What Is a Best Efforts Clause? Definition, Risks & Red Flags Explained
A best efforts clause sounds straightforward — try hard to make something happen. But in contract law, the exact words used carry serious legal weight. Whether a contract says 'best efforts,' 'commercially reasonable efforts,' or 'reasonable efforts' is not a stylistic choice — it is a meaningful legal distinction that affects how much you are obligated to do, at what cost to yourself, and what happens if you fall short. If your contract contains any version of this clause, you need to understand what standard you are actually agreeing to before you sign.
Upload your contract to Contrivox to instantly identify the exact efforts standard you are being held to, flag missing definitions and one-sided obligations, and get a plain-English breakdown of what that clause actually requires you to do.
Analyze My Contract →What Is a Best Efforts Clause?
Plain English
A best efforts clause requires you to take all reasonable steps to achieve a specific outcome, even if success is not guaranteed. It does not promise a result — it promises a level of effort. The problem is that 'best efforts,' 'reasonable efforts,' and 'commercially reasonable efforts' each carry a different threshold, and the difference can determine whether you are in breach of contract.
Legal Context
Drafters use efforts clauses when a specific outcome cannot be guaranteed but one party still wants a commitment to pursue it — for example, securing regulatory approval, obtaining third-party consent, or closing a financing round. The clause shifts the obligation from 'you must deliver this result' to 'you must genuinely try to deliver this result.' Courts are then left to determine whether the party's actual conduct met the required standard, which is where disputes arise.
How It Appears in Contracts
Efforts clauses appear throughout commercial contracts, particularly in M&A agreements, licensing deals, distribution contracts, joint ventures, and financing arrangements. They often attach to milestone obligations where external factors may affect success.
What to look for in the actual clause text:
- The exact phrase used — 'best efforts,' 'reasonable best efforts,' 'commercially reasonable efforts,' or 'reasonable efforts' are not interchangeable and each carries a different implied standard
- Whether the clause defines what specific actions will constitute compliance — an undefined standard is an invitation to dispute
- Whether the obligation is mutual or one-sided — if only you are bound by a best efforts standard, your counterparty has less skin in the game
Risks & Red Flags
Best efforts may require self-sacrifice
In many US jurisdictions, 'best efforts' has been interpreted to mean a party must take all steps within its power to achieve the result — even steps that are financially disadvantageous to itself. If you agree to use 'best efforts' to secure a third-party deal, you may be required to pursue it even if market conditions have made it a bad business decision. This is a high-risk standard to accept without careful thought.
The spectrum of standards is legally meaningful
'Best efforts,' 'reasonable best efforts,' 'commercially reasonable efforts,' and 'reasonable efforts' form a hierarchy — but courts do not always agree on the order or the gap between them. Many people treat these phrases as interchangeable when negotiating, but accepting 'best efforts' instead of 'commercially reasonable efforts' could expose you to a significantly higher obligation. The distinction is not semantic — it can determine who wins a breach of contract claim.
Undefined compliance creates litigation risk
When the contract does not specify what actions actually satisfy the efforts standard, either party can later argue that the other did not do enough. If you are obligated to use commercially reasonable efforts to close a deal and the deal falls through, the other side may claim you failed to meet the standard — and without a defined list of required actions, you have no clear defense. Vague efforts clauses are one of the most common sources of commercial contract disputes.
Cross-border contracts face interpretive uncertainty
US and UK courts have interpreted efforts clauses differently, and these differences matter in international deals. UK courts have historically treated 'best endeavours' as a high but not absolute standard, while US courts vary significantly by state. If your contract is silent on governing law, or if counterparties are in different countries, you may face genuine uncertainty about which standard applies and what compliance looks like.
One-sided obligations create a power imbalance
Watch for contracts where only one party — typically the less powerful one — carries the efforts obligation. If you are required to use best efforts to deliver a result but your counterparty has no corresponding obligation to cooperate or facilitate, you may end up bearing all the risk of failure with no recourse if the other side obstructs your ability to succeed.
No time limit on the obligation
An efforts clause without a defined end date can obligate you to keep trying indefinitely. If you agree to use best efforts to obtain regulatory approval, and no deadline is specified, you may technically remain in breach until you either obtain approval or the contract is terminated. Always check whether there is a sunset date or a defined event that releases you from the obligation.
Enforceability
Best efforts clauses are generally enforceable in both the US and UK, but their enforceability depends heavily on how specific the obligation is and which jurisdiction governs the contract. Courts have generally upheld these clauses even when the required standard is not precisely defined, but vague or ambiguous drafting can reduce the clause to a near-unenforceable standard or trigger prolonged litigation over what compliance required.
In the US, enforcement and interpretation vary significantly by state — New York courts, for example, have sometimes treated 'best efforts' and 'reasonable efforts' as equivalent, while other jurisdictions maintain a clearer hierarchy. In England and Wales, courts have recognized 'best endeavours' as a demanding but not absolute standard, generally sitting above 'reasonable endeavours.' EU-governed contracts may apply different civil law principles that do not map directly onto common law efforts standards. Consult a lawyer familiar with the governing law of your specific contract before accepting or proposing any efforts standard.
