Understanding Commercially Reasonable Efforts in Business Contracts: Best Efforts vs Reasonable Efforts Explained

Imagine you’ve just landed your first big client deal - everything’s almost perfect, but in the fine print, you spot phrases like “commercially reasonable efforts,” “best efforts,” and “reasonable efforts.” They sound reassuring, but what do they actually mean for you and your business in practice? Understanding these terms isn’t just for legal boffins - it’s a crucial part of making sure your contracts protect your business, set clear expectations and keep you out of hot water down the line.

If you’re scratching your head or feeling nervous about these contractual commitments, don’t worry - you’re definitely not alone. In fact, sorting through “efforts” clauses is one of the most common sticking points for UK startups and small businesses. The good news? Once you understand the basics, you’ll be able to negotiate stronger, fairer contracts, and minimise your risks - right from day one.

In this guide, we’ll break down what “commercially reasonable efforts” actually means, how it compares to “best efforts” and “reasonable efforts”, and how you can make sure you’re covered when these phrases show up in your agreements. Let’s get started.

What Does “Commercially Reasonable Efforts” Mean in a Business Contract?

If you’ve ever signed a contract, you’ve probably come across the phrase “commercially reasonable efforts.” But what does it mean in plain English?

Essentially, this term sets the standard for how hard one party must try to meet a specific obligation. It asks a business to act with the level of effort, care, and diligence that would be expected of a reasonable company in similar commercial circumstances. The key is that this standard takes into account what’s practical and sensible for a business, rather than expecting heroic or “all cost/no limit” measures.

• Example: If your contract says you must use “commercially reasonable efforts” to deliver goods on a set date, you need to do what a reasonable business would do to meet that deadline, even if issues outside your control crop up. But you aren’t expected to bankrupt your business just to make it happen.

In the UK, there isn’t a strict legal definition for “commercially reasonable efforts,” but courts tend to interpret it as requiring a meaningful, genuine attempt to fulfil the obligation - considering industry norms, your resources, and risks to your business.

How Do “Best Efforts” and “Reasonable Efforts” Compare?

Here’s where things can get a bit fuzzy! You’ll see a variety of efforts-based phrases in UK business contracts, including:

• Best efforts
• Reasonable efforts
• All reasonable endeavours
• Commercially reasonable efforts

Each phrase signals a different level of obligation. Let’s review what they mean (and how they stack up):

Best Efforts

This is the most demanding standard. “Best efforts” requires you to pursue every possible avenue and do everything within your power to achieve the goal, even if it means going beyond normal business practice or taking on extra cost and inconvenience (within reason).

• It’s not an absolute guarantee, but it does mean going to great lengths - almost at the level of your business’s own survival.

Reasonable Efforts

A less stringent standard, “reasonable efforts” expects you to try hard, but not to the point of major sacrifice or business risk. You should take active, practical steps to meet the obligation, but you aren’t expected to act against your company’s own interests.

Commercially Reasonable Efforts

This is somewhere in the middle - often considered stronger than “reasonable efforts” but less onerous than “best efforts.” You’ll be expected to act with the care and effort a prudent business would use in your industry, balancing performance against reasonable commercial risk and cost.

• It’s about what makes sense commercially - not going to extremes, but not giving up easily either.

For a more detailed breakdown and examples of what makes a contract clause enforceable, see 5 Crucial Clauses Every Contract Needs To Stand Up In Court.

Why Do These Phrases Matter So Much?

You might be wondering: “Does it make that much difference which wording is in my contract?” The short answer is yes! The standard of effort you agree to can have real-world consequences if a dispute arises.

• Agreeing to a higher standard (“best efforts”) can make you accountable for failing to go ‘above and beyond,’ potentially exposing you to more risk and liability.
• A lighter standard (“reasonable efforts”) gives you more flexibility, but could be less reassuring to the other party if they need assurance of completion.
• “Commercially reasonable efforts” tries to balance both parties’ interests - by recognising that business obligations must remain practical and proportionate.

The phrase chosen determines what courts will expect if the deal goes wrong - are you allowed to stop at a commercially sensible point (even if the outcome isn’t exactly what was promised), or do you have to pull out all the stops at your own expense? Getting this right at the outset protects you from accidental over-commitment.

Where Are “Efforts” Clauses Usually Found?

Clauses using the “commercially reasonable efforts”, “best efforts”, or “reasonable efforts” language appear in a wide range of UK business contracts, such as:

• Service Agreements: Where a provider commits to deliver results or meet milestones.
• Supply Contracts: For delivering goods or maintaining stock levels.
• Shareholder Agreements: When negotiating commitments to seek investment, compliance, or sales targets.
• Franchise Agreements: Often used in obligations around marketing, opening new outlets, or training.
• Sale of Business Agreements: Used when parties promise to secure approvals, transfer assets, or seek third-party consents.

If you’re running a business, you’ll bump into these clauses early and often. Sometimes, you’ll be the one being asked to commit; other times, you’ll want the other side to commit to a decent standard, so you can count on results.

How Do UK Courts Interpret “Efforts” Clauses?

Because “commercially reasonable efforts” and related phrases don’t have strict statutory definitions in the UK, courts will look at:

• The context of the contract and the business relationship.
• Industry customs and what the parties would have reasonably envisaged at the time.
• What steps the party actually took to fulfil the obligation.
• The cost, time, and practical obstacles to achieving the goal.

In most cases, you will not be penalised for failing to achieve an impossible outcome - as long as you can show you genuinely tried, in line with what would be sensible for a typical business in your shoes.

