Best Efforts Clauses

Summary

This practice note looks at the purpose, meaning and interpretation of "best efforts" clauses in a contract, as well as how "best efforts" are measured and determined in the context of an agreement. The best efforts standard in large measure subordinates a party's own economic interests to that of the contracting counterparty, although not to the extent of complete self-sacrifice, and can be distinguished from "commercially reasonable efforts" as imposing a higher obligation. This practice note also discusses how a best efforts commitment from a government entity is distinguished from other best efforts obligations.