| gen. |
best endeavours (Negotiating an "endeavours" obligation in a contract is a familiar experience for corporate and commercial lawyers alike, and one which can often be contentious given the different levels of obligation that can be imposed (e.g. "reasonable", "all reasonable" or "best" endeavours). It is generally understood from case law that a "best" endeavours obligation requires the obligor to exhaust a number of reasonable courses of action, taking all those steps which "a prudent, determined and reasonable person, acting in its own interests and desiring to achieve that result would take". Although not an absolute obligation nor akin to a guarantee, a "best" endeavours obligation requires the obligor to go significantly further than merely using "reasonable" endeavours: he must be proactive and willing to deploy additional resources, such as pursuing routes of appeal or commencing litigation (or at least taking the time and effort to investigate the prospects of its success), even if such a course of action may have a negative impact on the financial situation of the party in question. That said, the cases show that a director's fiduciary duty to act in the best interests of the company will not be overridden by such an obligation. Indeed, case law makes it clear that a director is not expected to take a course of action that will lead to the "certain ruin of the company" or act "to the utter disregard of the interest of the shareholders". Nonetheless, a "best" endeavours obligation remains an onerous burden and should not be entered into lightly. Alexander Demidov); best efforts (also best endeavours) LAW the greatest possible effort to achieve something or do something, especially when this is difficult: *use your best efforts to do something: The buyer shall use his best efforts to get an acceptable purchase contract for this property. FINANCE the greatest possible effort by a financial organization, such as an investment bank, to sell a company's new shares, when it does not have to promise to sell them all and it does not have to buy the shares it does not sell: *use your best efforts to do something: The national distributor has agreed to use its best efforts to sell shares of the fund. best-efforts adjective [before noun] Many of this year's new loans have been done on a best-efforts basis. Definition of best efforts noun from the Cambridge Business English Dictionary Alexander Demidov) |
