Best endeavors
| Best endeavors |
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Best endeavors (best efforts) are the obligation to use all efforts necessary to fulfill requirements of the contract. The phrase can be found in many contracts that define the quality of work that should be done. Best endeavors are more strict than reasonable endeavors. The party of the contract should take every reasonable effort to achieve the desired objective. In case of reasonable endeavors it takes usually on single course of action, when in best endeavors - all of them. It is very important to describe obligations in the contract precisely. Not precise description often ends in court. The next level of quality are all reasonable endeavors, which require not only taking all the actions, but also taking them multiple times if it is reasonable[1].
The concept of the best or reasonable endeavours in a contractual context is one that is burdened with uncertainty and lack of clarity jurisdictions. The concept of what constitutes the best endeavours will always carry a certain degree of subjectivity. So there remains the question of speculation about the degree which party is able to enforce the commitment it brings with it requirement of best endeavours[2].
Reasonable Endeavours
Obligations imposed by the term reasonable endeavours are "significantly smaller than imposed by "best efforts" and can be met by a "fair trial" of the obligated party. If the company can show any practical, financial or other business inconvenience in the proceedings obligation may justify their failure to take positive action, as well as probability or lack his luck. Any disadvantage of the debtor seems to justify omission to take positive action[3].
In order to ensure the enforceability of reasonable effort, the parties should take into account criteria in the contract clearly specifying what the parties must do to meet their reasonable endeavours responsibilities. Without these objective criteria, a clause may not be feasible because of the uncertainty it may have be too difficult to decide what is reasonable and unreasonable in the area in which the parties may have different views and no assessment criteria by a third party under the circumstances, what amounts to reasonable endeavours[4].
All Reasonable Endeavours
All reasonable efforts are accepted as imposing the obligation halfway between a reasonable and best endeavours. Although it does not impose as arduous an obligation as best endeavours, it does requires that the party in question spends more than just a minimal effort to fulfill its own responsibility, but the debtor is not obliged to take all of these steps to reach out desired result[5].
Examples of Best endeavors
- A company’s best endeavor clause in a contract to build a bridge states that the company must use all available resources and hire the most qualified personnel to ensure that the bridge is built in a safe and timely manner.
- A tenant’s best endeavor clause in a rental agreement states that they must use their best efforts to take care of the property and comply with the terms of the lease.
- A best endeavor clause in a business partnership agreement states that the parties must make all reasonable efforts to increase the value of the business, by implementing new strategies, investing in new technology, or hiring new personnel.
- A best endeavor clause in a job offer letter states that the employer must use their best efforts to provide a safe working environment and ensure that the employee is adequately trained and supported.
Advantages of Best endeavors
Best endeavors provide a higher level of assurance for the parties involved in a contract. This type of clause provides an obligation for parties to use their best efforts to complete their contractual obligations. Some advantages of this type of clause include:
- The ability to provide a higher level of assurance that the parties will do their best to fulfill the contract.
- It can help protect parties from potential disputes and conflicts arising from the performance of the contractual commitments.
- It can help to ensure that each party is held to a higher standard of performance, which can provide more certainty and assurance for both parties.
- It also allows for more flexibility in negotiations, as the parties can agree to modify the terms of the contract if they deem it necessary.
Limitations of Best endeavors
Best endeavors are obligations that require all efforts necessary to fulfill the requirements of a contract. However, there are several limitations to best endeavors that should be taken into consideration when deciding to include this phrase in a contract. These limitations include:
- Best endeavors do not guarantee a successful outcome. The parties can still be held liable for a breach of contract, even if they have used their best efforts to satisfy the contract's obligations.
- Best endeavors can be difficult to enforce. The contract language needs to be clear and concise in order to properly define the scope of the best endeavors obligation.
- Best endeavors do not require the parties to use resources beyond what is available to them. If the parties do not have the necessary resources to fulfill their best endeavors, they may be excused from liability.
- Best endeavors do not require the parties to act in an unreasonable or unethical manner. The parties must still abide by applicable laws and regulations and act in good faith.
In addition to best endeavors, other approaches related to the obligation to use all efforts necessary to fulfill the requirements of a contract include:
- Reasonable endeavors - This is a lesser standard than best endeavors, which requires the parties to take all reasonable steps to complete the contract, but not necessarily all possible steps.
- Good faith - This is an ethical obligation of fair dealing that requires the parties to act honestly and in the best interests of the other party when performing the contract.
- Due diligence - This is an obligation that requires the parties to use a certain level of care and attention when performing the contract.
In summary, best endeavors is an obligation that requires the parties to use all efforts necessary to fulfill the requirements of the contract, while other approaches such as reasonable endeavors, good faith, and due diligence also require the parties to use certain levels of care and attention when performing the contract.
Footnotes
References
- Cortney. G. S. (2000), Economic Loss: Commercial Contract Law Lives, Wm. Mitchell L. Rev., 27, 417.
- O`Riordan J. (2014), Best Endeavours - Dillon Eustace, Dillon Eustace, Dublin
- Smit J. (2015), Brief encounters in the realms of best Endeavours, Werksmans Attorneys, Johannesburg
- Sumroy R. (2007), Best endeavours v. reasonable endeavours whay do they mean?, Slaughter and May, London
Author: Wojciech Ślusarczyk
