Best efforts
Best efforts is a contract standard that requires a party to work hard toward a goal without guaranteeing the result.
What it means
Efforts clauses are used when a party cannot promise an outcome but can promise to work toward it, such as getting a third party’s consent, obtaining a permit or hitting a sales target. Instead of “will deliver X,” the contract says the party “will use best efforts to deliver X.” If the goal is missed, the question becomes whether the party tried hard enough.
There are several common versions, often described as a ladder: “best efforts” at the top, then “reasonable best efforts,” “commercially reasonable efforts” and “reasonable efforts.” The usual view is that best efforts can demand more cost and sacrifice, while commercially reasonable efforts lets a party weigh its own business interests. But courts do not consistently agree on the differences, and some treat the terms as largely the same.
For a distributor promising best efforts to sell a brand’s products, that could mean spending on marketing even when it hurts margins. Because the standards are vague, the most useful protection is defining them with specific actions, spending limits or minimum targets. Without that, a dispute turns on what a court thinks was enough.
What to watch for
- Check which efforts standard applies to each obligation, since contracts often mix them.
- Look for a definition of the standard, including whether it requires spending money, starting lawsuits or acting against your own interests.
- See whether concrete actions, budgets or targets are listed so there is a clear measure of performance.
- Consider whether an obligation should be a firm promise instead of an efforts obligation, or the other way around.
Example clause
Distributor will use commercially reasonable efforts to promote and sell the Products in the Territory, which will include spending at least $10,000 per calendar quarter on marketing the Products.
The distributor must make a real business effort to sell the products, including at least $10,000 a quarter on marketing, but does not guarantee any sales.