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Legal information, not legal advice. How a phrase is read depends on the governing law and the rest of the agreement.

"Best efforts" is a standard of performance for obligations a party cannot guarantee, such as obtaining a regulatory approval or a third party's consent. It sits alongside related phrases such as "reasonable efforts", "commercially reasonable efforts" and "all reasonable efforts".

Many drafters assume these phrases form a clear ladder, with best efforts the most demanding. American courts have not applied them consistently. Some decisions treat best efforts as requiring a party to do essentially everything it can, even at significant cost; others treat the phrases as broadly similar and look instead at what the parties actually did and could reasonably have done.

The uncertainty comes from the fact that the phrases are rarely defined. A court asked whether a party used best efforts has to supply the meaning itself, usually by reference to the context, industry practice and the party's own circumstances. English courts have their own line of cases on the same phrases, which reach different conclusions on some points.

The safer course is to define the standard or replace it with specific steps. For example: the party will file the application within ten business days, respond to agency requests within five, and is not required to pay more than a stated amount or to start litigation. Specific steps are easier to perform and easier to prove.

Consider a licensee that agrees to use best efforts to market a product. If sales disappoint, the licensor may argue the licensee should have spent more on advertising or hired more staff. The licensee will point to its other products and its own commercial judgment. Without a definition, the outcome turns on evidence about what a diligent company in its position would have done.

A useful drafting habit is to pair the efforts standard with a short list of things the party is not required to do, such as paying significant sums to third parties, starting litigation, or acting against its own reasonable commercial interests. That list does more to settle expectations than the choice between "best" and "reasonable".

Whatever standard is chosen, use the same phrase throughout the agreement. A contract that mixes several efforts phrases invites the argument that each was meant to carry a different meaning.

When AI reviews an efforts clause, it tends to describe the phrase with more certainty than the law supports. Ask it what steps the clause actually requires, whether the standard is defined, and which law governs. Then decide whether the clause needs a definition or a list of steps.