“To the Best of Its Ability”

Here are three instances, from EDGAR, of use of the phrase to the best of its [or his, her, or their] ability:

The Company hereby engages the Consultant, and the Consultant hereby agrees to serve the Company to the best of his ability to provide financial advisory services to the Company during the Term (as defined below) as and when requested by the Company (the “Consulting Obligations”). The Consultant shall devote his attention, skill, energy and efforts to faithfully and effectively perform his duties hereunder.

The Indenture Trustee, as indenture trustee on behalf of the Noteholders, acknowledges such Grant, accepts the trusts under this Indenture in accordance with the provisions of this Indenture and agrees to perform its duties required in this Indenture to the best of its ability to the end that the interests of the Noteholders may be adequately and effectively protected.

The Company hereby engages the Consultant, and the Consultant hereby agrees to serve the Company to the best of his ability to provide financial advisory services to the Company during the Term (as defined below) as and when requested by the Company (the “Consulting Obligations”). The Consultant shall devote his attention, skill, energy and efforts to faithfully and effectively perform his duties hereunder.

And here’s the significance of to the best of its ability:

Obligations can be subject to discretion or not subject to discretion. (I just invented this terminology. If other terminology already exists, or if you can think of something better, let me know.)

An obligation to deliver 100 widgets that comply with the specifications stated in schedule A is an obligation that isn’t subject to discretion. By contrast, an obligation to deliver a screenplay adaptation of Moby-Dick is subject to discretion—the screenplay that’s delivered could be a masterpiece, a disaster, or something in between, and you can expect that a thousand writers would deliver a thousand different screenplays.

The phrase to the best of its ability represents an attempt to limit the risk associated with an obligation that’s subject to discretion. In that to the best of its ability conveys that the party under the obligation has to try really hard, it’s analogous to the efforts phrases used when successfully performing an obligation isn’t entirely under the control of the performing party.

Other language can be used to address this concern. For example, see the second sentence in the third example above. I invite you to offer additional examples.

But I’m not sure that telling a party that it has to try really hard in performing an obligation is the best way to address this concern. I suggest that it’s safer to do as follows:

  1. Be as specific as possible regarding the performance required.
  2. Give the other party the right to reject the product or to terminate, as appropriate.
  3. Structure the incentives in such a manner as to ensure that the performing party, if rational, would indeed try hard.

Incidentally, I’ve never seen this issue discussed anywhere. If you have, please let me know where.

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.