What is it?
Clause type | This term governs contractual obligations related to performance standards, often appearing in service agreements or purchase orders.
reasonable efforts
UCC / CommercialLegal glossary term
Quick answer
Reasonable efforts usually means a prudent business person must take concrete steps toward an objective. In contracts, it matters because it sets a measurable performance standard beyond just trying hard. Before signing, check if 'reasonable' is qualified (e.g., commercially reasonable).
Definitions
What is reasonable efforts?
Legal Definition
Reasonable efforts describes a standard of performance requiring a party to take actions that a prudent, sensible business person would undertake under similar circumstances. This contractual obligation creates a duty beyond mere 'best efforts,' demanding tangible steps toward achieving an agreed-upon goal. The key qualifier often debated is whether the required action must be commercially reasonable or merely technically feasible.
Plain-English Translation
It means you promise to try your hardest, like when you agree to walk the dog; you have to actually put on shoes and grab the leash, not just think about it.
Contract relevance
Why reasonable efforts matters in contracts
Failure to meet this standard can constitute a breach of contract, leading to damages awarded by the injured party. The defaulting party bears the risk of non-performance.
Document context
Where reasonable efforts appears in documents
| Document type | Section | Why it matters |
|---|---|---|
| Service Agreement | Scope of Work Clause | Defines the minimum required action for service delivery. |
| Purchase Order | Delivery Terms Section | Governs how diligently the seller must try to meet a deadline. |
| Lease Contract | Maintenance Obligations | Dictates the level of repair effort landlord must expend. |
| Statute/Regulation Compliance Document | Remediation Requirement | Sets the standard for fixing regulatory breaches. |
Contract language
Common contract wording
| Contract wording | Plain-English meaning | What to check |
|---|---|---|
| Use reasonable efforts to secure financing | The party must actively pursue loans and negotiate terms, not just wait for them. | Ensure the contract specifies *how* diligent these efforts are. |
| Exercise reasonable commercially reasonable efforts | This is stronger than simple effort; it implies actions taken align with industry norms. | Look for this phrase if you want a higher standard of performance. |
Red flags
Red flags to watch for
Wording examples
Clearer wording examples
Vague wording
'Reasonable efforts'
Clearer wording
'Good faith efforts consistent with industry standards and documented in writing'
Vague wording
'Use reasonable efforts'
Clearer wording
'Take at least [specific number] of commercially reasonable actions from the following list'
Note: “clearer” means easier to read — not legally reviewed or guaranteed safe.
Pre-signature checklist
What to check before signing
1
Is 'reasonable' defined in a schedule or appendix?
2
Does the contract specify what constitutes an *unreasonable* effort?
3
Are there limitations on cost or time associated with the effort?
4
Does it require efforts toward a specific, measurable goal?
5
Can you define the threshold for success (e.g., 75% probability)?
Party impact
How reasonable efforts affects each party
| Party | What this party should check |
|---|---|
| Client | Check if the required efforts match your business capabilities and expectations. |
| Vendor/Contractor | Ensure the obligation doesn't force unreasonable spending or risk onto them. |
| Buyer | Confirm the seller's effort level matches what you need to secure the goods. |
| Landlord | Verify that repair efforts are sufficient for habitable living. |
Comparison
reasonable efforts vs similar terms
| Related term | Plain meaning | Main difference from reasonable efforts |
|---|---|---|
| Best Efforts | Requires maximum possible exertion, often overriding financial constraints. | Reasonable efforts is less demanding; it requires prudence within reasonable boundaries. |
| Commercially Reasonable Efforts | Focuses on actions a typical business would take given current market realities and costs. | This is the most common standard in commercial contracts. |
Missing or vague
If reasonable efforts is missing or vague
If 'reasonable efforts' lacks context, disputes will explode over what constitutes adequate action. One party might argue they called three vendors; the other argues that calling five was necessary. Without definition, a court must guess at industry norms, which is never ideal for business certainty.
This ambiguity leaves you vulnerable to claims of breach of contract even if you acted diligently.
Document map
Document section map
| Contract section | What to inspect |
|---|---|
| Scope of Work | Look here to see what goal the effort is directed toward. |
| Indemnification Clause | Check this section to see *who* bears the risk when efforts fail. |
| Termination for Cause | This defines when failure to use reasonable efforts allows termination. |
| Representations and Warranties | Verify if the party must use reasonable efforts to prove their stated claims are true. |
Visual model
Understand reasonable efforts fast
An explainer image has not been generated for this term yet.
01
Landlord, signing a lease renewal, takes reasonable efforts by presenting three comparable market offers to the tenant, resulting in a favorable 3-year extension.
02
Borrower, seeking loan approval, takes reasonable efforts by submitting all required tax documents and scheduling credit checks within 60 days, securing the necessary financing.
03
Franchisor, developing new software for franchisees, takes reasonable efforts by allocating dedicated developer hours and holding bi-weekly review meetings, leading to a market launch ahead of schedule.
Document context
How reasonable efforts shows up in legal documents
Why does it matter?
Failure to meet this standard can constitute a breach of contract, leading to damages awarded by the injured party. The defaulting party bears the risk of non-performance.
When does it matter?
This duty is triggered when the underlying contractual milestone approaches, such as before closing on real estate or finalizing an acquisition target. It remains active until the obligation is discharged.
Where is it usually seen?
It appears frequently within purchase orders under the UCC § 2-305 and in complex commercial agreements like licensing contracts or MSA appendices.
Who is affected?
The indemnitor owes the duty, gaining protection from loss if they perform; the obligee gains assurance of performance toward their desired outcome.
How does it work?
First, a party must actively engage with the task. Then, they must expend resources commensurate with the industry norm. Finally, this action must be directed toward achieving the specific contractual objective.
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Wikipedia
Reasonable efforts
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Where reasonable efforts connects to real contract work
This layer links the term to nearby glossary entries, document use cases, and contract-risk guides so readers can move from definition to context without dead ends.
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Glossarycommercially reasonablecommercially reasonable often shapes similar contract language wording, negotiation leverage, and the plain-English meaning of the...Glossarypurchase orderpurchase order often shapes similar contract language wording, negotiation leverage, and the plain-English meaning of the clause ar...Glossaryacquisitionacquisition often shapes similar contract language wording, negotiation leverage, and the plain-English meaning of the clause aroun...
BGRisk context hubGlossary meaning, document paths, and adjacent risk pages connected around this clause.
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Source & disclosure
This page is an AI-assisted plain-English explanation based on LexPredict Legal Dictionary context and contract-review patterns. It is not legal advice. Meaning may vary by jurisdiction, industry, and exact clause wording.
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