Definition of "Best Endeavours" v "Reasonable Endeavours"
Discussion
I am going into an agreement and part of it means the other party must do something for me when they can, as I understand it "best" means they have to asap regardless of circumstance, "reasonable" means they can try their best but can play for time? I have been advised but as ever I like to seek the "PH perspective" when ever possible.
Cheers
Cheers
Does exactly what it says on the tin.
"Best endeavours" means you/they must try as hard as you can to achieve whatever by whenever.
"Reasonable endeavours" means you/they must try reasonably hard.
Neither says "MUST, MUST, MUST come hell or high water", so not "asap regardless of circumstances" - clearly, that would be unreasonable. Just... no slacking or lame excuses.
"Best endeavours" means you/they must try as hard as you can to achieve whatever by whenever.
"Reasonable endeavours" means you/they must try reasonably hard.
Neither says "MUST, MUST, MUST come hell or high water", so not "asap regardless of circumstances" - clearly, that would be unreasonable. Just... no slacking or lame excuses.
I'm not a lawyer, but I do draft T&Cs and contracts.
My personal approach is to use the plainest english possible, and to define terms without any ambiguity.
A useful exercise is to play Devil's Advocate where you ask yourself: "If I ever have to bring up this term to enforce this, could they wriggle out, or at least cause a dispute over terminology?"
Is there not a better way to define what needs to be done, which is either unambiguous or at least under your control? Or failing that, you just define what you deem 'Best' or 'Reasonable' to be.
It's sometimes forgotten that the primary reason to draft terms is that the other party can understand exactly what they need to do to comply with them. The better job you do at that, the less you need to enforce them.
My personal approach is to use the plainest english possible, and to define terms without any ambiguity.
A useful exercise is to play Devil's Advocate where you ask yourself: "If I ever have to bring up this term to enforce this, could they wriggle out, or at least cause a dispute over terminology?"
Is there not a better way to define what needs to be done, which is either unambiguous or at least under your control? Or failing that, you just define what you deem 'Best' or 'Reasonable' to be.
It's sometimes forgotten that the primary reason to draft terms is that the other party can understand exactly what they need to do to comply with them. The better job you do at that, the less you need to enforce them.
Edited by JustinP1 on Wednesday 11th November 13:11
I am financing a import consignment, they have a customer, he has paid 50% to the company (not me or my company) and will pay the balance on delivery, I want the company I am lending to repay me asap once they get paid. I was using best endeavour or within x weeks of sale - good enough ?
DSLiverpool said:
I am financing a import consignment, they have a customer, he has paid 50% to the company (not me or my company) and will pay the balance on delivery, I want the company I am lending to repay me asap once they get paid. I was using best endeavour or within x weeks of sale - good enough ?
If I'm getting this right, you are merely the financier and the company has already sold the goods to the client, and they will pay on delivery?Is the customer paying them with cleared funds 48 hours before delivery, while stock is being unloaded, or 28 day terms?
Ideally, it's best for you to define an absolute date relative to delivery (which from experience can literally be a slow boat from China), plus a damages clause for late/non-payment.
Doing so might in turn make them be tighter on when they get payment themselves, which will reduce the risk of possible hassle for you.
Edited by JustinP1 on Wednesday 11th November 13:25
Breadvan72 said:
You are engaging in a (substantial?) international trade finance transaction, you already have a real life adviser, whose fees will be tax deductible, and who should be insured, and you are asking some made up people on a car forum for some more advice. Re-insurance?
I do agree. From knowledge of the OP from the business forum, he's a successful and sensible chap with a lot of experience.
I see what the OP is getting at. The issue is here not so much the wording but the practical implication of the setup. The solicitor may not have much experience in the realities and pitfalls of running a business, and/or the issues surrounding import/export.
They may do, but in any case it's a useful exercise for the OP to sound out his ideas and the level of protection he wants from the terms to report back to his solicitor on what he wants out of the situation.
Edited by JustinP1 on Wednesday 11th November 13:33
I just like to hear it from the forum, I do have quite expensive advice however I am mindful that professional help can still miss things.
This is the start of a hopefully fruitful relationship and I dont want to come over too heavy on the young lads doing the work, I am comfortable on "best endeavour" with a maximum time of x days after payment. They have 50% up front, the balance on the day of delivery (before off loading to the end user and after samples seen) the ONLY thing that I see causing an issue is if the product is gash on delivery (as per the "Chinese risk") and as such this is a relatively small investment I am prepared to risk. (in PH terms a 2003 Volvo V70 value).
I just wanted the best of those two terms used and will use "best" as advised - thanks chaps
This is the start of a hopefully fruitful relationship and I dont want to come over too heavy on the young lads doing the work, I am comfortable on "best endeavour" with a maximum time of x days after payment. They have 50% up front, the balance on the day of delivery (before off loading to the end user and after samples seen) the ONLY thing that I see causing an issue is if the product is gash on delivery (as per the "Chinese risk") and as such this is a relatively small investment I am prepared to risk. (in PH terms a 2003 Volvo V70 value).
