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Best + Efforts = ?

By Jeffrey Hugh Newman

There is a common misconception that the obligation to satisfy a “best efforts” clause requires rigorous performance, regardless of hardship or cost to the promisor. This misconception of the meaning of the term “best efforts” stems from the divergence between common parlance and jurisprudence. Considering the term in the vernacular, “best efforts” implies superlative action. Therefore, when one puts forth one's “best efforts,” such action is not simply good, or better, but the best according to one's capabilities. James M. Van Vliet, Jr., “Best Efforts” Promises Under Illinois Law, Ill. B.J. 5 (Dec. 2000). The implication is that to satisfy a promise for “best efforts,” there is no limit as to what one will do, no hardship or expense too great to satisfy the obligation. In fact, it would appear that many believe this to be the definition of “best efforts.”

Jurisprudentially, some courts have similarly applied a rigorous standard when interpreting the term “best efforts.” Courts have applied such strict interpretation of “best efforts” clauses to obligate a party to enlist every possible effort to fulfill such party's promise, regardless of the economic consequences. In analyzing “best efforts” as a component of “good faith,” the court in In re Heard suggested that a “best efforts” obligation should be satisfied even at a loss to the one fulfilling the duty. In re Heard, 6 Bank. 876, 884 (Bank. W.D. KY. 1980).

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