you cited above in fact says the exact opposite of what Ken is saying. In B.C. and Ontario at least, “best efforts” and “reasonable commercial efforts” are clearly different standards. It underscores for me the danger of just assuming the law is the same on both sides of the border.

  5. Nicola: Different jurisdictions do have different takes on this, and I’ve blogged about what English and Australian courts have had to say. At the risk of sounding like a broken record, I’ll repeat my position: courts in the Commonwealth countries are welcome to draw whatever distinction they want between best efforts and reasonable efforts, but the idea of such a distinction is at odds with standard English and is, in the long run, essentially unworkable. That’s why confusion is inescapable, and that’s why I say use only reasonable efforts and, in sensitive contexts, use it as a defined term. Sorry to harp on so. Ken


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