I just wanted the best of those two terms used and will use "best" as advised - thanks chaps
Breadvan72 said:
You are engaging in a (substantial?) international trade finance transaction, you already have a real life adviser, whose fees will be tax deductible, and who should be insured, and you are asking some made up people on a car forum for some more advice. Re-insurance?
This.DSLiverpool said:
I am financing a import consignment, they have a customer, he has paid 50% to the company (not me or my company) and will pay the balance on delivery, I want the company I am lending to repay me asap once they get paid. I was using best endeavour or within x weeks of sale - good enough ?
Why would use either best or reasonable endeavours to require repayment of monies?The borrower should have a primary obligation to pay you £X to an agreed repayment schedule. Not sure why you'd allow them any leeway. What security do you have in the event they fail to pay?
Breadvan72 said:
Is a law firm not a business? Anyway, a good commercial lawyer gets to know how businesses work, especially his or her clients' businesses.
Its a business yes but it doesn't have business men in it, ie they see things as B&W when sometimes a softer approach gets more return. ie don't scare the s
t out of the other party but still protect myself would not necessarily occur to a legal eagle - you may not agree but I have found it quite often at all levels. johnfm said:
DSLiverpool said:
I am financing a import consignment, they have a customer, he has paid 50% to the company (not me or my company) and will pay the balance on delivery, I want the company I am lending to repay me asap once they get paid. I was using best endeavour or within x weeks of sale - good enough ?
Why would use either best or reasonable endeavours to require repayment of monies?The borrower should have a primary obligation to pay you £X to an agreed repayment schedule. Not sure why you'd allow them any leeway. What security do you have in the event they fail to pay?
There isnt a great deal of difference between "best"/"reasonable"/"all reasonable" endeavors obligations in most likely circumstances.
Why not just require them to do the thing as soon as reasonably practicable and, in any event, by x date?
You will never enforce the first part of the obligation, so it's all a bit pointless, though.
Why not just require them to do the thing as soon as reasonably practicable and, in any event, by x date?
You will never enforce the first part of the obligation, so it's all a bit pointless, though.
DSLiverpool said:
I just like to hear it from the forum, I do have quite expensive advice however I am mindful that professional help can still miss things.
This is the start of a hopefully fruitful relationship and I dont want to come over too heavy on the young lads doing the work, I am comfortable on "best endeavour" with a maximum time of x days after payment. They have 50% up front, the balance on the day of delivery (before off loading to the end user and after samples seen) the ONLY thing that I see causing an issue is if the product is gash on delivery (as per the "Chinese risk") and as such this is a relatively small investment I am prepared to risk. (in PH terms a 2003 Volvo V70 value).
I just wanted the best of those two terms used and will use "best" as advised - thanks chaps
So, what happens if the customer rejects the goods? This is the start of a hopefully fruitful relationship and I dont want to come over too heavy on the young lads doing the work, I am comfortable on "best endeavour" with a maximum time of x days after payment. They have 50% up front, the balance on the day of delivery (before off loading to the end user and after samples seen) the ONLY thing that I see causing an issue is if the product is gash on delivery (as per the "Chinese risk") and as such this is a relatively small investment I am prepared to risk. (in PH terms a 2003 Volvo V70 value).
I just wanted the best of those two terms used and will use "best" as advised - thanks chaps
DSLiverpool said:
I am financing a import consignment, they have a customer, he has paid 50% to the company (not me or my company) and will pay the balance on delivery, I want the company I am lending to repay me asap once they get paid. I was using best endeavour or within x weeks of sale - good enough ?
Not even close.They've got the money in the bank now, and not much more. Doesn't "asap" mean it has to be paid now, even if that leaves them short for the wage bill or the rent or...?
They can't pay after x weeks, are you asking for management accounts on a regular basis to enforce "possible"? Or just accepting their word?
What if the consignment isn't completely sold? A small fraction - say 5% - sits in their warehouse, gently going dusty and being forgotten. They don't have to pay you a penny until x weeks after that gets sold, right?
johnfm said:
So, what happens if the customer rejects the goods?
They are eBay sellable but it's something the end user has used for a while, the lads have designed a better version.It's as safe a deal as possible but I'm prepared to lose the investment if it goes pear shaped - risk is risk
DSLiverpool said:
Breadvan72 said:
Is a law firm not a business? Anyway, a good commercial lawyer gets to know how businesses work, especially his or her clients' businesses.
Its a business yes but it doesn't have business men in it, ie they see things as B&W when sometimes a softer approach gets more return. ie don't scare the st out of the other party but still protect myself would not necessarily occur to a legal eagle - you may not agree but I have found it quite often at all levels. Edited by anonymous-user on Wednesday 11th November 14:21
DSLiverpool said:
johnfm said:
So, what happens if the customer rejects the goods?
They are eBay sellable but it's something the end user has used for a while, the lads have designed a better version.It's as safe a deal as possible but I'm prepared to lose the investment if it goes pear shaped - risk is risk
But BV is close to the mark here.
A payment obligation shouldn't involve any endeavours at all. Surely the 'lads' don't supply goods and transfer title to customer until balancing payment is made in cleared funds. At that point the 'lads' can pay you. No endeavours required.
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