California best efforts contract provision only requires reasonable diligence. The promisor is not a fiduciary.


In California contracts sometimes a party is obligated to use "best efforts" to accomplish a goal of the contract. For example, a contract to buy real estate may be subject to a condition to obtain financing. In such a case, the implied covenant of good faith requires the buyer to exert their best efforts to satisfy the condition. Or, the actual requirement may be in the contract, such as for a holder of water rights to use "best efforts" to maintain the level of water in a reservoir. California courts have never defined best efforts, but look to the specific facts of each case to determine if best efforts were actually made. A party with such an issue is well advised to consult with a real estate and business attorney to determine how far their efforts must extend. A property owner's associations in Modoc County recently was disappointed that a best efforts provision did not make the other party a fiduciary.

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