Commercially Reasonable Efforts Law and Legal Definition

Commercially reasonable efforts is a term incapable of a precise definition and will vary depending on the context in which it is used. It is based upon a standard of reasonableness, which is a subjective test of what a reasonable person would do in the individual circumstance, taking all factors into account. Commercially reasonable efforts refer to efforts which use a standard of reasonableness defined by what a similar person would do as judged by the standards of the applicable business community.

The test for commercially reasonable efforts is less stringent than that imposed by the ‘best efforts’ clauses contained in some agreements. A business may give reasonable consideration to its own interests, exercising discretion within its good faith business, judgment, in devising a strategy for achieving its ultimate goal. Commercially reasonable efforts should be consistent with good faith business judgments.