Commercial agreements typically use certain phrases to describe the obligated level of effort: “best efforts” and “reasonable efforts. Parties to commercial agreements sometimes unwittingly obligate themselves to a very high intensity of effort, as they do not understand that these phrases have specific legal meanings.
“Best efforts” is the most onerous standard that a party commits to in fulfilling its obligations in a commercial agreement. The legal meaning of “best efforts” is summarized by Justice Dorgan of the British Columbia Supreme Court in the case of Atmospheric Diving Systems Inc. v. International Hard Suits Inc., (1994), 89 B.C.L.R. (2d) 356 at paragraphs 77-79 (which was considered by Justice Kent of Court of Queen’s Bench in Amonson v Martin Goldstein Professional Corp. (1995), 27 Alta. L.R. (3d) 78):
1. “Best efforts” means taking, in good faith, all reasonable steps to achieve the objective, carrying the process to its logical conclusion and leaving no stone unturned.
2. “Best efforts” includes doing everything known to be usual, necessary and proper for insuring the success of the endeavour.
3. The meaning of “best efforts” is, however, not boundless. It must be approached in the light of the particular contract, the parties to it and the contract’s overall purpose as reflected in its language.
Importantly, where the parties use the term “best efforts” in a contract, the courts will conclude that something more onerous than “reasonable efforts” was intended.
“Reasonable efforts” is typically juxtaposed against the meaning of “best efforts”. It is often described as something less than “best efforts”. In Armstrong v. Langley (Township) (1997), 42 M.P.L.R. (2d) 34 at para. 34, Justice Stromberg-Stein of the British Columbia Supreme Court states “[r]easonable efforts does not mean best efforts which imports a higher obligation on persons to accomplish the required task.” The Ontario Superior Court of Justice in Logic 2000 Inc. v. CNC Global Ltd., 2002 CarswellOnt 1412, a decision affirmed by the Ontario Court of Appeal, determined that “reasonable efforts” included taking “all reasonable and measured” steps. “Reasonable efforts” as a result is less demanding than best efforts and does not require the obligated party to leave “no stone unturned”.