Sergio Garcia Long
580 California St., Suite 400
San Francisco, CA, 94104
Role of Effort in Contract Performance: A Comparative Analysis
2025, Tulane Journal of International and Comparative Law
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Abstract
The role of a contracting party's efforts-as in working, trying, or exerting in the performance of a contract is an understudied and undertheorized issue in contract law. Often, parties incorporate various efforts provisions in their contracts by setting benchmark requirements. The duty of best efforts is implied in exclusive agency contracts in order to align the interests ofthe principal and the agent. How and when best or reasonable efforts are implied across legal systems is one focus ofthis Article. More broadly, do courts see the level of effort of a party as a factor in determining breach and setting damages in a broader range of contracts? In sum, the Article explores the role of efforts, or a lack thereof made by the parties as both an express and implied duty of contract law across legal systems. A comparative analysis of Anglo-American, Chinese, Latin American, and French law is undertaken.
References (28)
- See Miller, infra note 214 and accompanying text.
- Farnsworth, supra note 98, at 7-8; Emily Houh, The Doctrine of Good Faith in Contract Law: A (Nearly) Empty Vessel?, 1 UTAH L. REV. 1, 18 (2005).
- Garcia Long, supra note 70, at 142-149 (2021).
- See Article 1337 Civil Code of Italy ("The parties, in the conduct of negotiations and in the formation of the contract, must behave in accordance with good faith."); Article 1362 of the Civil Code of Peru ("Contracts must be negotiated, entered into and performed according to the rules of good faith and common intention of the parties."); and Article 961 Civil and Commercial Code of Argentina ("Contracts must be entered into, interpreted and performed in good faith.").
- Article 1134 states that: "Agreements lawfully entered into take the place of the law for those who have made them. They may be revoked only by mutual consent, or for causes authorized by law. They must be performed in good faith." 115. See Sergio Garcia Long, Towards a Formalistic Approach of Good Faith in Comparative Contract Law, 35 EUR. BUS. L. REV. (2024).
- See Article 45 Civil Code of Chile ("an unforeseen event that cannot be resisted, such as a shipwreck, an earthquake, the seizure of enemies, acts of authority exercised by a public official"); Article 1272 Civil Code of Venezuela ("an act of God orforce majeure"); Article 1315
- Civil Code of Peru ("Act of God or force majeure consisting of an extraordinary, unforeseeable and irresistible event"); Article 1730 Civil and Commercial Code of Argentina ("act of God or force majeure that could not be foreseen or, having been foreseen, could not be avoided"). 2025 ]
- LARRY A. DIMATTEO, The Enduring Legacy of Wood v. Lucy, Lady Duff-Gordon Cardozo, Anti-Formalism, and the Fiction of Non-Interventionism, 28 PACE U. L. REv. 315 (2007).
- Referring to the English law principle used in the interpretation of contracts which holds that when there are two plausible interpretations of a contract term the court should choose the one that makes the most common sense for business. See Nord Naphtha Limited v. New Steam Trading AG [2021] EWCA Civ 1829 (in which efforts were taken to avoid an interpretation that would "offend business common sense and ordinary common sense"); Rainy Sky SA & Orsd v. Kookmin Bank [2011] UKSC 50 (noting a preference for "the construction which is consistent with business common sense").
- Farnsworth, supra note 214, Cf. Restatement (Second) of Contracts § 374 (1981). 217. U.C.C. § 2-306(2).
- 601 F.2d at 613 n.7, quoting Arnold Productions, Inc. v. Favorite Films Corp., 176 F. Supp. 862, 866 (S.D.N.Y. 1959). See also, Victor P. Goldberg, Great Contracts Cases: In Search ofBest Efforts: Reinterpreting Bloor v. Falstaff, 44 ST. Louis U. L.J. 1465, 1465 (2000) (noting that efforts can only be defined contextually).
- NCNB Nat'l Bank of N.C. v. Bridgewater Steam Power, 740 F. Supp. 1140 (W.D.N.C. 1990).
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- Intermediate People's Court, SPC GAZETTE, Issue 2, 2015.
- Vacuum Concrete Corp. v. Am. Mach & Foundry Co., 321 F. Supp. 771 (S.D.N.Y. 1971). 228. Id at 773.
- Relational contract theory suggests that the express terms of a relational contract act as an outline, while implied terms and understandings determine the conduct of the parties. See, Ian Macneil, Contracts: Adjustment of Long-Term Economic Relations Under Classical, Neoclassical, andRelational Contract Law, 72 NW U. L. REV. 854 (1978);
- David Campbell, Good Faith and the Ubiquity ofthe Relational' Contract, 77 MODERN L. REV. 475 (2014). 2025 ]
- "Parties may agree to use specific levels of effort when satisfying their responsibilities [such as best efforts clauses] but the agreements rarely delineate the exact parameters of performance that will satisfy the requirement." Zachary Miller, Best Efforts? Differing Judicial Interpretations ofa Familiar Term, 48 ARIZ. L. REV. 615, 615 (2006).
- Bloorv. Falstaff Brewing Corp., 454 F. Supp. 258, 267 (S.D.N.Y. 1978) (to the extent of its total capabilities).
- Harris v. McPherson, 155 A. 723 (Conn. 1922).
- Nieschburg v. Nothern, 165 P. 857 (Kan. 1917).
- See discussion supra subsections V.C-D.
- See discussion supra subsections II.D and II.E. (France) and subsections III.B-D (Latin America).
- See discussion supra subsection IV.D. 262. Id.
- See Cameron Ross & Sam White, Recent Judicial Consideration of Endeavours Clauses in Australia and Singapore, 9 CONSTR. L. INT'L 9 (2014);
- TianYi Tan, The Interpretation 2025 ]