We are often asked what the difference is between « reasonable efforts » and « best efforts. » This is sometimes referred to as « reasonable effort » or « maximum effort. » This is often a sticking point in negotiating agreements and sometimes causes disputes. The terms « best efforts » and « reasonable efforts » are vague and difficult to interpret. There are also many variations – such as « economically reasonable efforts ». The term « commercially reasonable efforts » is often used in contract design, with several dozen decisions notified since 1999 taking into account contracts containing this term. However, this whole sentence received little legal significance. In light of the case law on « medium effort » and « reasonable effort », it is necessary to consider whether the term « commercially reasonable » implies a lower or higher standard than « reasonable effort ». In other words, is « commercially reasonable efforts » limited only to those steps 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? This is an open question. Justice Dorgan noted that the « best efforts » standard was an onerous standard, exemplified by the phrase « nothing wrong, » albeit in the general context and purpose of the contract itself, and was more onerous than « reasonable effort. » Justice Dorgan`s analysis of « best efforts » in atmospheric diving has been confirmed by a number of Canadian decisions.5 Parties often use the term « reasonable efforts » in contracts where the person does not want to accept strict liability for non-performance to ensure that something is done, but intends to comply with it until something happens beyond their control. For example, in a lease, the landlord agrees to the following condition: « . The landlord will use reasonable efforts to fill the vacancy to mitigate damage if the tenant violates this lease.
« Reasonable effort, in relation to a particular objective, refers to the effort that a reasonable person in the promisor`s position would make to achieve that objective as quickly as possible, but does not include the following: The reasonable effort standard has always been interpreted as opposed to the obligation to do one`s best – as being slightly inferior to best efforts. The term commercially reasonable effort has been widely interpreted as synonymous with reasonable effort. The question arises as to whether the approach taken by the party is consistent with sound judgment and has as its primary objective financial considerations. First and foremost, as counsel for the employer argued, reasonable effort does not mean « all » effort or « all effort. » This means making an effort which, on the whole, is reasonable and which, since it is a broad clause of general application, will depend on the particular circumstances of the particular case. The three most commonly used clauses are « best efforts », « reasonable efforts » and « commercially reasonable efforts ». Lawyers and contractors generally consider best efforts to be the most demanding, economically reasonable efforts to be the least important, and reasonable efforts to be the middle ground. As discussed below, what counsel and parties believe is not necessarily what the case law dictates. In the context of a hedging agreement, the standard for a « commercially reasonable » transaction was described as follows: [T]he achievable efforts do not mean « all efforts ».
It is not « effort to the point of undue hardship. » This does not mean « all efforts ». What this means is efforts that, by and large, are reasonable in the circumstances. What is appropriate in the circumstances depends, of course, on the circumstances of each case. Recently, the Court also suggested a reasonable effort standard in a contract that did not contain such a clause. The plaintiff, Cor-Ex, was engaged in transporting water to fracking sites. For this, he had a number of contracts to obtain water. The contract in question was concluded between Cor-ex and Associated Aggregates, under which Associated Aggregates was obliged to supply water exclusively to Cor-ex and Cor-ex to water. Associated Aggregate refused to comply with the agreement, but argued that it should be exempted from the obligation to supply water because Cor-ex had breached the implied obligation to do its best to purchase/market its water. Effort clauses are more likely to be used when one party is unable to control an outcome, the parties cannot predict whether an outcome can be achieved, or a party is simply unwilling to guarantee an outcome. For example, a party selling its business may require the consent of a third party to an assignment of a contract between the selling party and the third party.
The sales contract could require the seller to obtain his consent, otherwise it would violate the agreement or impose one of the « efforts » standards. As long as the seller has made the necessary efforts, it would not be contrary to the contract for the third party to refuse to consent to the assignment of his contract. « means, with respect to the making of an undertaking, the efforts that a reasonable person in [the promisor`s] position would make to fulfil that obligation as expeditiously as possible. 1 At first glance, « reasonable efforts » seems to be a good term that encompasses the idea that the promisor does not interfere with or sit on an undertaking, but the effective use of the term « reasonable efforts » should be further defined to remove ambiguity. Ambiguity is exacerbated in the eyes of the promise when it suffers a negative consequence of not keeping the promise. One way to avoid possible problems, difficulties or legal disputes with the meaning of these norms is to define the standard in the agreement (specify the nature of the effort to be made) and not to leave its interpretation to third parties.
