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

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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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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© James J. Falcone, Law Office of James J. Falcone | Attorney Advertising

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