I. Efforts Clauses in Distributor or Franchise Agreements – Ubiquitous (But What Are They Good For?)
A. A distributor would never agree to enter into a contract making it the distributor’s absolute duty to accomplish a goal, as doing so would pose an undue risk of future liability for nonperformance. As an alternative, an “efforts” clause imposes an affirmative performance obligation when accomplishing the goal of a contract is not entirely within the control of the promisor.
B. Generally, among the differing formulations, the “best efforts” clause is considered to be the most demanding.
1. Alternative formulations of “efforts” clauses: “reasonable best efforts”, “commercially reasonable best efforts”, “commercially reasonable efforts”, “diligent efforts”, “every effort”.