I plucked from the SEC’s EDGAR system, largely at random, an asset purchase agreement filed earlier this month. It was drafted by a big law firm, and it contained, along with the usual dysfunction, some glitches that caught my eye.
In particular, here are the different efforts (and endeavours) provisions it uses:
- use its best efforts
- use its reasonable efforts
- use its commercially reasonable efforts
- use its Commercially Reasonable Efforts [defined term]
- use reasonable endeavours
- use reasonably [sic] endeavours
- use its best endeavours
I’m used to this sort of efforts mish-mash. It’s invariably the result of promiscuous copy-and-pasting, without any subsequent cleanup. But this collection is particularly chaotic.
It brings to mind two questions. First, was this contract based on a template? If it was, what does that tell us about the template? If it wasn’t, what does that tell us about the firm’s processes?
And second, I see this routinely in company commercial contracts. Should we expect a big law firm to do better than companies in drafting contracts?
(By the way, I recommend you use only reasonable efforts, and only in those contexts where it makes more sense to be vague than to be precise. If you want more on efforts provisions, go here for my 2019 law review article on the subject. In a 2020 opinion (see this blog post), the Delaware Court of Chancery called my article “The most thorough analytical treatment of efforts clauses” and called me “The leading commentator on efforts clauses.”)