Negotiation Tips
- Push for 'commercially reasonable efforts' over 'best efforts' wherever possible — it incorporates a cost-benefit test that protects you from being required to take steps that are financially ruinous or commercially irrational
- Negotiate a defined list of specific actions that will constitute compliance with the efforts standard — for example, 'commercially reasonable efforts shall include, at minimum, submitting the application within 30 days and responding to all agency requests within 10 business days' removes ambiguity and limits dispute risk
- Add a time cap — include a clear end date or triggering event after which the efforts obligation expires, so you are not indefinitely bound to pursue an outcome that has become impractical
- Make the obligation mutual where possible — if you are required to use efforts to achieve a result, push for your counterparty to have a corresponding obligation to cooperate, provide information, or take actions within their control that are necessary for success
- Clarify the governing law and jurisdiction before agreeing to an efforts standard — because interpretation varies significantly between US states and between the US and UK, the same words can mean very different things depending on which court would hear a dispute
- If you are on the receiving end of a 'best efforts' obligation, consider adding a carve-out that explicitly states the obligation does not require you to take steps that would violate applicable law, breach other agreements, or result in material financial harm to your business
Upload your contract to Contrivox to instantly identify the exact efforts standard you are being held to, flag missing definitions and one-sided obligations, and get a plain-English breakdown of what that clause actually requires you to do.
Analyze My Contract →Frequently Asked Questions
What is the difference between 'best efforts' and 'commercially reasonable efforts'?
'Best efforts' is generally considered the highest efforts standard — in some jurisdictions it can require a party to exhaust virtually all available options, even unprofitable ones. 'Commercially reasonable efforts' incorporates a cost-benefit analysis, meaning you are not required to take steps that a reasonable business would consider economically irrational. In practice, the gap between these standards can determine whether you are in breach when a deal falls through, so the choice of language matters significantly.
Is a 'reasonable endeavours' clause the same as a 'best efforts' clause?
No — in English law, 'reasonable endeavours' and 'best endeavours' are treated as distinct standards, with 'best endeavours' generally imposing a higher obligation. 'Reasonable endeavours' typically allows a party to balance its own commercial interests against the obligation, while 'best endeavours' requires more sacrifice. In US contracts, the term 'reasonable efforts' is more common and may be interpreted differently depending on the state, so always check the governing law.
Does 'reasonable best efforts' mean the same as 'best efforts'?
'Reasonable best efforts' is a hybrid phrase that some drafters use intentionally and others use loosely — and courts have not reached a consensus on whether it differs from 'best efforts' or sits closer to 'commercially reasonable efforts.' The phrase is genuinely ambiguous, which creates risk for both parties. If you see this language in a contract, it is worth negotiating a clearer definition or replacing it with a more established standard.
Can I be in breach of contract if I tried but failed to achieve the result?
Yes — an efforts clause does not require you to succeed, but it does require you to have made the required level of effort. If the other party can show that you did not take the steps a reasonable party would have taken to pursue the outcome, you can be found in breach even if success was never guaranteed. This is why documenting your efforts — every action taken, every communication sent, every obstacle encountered — is important when you are subject to an efforts obligation.
Are efforts clauses enforceable if they do not define what 'efforts' means?
Courts have generally held that efforts clauses are enforceable even without a precise definition, applying an objective standard based on what a reasonable party in the same position would have done. However, undefined clauses create significant uncertainty and are far more likely to result in litigation. Where possible, negotiating specific actions into the contract reduces ambiguity and provides a clearer basis for demonstrating compliance.
How do US courts interpret 'commercially reasonable efforts' compared to UK courts?
US courts — particularly in commercial states like Delaware and New York — have generally treated 'commercially reasonable efforts' as a standard that allows a party to consider its own economic interests, meaning actions that are commercially irrational are not required. UK courts apply a similar analysis to 'reasonable endeavours' but interpret 'best endeavours' more stringently. Because interpretation varies, cross-border contracts should specify the governing jurisdiction and, ideally, define the standard explicitly. Consult a lawyer for advice specific to your contract and jurisdiction.
What should I do if my contract only uses an efforts clause to define my obligation to deliver a result?
First, identify the exact standard used and determine whether it aligns with the risk you are willing to accept. If the clause is vague, consider negotiating a defined list of required actions or a clearer standard like 'commercially reasonable efforts.' You should also check whether there is a time limit and whether your counterparty has any corresponding obligations. If the stakes are high, have a lawyer review the clause before you sign.
Does an efforts clause protect me if circumstances change and the result becomes impossible?
Not automatically. An efforts clause focuses on whether you took the required steps — not on whether success was achievable. If circumstances change significantly, you may need to invoke a separate force majeure clause, frustration doctrine, or a material adverse change provision to be released from the obligation. An efforts clause alone does not typically excuse you from continued performance simply because the goal has become harder or less likely to achieve.