Encountering the phrases, "best efforts",
"reasonable efforts" and "commercially reasonable
efforts" in commercial contracts sans definition leaves enough
latitude for interpretation to cause uncertainty.
Nevertheless, a considerable amount of jurisprudence does provide
A hierarchy has been accepted whereby "best efforts"
imposes the most onerous requirement in comparison to
"reasonable efforts" or "commercial reasonable
efforts". As between the latter two phrases, the courts have
yet to clearly delineate the difference, if any.
In Atmospheric Diving Systems Inc. v International Hard
Suits Inc., the BC Supreme Court summarizes existing case law
to describe "best efforts" as follows:
Taking, in good faith, all reasonable steps to achieve the
objective, carrying the process to its logical conclusion and
leaving no stone unturned... Doing everything known to be usual,
necessary and proper for ensuring the success of the endeavour.
The court cautioned that each analysis is a fact-based one, and
that there is no absolute duty to achieve the contractual
objective. Rather, the analysis will require an examination of
whether the individual was acting in good faith with a true attempt
at fulfilling the obligation. In sum, there is a high expectation
of performance balanced by a standard of reasonableness.
The term "reasonable" has been judicially interpreted
to mean the taking of all reasonable and measured steps to achieve
an objective in the circumstances. Reasonableness is defined more
by what it does not require, rather than by what it does require,
in the given circumstances. The standard of reasonableness does not
require an individual to expend efforts to the point of undue
The distinction, if there is one, is unclear between the
phrases, "reasonable efforts" and "commercially
reasonable efforts". Not yet judicially determined, it can be
contended that both phrases, in a commercial context, reference the
same standard of effort. While it may be suggested that
"commercially reasonable efforts" means pursuing an
objective until it becomes economically unreasonable for
an individual to continue, it is arguable that the concept of
"reasonable efforts" would yield substantively the same
interpretation of effort in a commercial context.
In light of this open-to-interpretation and contextualized
understanding of the differences between "best efforts",
"reasonable efforts" and "commercially reasonable
efforts", parties to a commercial contract would be prudent to
clearly define the specific, tangible actions that must be taken in
order to fulfill a particular "efforts" standard.
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