It is customary in business contracts to employ the word "best endeavors" to imply that the named party is obligated to utilize all of their resources to meet their contractual obligations. A party is held to a higher performance standard when bound by a best efforts policy than when bound by a reasonable attempts policy. Regarding business contracts in the United States, "best efforts" is often used as a synonym.

Understanding Best Endeavors

Best efforts obligations are defined in law as the responsibility of a party to make every reasonable effort to attain the stated goal. The responsibility to use reasonable efforts, on the other hand, may only require one path of action before the party considers the assignment unfulfillable.

Because the boundary between "best efforts" and "reasonable efforts" is frequently fuzzy, the parties concerned may go to court over the issue. A variety of criteria are considered by the court while making a judgment in these circumstances. The level of effort, commercial feasibility, and competing duties are all variables to consider.

Best Efforts vs. Reasonable Efforts: Who Wins?

However, best efforts and the responsibility to use 'all reasonable attempts' are hotly contested discussion topics. Repeating a course of action under "all reasonable endeavors" is one way to interpret the requirement to use "all reasonable endeavors."

For instance, the contract can provide that a third party must be contacted by a specific date to ratify a transaction. It might be considered a "reasonable effort" to reach them if a message was left after a failed phone attempt. Best efforts could include making many phone calls and leaving multiple messages.

"All reasonable endeavors" might be shown if the phone calls were followed by letters and couriers to deliver the message to the party personally. Enforcement in court relies heavily on the interpretation and circumstances of the case, which can be a contested area of contract law.

"Reasonable Endeavours"

As long as the other party pledges to use or do "reasonable endeavors" to accomplish a certain result, the other party is not compelled to take activities that could harm them unless they have expressly committed them. A reasonable endeavor requirement, instead of forcing a party to take every available action, requires the party to take activities that a reasonable person would do in the same situation. As long as the other side gives it its "honest attempt," there's no reason to expect them to do anything that may harm their chances of success.

''Best Endeavours''

"Best efforts" obligations are more burdensome than "reasonable endeavors" obligations. However, it has been observed that this responsibility is highly demanding and may force the party contracting to make the best endeavors to fulfill its duties, even if this means taking efforts that suffer considerable financial losses on their behalf. However, it's critical to remember that there's a big difference between losing money and disregarding your financial well-being.

Limits on Best Efforts

Rights of the party who is responsible for making "best efforts" are available to them. To meet best efforts duties, for example, the party subject to this obligation would not be required to put themselves in a disadvantageous position.

An engineering company may be recruited to create a new office building, and the contract may include wording requiring "best efforts" to achieve a deadline, for example. The engineering firm may discover that one approach will cost the company money to achieve that deadline.

Because of the time, money, and licenses required by the firm but not reimbursed by the customer, this is possible. To be considered to have done "best efforts" to satisfy its responsibilities, the company would have to exhaust all available choices without incurring additional expenditures.

Commercial Objectives

Commercial factors play a significant role when determining whether or not a party has met its obligations. Commercial reasons and efforts may not be enough to meet a best-efforts commitment, although they may be sufficient for a reasonable-efforts obligation. If an agreement states that the parties must take particular actions as part of a reasonable endeavor commitment, those steps must be done independently of any commercial incentives.

Drafting Considerations

While it is likely that both parties will be encouraged by their attorneys not to accept the best efforts requirement but rather to attempt and impose a best-efforts obligation wherever feasible, determining what degree of responsibility to place on a contracting party is important. Whether or not the obliged party can be expected to comply with the terms of the agreement is the most important factor in the outcome.

Common Concerns

It might be difficult to distinguish between reasonable and best efforts in practice. Differences in interpretation can lead to disputes and litigation, but the parties' original intentions and common sense will likely prevail. As a result, it is essential to seek clear and reliable legal counsel in this area.