Interpreting and Drafting Efforts Provisions: From Unreason to Reason

Contracts often feature efforts standards—best efforts, reasonable efforts, and other variants. In the United States, England, and Canada, many who work with contracts accept the idea of a hierarchy of efforts standards, with some imposing obligations that are more onerous than others. With minor exceptions, U.S. courts have rejected the idea, whereas courts in England and Canada have accepted it. But no one has coherently explained their position. This article demonstrates that a hierarchy of efforts provisions is unworkable, for three reasons. First, imposing an obligation to act more than reasonably is unreasonable. Second, requiring that a contract party act more than reasonably creates too much uncertainty as to what level of effort is required. And third, legalistic meanings attributed to efforts standards conflict with colloquial English. Furthermore, rationales offered to validate the idea of a hierarchy of efforts standards fall short. This article proposes how courts should interpret efforts provisions. Specifically, they should ignore the conventional wisdom that a best efforts obligation is more onerous than a reasonable efforts obligation. This article also recommends how drafters can take control of efforts provisions. It proposes a simple and unobtrusive fix—use only reasonable efforts and structure efforts provisions to minimize the vagueness.