Best efforts vs commercially reasonable efforts

5

July 16, 2010 by styagi68


A few years ago I was negotiating a large contract.  In that, a line said something like–if the [x] fails, then [y] will make best efforts to do [z].

Our lawyer wanted to change the words “best effort” to “commercially reasonable efforts.”  At first, the words “best efforts” seemed quite harmless to me, so I wanted to better understand the nuance here.  Turns out that in some cases “best efforts” have been extended to mean “doing everything in your control to achieve the desired outcome, irrespective of cost or other implications.”  For example, best efforts on pizza delivery would mean, did the person abandon  his motorcycle stuck in a traffic jam and ran to your home to deliver it on time.

Where as “commercially reasonable efforts” implies a trade-off with costs and other implications.  This was a really good point in a business setting.  E.g. the chance that he may lose his motorcycle versus being 15 minutes late on a delivery.

It appears that we make “best efforts” to achieve commercial success when we do not consider the impact it has on our body, health and long term happiness.  I have at times flown across the Atlantic Ocean, attended a one hour meeting and flown right back.  Without thinking if it had an impact on my body and our environment?  I don’t even remember who I met in most of these meetings nor what was discussed.

We would be well served–for once–to do commercially reasonable efforts in pursuit of our material goals keeping in mind the holistic costs and implications.  In addition to the profit impact, pay some attention to the impact on your relationships, your health, your own mental and spiritual health of all the activities you think are so important right now.

5 thoughts on “Best efforts vs commercially reasonable efforts

  1. Amit Prakash Singh's avatar Amit Prakash Singh says:

    Interesting reading Sandeep!!!

    Just an argument… Are courts so dumb that they discard the purpose of entering into a contract, which in most business cases will be commercial…

    Why legal fraternity discard common sense and is ruled by semantics??

  2. Great idea, but will this work over the long run?

  3. Subbu's avatar Subbu says:

    My organisation recently went through this awakening ! All agreements server their purpose only when relationships are strained. Everything is fair in love and war, so we need to be careful…

  4. sanjay raj's avatar sanjay raj says:

    sandeep looks like you are headed towards “spiritually reasonable efforts to succeed in material world”

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