In 1979, the great Second Circuit judge Henry Friendly wrote that the meaning of contractual “best efforts” provisions was “far from clear” under New York law.1 While many things have changed since 1979 (a time when the Soviet Union existed and cell phones did not), Friendly’s observation persists. In fact, since Friendly’s observation was made, New York law in this area has become even murkier, driven largely by a First Department decision in 2000, Timberline Development v. Kronman,2 which cast doubt on whether “best efforts” provisions were even enforceable in the absence of “objective criteria against which a party’s efforts can be measured.”3 The Timberline line of decisions is problematic for a number of reasons that will be explored in this article. This article will also discuss recent case law appearing to retreat from Timberline’s absolute rule—a rule peculiar to New York.

Background

“Best efforts” provisions (and similar provisions, like “reasonable best efforts” and “commercially reasonable efforts”) are typically used to set a general standard for the amount of effort that a contracting party is required to devote to an objective outside of its exclusive control, such as obtaining approval from a regulator or consent from a lender. In many circumstances, it would be impractical or undesirable to define expressly the scope of a party’s “best efforts” obligation at the outset of the parties’ agreement.

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