Another term used in English law as an alternative to „best efforts” is „reasonable efforts”, which implies less involvement of the party in terms of time and money to achieve the objective. The Consultant shall do his best for the Company and devote the time and attention necessary to the reasonable performance of his obligations under this Agreement, but the Consultant shall not be obliged to devote all his time to the Company. The Consultant is available to perform its obligations under this Agreement at times reasonably necessary and appropriate for the Company – (International Contract: Law and Practice – Larry A. DiMatteo – §8.06 – p. 284). „Economically reasonable efforts” can be related to the efforts required to obtain a certain value for a good, with the market acting as an objective measure of what a „fair” value might be. If so, the standard is less onerous than „best efforts” because stones can be left untested (so to speak) as long as a market can provide a fair valuation. The standard may be less onerous than „reasonable efforts” because the true measure of effort required is that required to satisfy a market on the basis of an independent commercial assessment, rather than „all reasonable and measured steps” required to achieve an objective. The standard of „reasonable effort” is interpreted in relation to the context and purpose of the contract, which requires the performance of the obligation, but without the reservation „no stone on the other”. In Dobb v. Insurance Corp.
of British Columbia,7 the Court held that this included all possible steps that would be taken by a reasonable person who wishes to achieve a similar result in such circumstances. In other words, the party committed to making „every effort” should take appropriate measures, even if they are to some extent detrimental to its own interests. Overall, a party is required to do its best to achieve the desired results in the given circumstances. This means that these measures are all measures that a prudent, determined and reasonable person acting in his or her own interest and seeking to achieve that result would take. Model clause. When Willem Wiggers worked at Allen & Overy, he reformulated this principle of unidroit as a contractual clause. The clause was then used in the company`s joint venture agreement template. Many years after leaving the firm, in a completely different M&A context, he received a bonus for a share purchase agreement prepared by another renowned law firm. It contained the model article exactly as it was originally drafted. Over the years, experience shows that best-effort prevention must have teeth in order to determine effectiveness beyond an otherwise relatively weak concept. What needed to be improved was (a clarification) of the burden of proof as well as the clarification of the scope of a party`s obligation to declare and justify.
To clarify what the best efforts entail, the author should formulate it as an obligation to achieve a result or link it to a contractual right to deal with breaches: . First and foremost, as the employer`s counsel argued, reasonable efforts do not mean „all” efforts or „all efforts”. It is a question of making efforts which, on the whole, are reasonable and which, since this is a broad clause of general application, depend on the particular circumstances of the case. This intention of the parties is often expressed as „best efforts”. When using this term, it is important to understand its legal meaning within the framework of English law and to understand what it implies in practice. The term „economically reasonable effort” is often used in the drafting of contracts, with several dozen contract decisions containing this term having been reviewed since 1999. However, this whole sentence has been little taken into account by the judiciary. Given the jurisprudence on „best efforts” and „reasonable efforts”, the issue to be considered is whether „commercially reasonable” implies a lower or higher standard of „reasonable effort”.
In other words, is „commercially reasonable efforts” limited only to measures that could be commercially acceptable, creating a less onerous standard, or does the term „commercial” raise the bar so that the standard is closer to „best efforts”, but only in a commercial context? That is an open question. With respect to X-licensed patents that are jointly owned by others, Licensee acknowledges that there are countries that require the express consent of co-owners to license such joint patents. X will use all reasonable efforts to obtain such consent. However, if, despite such reasonable efforts, X is unable to obtain such consent, X`s failure to make its alleged license grant complete and effective shall not be deemed a breach of this Agreement. Enough effort? Best Efforts and its variants are vague terms. Vagueness implies standards of „subsidiarity” and „proportionality” in what can or should be expected of the party concerned. Occasionally, a party may be required to make efforts that are disproportionate to the benefits of the contract. Vagueness also implies that the determination of whether a party has made sufficient efforts depends on all the facts and circumstances.
The minimum standard would likely be that the party made good faith efforts to achieve the expected result. The Unidroit Principles[2] give something to cling to: without further judicial review, „economically reasonable effort” is ambiguous and should be used with caution or explicitly defined in the contract to which it applies. From the Russian point of view, there is no difference between „best efforts” and „best efforts” – this concept is commonly referred to as „вÑÐμ вÐ3/4з Target language. Ð1/4Ð3/4жÐ1/2ÑÐμ ÑÑÐ ̧ДР̧Ñ” („all possible efforts”). Sellers undertake to use reasonable efforts, subject to the authorization of applicable law, to induce Group companies to carry on business in all material matters in the ordinary course of business and in accordance with prior practice in the period between the signing of this Agreement and the closing date (…). Sellers will use reasonable efforts to take all steps and do everything necessary under applicable law to complete and make effective the transactions provided for in this Agreement (…) In the event that the lender decides, in its sole discretion, to acquire or refinance an eligible first priority bridge debt, the borrower will use its best efforts to facilitate such acquisition or refinancing so that the lender subsequently holds a senior security right in the collateral. In determining the extent to which an obligation of a party includes the obligation to do its best in the exercise of an activity or the obligation to achieve a particular result, it is necessary to take into account, inter alia, the following: as a result, legal uncertainty arises because „best efforts” and „best efforts” are concepts of different legal systems. „Best effort” will most likely be interpreted by the courts as an analogy to the English legal term „best efforts”. It is therefore recommended to use the term „best efforts” when drafting an English legal contract, for which there is a relevant legal basis.