Is there really any difference between the terms “best efforts” and “reasonable commercial efforts” when used in contracts? Yes. Under certain states’ common law, “best efforts” may require the party agreeing to use “best efforts” to come out of pocket and spend money to make a promise happen. By contrast, “reasonable commercial efforts” are considered a step below that and do not normally require a party to spend monies. The difference between the terms could mean whether you are in breach of an agreement or not, and responsible for the other ... Read More »
Archives for January 2026
WHY IS A LETTER OF INTENT IMPORTANT IF IT IS TYPICALLY NON-BINDING?
Deal points in a Letter of Intent are typically non-binding; however, they frame the proposed deal, and it can be difficult to re-negotiate major points. For example, you should not “agree” in an LOI to structure the acquisition as an asset sale, or a stock sale with a 338 (h)(10) election, until you discuss the tax effects of those choices with your CPA. Picking the wrong structure could result in your paying much higher taxes, and the other party will be reluctant to surrender any tax advantage they have gained. The amount a seller will ... Read More »