The term “Best Endeavors” is a phrase often used in commercial contracts. It obligates the party to take all reasonable steps necessary to fulfill a duty or obligation. This standard is higher than “reasonable endeavors” but can vary depending on the context and jurisdiction.
Legal Definition and Standard
Legally, “best endeavors” require a party to act with all the effort and resources reasonably expected in the pursuit of a specific objective. It implies a higher level of obligations than “reasonable endeavors,” though it does not compel parties to sacrifice their own commercial interests necessarily.
Practical Overview of Best Endeavors
Context and Applicability
In the context of contractual obligations, “best endeavors” indicates a commitment to achieve a specified result, using all available resources within reasonable bounds. The scope may cover:
- Time allocation
- Financial resources
- Workforce dedication
- Use of relevant technologies and methods
Examples in Commercial Contracts
- Merger and Acquisition Agreements: Parties may agree to use their best endeavors to obtain regulatory approvals.
- Supply Agreements: Suppliers might commit to best endeavors to meet delivery schedules despite unforeseen delays.
Ensuring Compliance
Contracts typically outline expectations and metrics for “best endeavors,” which can include progress reports, audits, and performance reviews to ensure compliance.
Limitations of Best Endeavors
Practical Constraints
While “best endeavors” obligates significant effort, it does not require unreasonable action such as:
- Incurring disproportionate costs
- Damaging the business’s viability
- Ignoring legal prohibitions
Jurisdictional Variations
Interpretations of “best endeavors” can vary significantly across jurisdictions. Some courts demand an objectively high standard of effort, while others may consider the subjective intentions of the obligated party.
Case Law Interpretation
UK Jurisprudence
In Jet2.com Limited v Blackpool Airport Limited (2012), the court imposed a broad obligation on the Airport to work towards the agreement, without harming its commercial interests excessively.
Australian Perspective
In Hospital Products Ltd v United States Surgical Corporation (1984), “best endeavors” were interpreted closer to a fiduciary duty, showing the phrase’s variable legal strength.
Related Terms
- Reasonable Endeavors: A lower standard than “best endeavors,” often requiring only reasonable steps be taken.
- All Reasonable Efforts: An intermediate standard focusing on reasonable actions without an exhaustive commitment.
FAQs
What does 'best endeavors' mean in a commercial contract?
How do 'best endeavors' differ from 'reasonable endeavors'?
Can 'best endeavors' be enforced in court?
References
- Jet2.com Limited v Blackpool Airport Limited [2012] EWCA Civ 417
- Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64
- Commercial Contracts: A Practical Guide, Oxford University Press (2021)
Summary
“Best endeavors” in commercial contracts signify a duty of significant commitment to fulfill contractual obligations. While higher than “reasonable endeavors,” it does not demand self-damaging sacrifices from the obligated party. The interpretation of this term can vary by jurisdiction and contractual context, making it crucial to draft clear terms and understand local legal nuances.