How To Draft and Negotiate Efforts Clauses That Protect Your Business

When it comes to “efforts” clauses, clarity is your best friend. Here are some steps to help ensure you’re protected:

1. Be Specific About What’s Required
   Spell out the actions, steps, or milestones expected. Wherever possible, avoid vague “efforts” promises without detail.
2. Define the Standard
   If you agree to “commercially reasonable efforts,” set out what this looks like in the specific contract context. Consider adding examples of what would (and wouldn’t) count.
3. Set Limits
   It’s standard to put in sensible caps on cost, risk or disruption - for example, “commercially reasonable efforts, provided this does not require expenditure above £X or action contrary to the business’s best interests.”
4. Include Timeframes
   Make it clear how long the obligation lasts, so you’re not on the hook indefinitely.
5. Allocate Risk Clearly
   Think through what happens if the target isn’t met - does the contract end? Is there a fallback plan, liquidated damages, or another outcome?
6. Get Professional Legal Help
   Don’t rely on templates or copy-paste. Efforts clauses should be tailored to your deal, your exact responsibilities, and the realities of your business.

If you’re unsure how to word or negotiate these terms, a lawyer can review, draft, or suggest appropriate changes. See our guide on making contracts clear and enforceable for more insights.

What If You Disagree On The Meaning Of “Commercially Reasonable Efforts”?

Disputes about how hard a party tried to fulfil their obligation are more common than you might think. If things go wrong, courts usually look at:

• The actual actions taken by the party claiming to have used “commercially reasonable efforts.”
• What would be reasonable in commercial terms, in your industry and at the relevant time.
• Whether it was fair to expect more, or whether pushing further would have been unreasonable, excessively costly, or likely to damage the party’s business.

Clear contract drafting can avoid most disputes. But if you’re facing a disagreement, it’s wise to document your decision-making, steps taken, and obstacles encountered, so you can show a track record of genuine effort if challenged.

Best Efforts vs Reasonable Efforts vs Commercially Reasonable Efforts: Quick Reference Table

Standard	What It Means	Common Use Cases
Best Efforts	Highest obligation - must take all possible actions, short of bankruptcy.	Big sales deals, high-stakes supply contracts, strict regulatory environments.
Commercially Reasonable Efforts	Strong but measured obligation - do as much as a sensible, prudent business would, balancing risk, cost, and practicality.	Most B2B contracts, IP or licensing deals, tech development, performance clauses.
Reasonable Efforts	Lower level - make a good-faith attempt; not required to risk business interests or spend excessive sums.	Everyday service agreements, distributorships, routine business relationships.

Common Mistakes When Dealing With Efforts Clauses

To make sure your small business isn’t caught out, watch for these missteps:

• Agreeing to “best efforts” when your business can’t feasibly deliver at that standard.
• Thinking “commercially reasonable efforts” means you can simply try once and give up.
• Leaving the meaning of “reasonable” or “commercially reasonable” undefined - which often leads to disputes later.
• Committing to efforts clauses without a proper fallback plan in the contract.

For more advice on avoiding classic contractual errors that cost small businesses, visit our article on 10 Small Business Mistakes.

Should You Ever Agree To A “Best Efforts” Clause?

Sometimes, you’ll be pressured to accept a “best efforts” promise, especially with larger clients or strict supply chains. Here’s how to approach it:

• Only accept “best efforts” if you are absolutely confident you can deliver come what may - or can limit the clause’s scope or add reasonable carve-outs.
• Consider suggesting “commercially reasonable efforts” instead, with examples of what this does (and doesn’t) require.
• If you’re not sure, pause negotiations and seek legal contract review before signing on.

If you’re in a regulated or high-risk sector, or a government/public sector contract, the choice of wording here can have even higher stakes - so advice tailored to your industry is essential.

What Legal Documents Should Include Efforts Clauses?

Whether you’re a startup, scaleup or established business, it’s worth knowing which types of contracts typically include these “efforts” standards - and where you should pay extra attention:

• Service Agreements - for service delivery and performance guarantees.
• Supply Agreements - for supply of goods or components on time and in good order.
• Shareholder Agreements - for commitments around growth, investment, and compliance.
• Franchise Agreements - typically requiring certain efforts in marketing, brand promotion, or outlet openings.
• Custom Commercial Contracts - tailored clauses for any project where outcomes and timelines matter.

If you’re creating or reviewing these documents, don’t just check for “efforts” language - also look for any caps on cost, limitations of liability or timelines, as these go hand-in-hand with efforts-based promises.

Key Takeaways: Protect Your Business With the Right Effort Clause

• “Commercially reasonable efforts” requires you to try hard to meet your obligations - but not at all costs. It’s about what’s sensible for a reputable business in your shoes.
• There’s a meaningful difference between “best efforts,” “reasonable efforts,” and “commercially reasonable efforts” - the wording in your contract really matters.
• Be specific in your contract about what these clauses mean in practice - set limits, define what’s included and for how long, and clarify risk allocation.
• Record and document all the steps you take to meet any “efforts” clause so you can prove your genuine attempts if challenged.
• Avoid generic templates - have these clauses tailored to your business and deal, and get professional legal input if you’re unsure.

If you’d like help with drafting, reviewing or negotiating efforts clauses in your contracts - or just want straightforward legal support for your business - you can reach us at team@sprintlaw.co.uk or 08081347754 for a free, no-obligations chat. Getting these details right now will save you stress and risk as your business grows.