Best efforts clause
This best efforts clause turns contractual obligations to make best efforts or reasonable endeavours as much as possible into a firm obligation
A best efforts clause means that if a contractual provision in a services agreement is qualified or limited by reference to use (commercially) reasonable efforts, best efforts or wording of a similar nature, it means the efforts that a service provider (or other person) desirous of achieving a result would use in similar circumstances to ensure that this result is achieved as expeditiously as possible. The clause makes explicit that for assessing whether such obligation was discharged properly, regard will be had, among other factors, to (i) the price, financial interest and other terms of the obligation; (ii) the degree of risk normally involved in achieving the expected result; and (iii) the ability of an unrelated person to influence the performance of the obligation. These factors are inspired by the Unidroit Principles.
The person under such an obligation shall, if a result aimed at is not achieved or achieved only after delay, upon the request by a Party explain:
- the actions taken by it in order to fulfil this obligation;
- any choices made, where two or more alternative courses of action would have been reasonably appropriate; and
- plausibly how any external factors influenced its performance and the achieved result.
More about best efforts clauses and how to use them is here.
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