An important term to a commercial contract which is often overlooked is the term relating to the level of effort required from a party in fulfilling its obligations under the contract. While good faith will always be implied in commercial contracts, the issue of whether sufficient “effort” was made by a party to fulfill an obligation arises when such party has failed to fulfill the obligation in question. The question is usually: how much effort was required? “best effort”? “reasonable effort”? “commercially reasonable effort”? “best endeavour”? etc. Unless the relevant level of effort required is adequately defined in the relevant contract, it is usually difficult, under South African law, to ascertain with certainty what the parties intended.

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Article prepared by: Lumka Dlukulu, Candidate attorney: Corporate & Commercial Department, Adams & Adams
Article checked by: Michael Gwala, Partner: Corporate & Commercial Department