Best Endeavors Explained: Navigating Good Faith in Australian Finance

When you’re signing a finance contract in Australia—whether it’s a business loan, property deal, or supplier agreement—you may stumble upon the term “best endeavors.” While it sounds straightforward, this phrase can carry significant legal weight and impact your obligations. As 2025 brings new case law and evolving standards in contract enforcement, understanding what “best endeavors” means is more important than ever for protecting your interests.

What Does ‘Best Endeavors’ Actually Mean?

In the world of Australian finance and commercial contracts, “best endeavors” (or “best endeavours” in UK spelling) refers to a party’s obligation to take all reasonable steps to achieve a particular outcome. It’s more than simply “trying your best”—it requires proactive, sustained effort, sometimes even at significant personal or business expense.

• Example: If a lender agrees to use their best endeavors to approve a loan by a certain date, they must actively pursue all reasonable avenues to get it done—allocating resources, escalating internally, and not just waiting passively.

• Comparison: “Best endeavors” is often considered a higher standard than “reasonable endeavors,” which only requires doing what’s sensible, not necessarily exhausting all options.

The interpretation of these clauses can vary, and courts often look at the exact wording, context, and industry standards. In 2025, several high-profile cases have reaffirmed that “best endeavors” does not mean guaranteeing success, but it does mean making genuine, tangible efforts—even if it’s inconvenient or costly.

Why Are ‘Best Endeavors’ Clauses So Important in Finance?

Financial agreements often hinge on timing, approvals, and compliance. “Best endeavors” clauses are used to signal how hard each party must try to meet their commitments. This is especially relevant in:

• Commercial lending: Banks may use these clauses in loan settlements or refinancing deals, requiring both sides to push for timely paperwork, approvals, and payments.

• Property transactions: Buyers and sellers may be obligated to use their best endeavors to satisfy conditions precedent, such as obtaining development approvals or finance.

• Supplier agreements: Companies promising to deliver goods or services by a deadline may be held to a “best endeavors” standard, especially in critical supply chains.

As of 2025, regulatory scrutiny from ASIC and the ACCC has intensified around the clarity and enforceability of such clauses. Ambiguity can lead to costly disputes—so contracts increasingly spell out what specific actions are expected under a “best endeavors” obligation.

Real-World Scenarios and 2025 Legal Updates

Let’s look at how “best endeavors” is playing out in Australian finance right now:

• Case Study: SME Finance – In early 2025, a Victorian court ruled against a lender who claimed they had used their best endeavors to approve a business loan but had failed to escalate a critical document request. The court found the lender did not meet the clause’s high standard, costing them damages.

• Banking Royal Commission Fallout – Recent reforms have encouraged clearer contract language. The 2025 update to the Australian Consumer Law (ACL) requires financial firms to define what constitutes “best endeavors” in plain English for consumer contracts, reducing room for dispute.

• Renewable Energy Projects – As Australia accelerates solar and wind infrastructure, project financiers are increasingly required to use their best endeavors to secure permits and grid connections. Delays can trigger penalty clauses if “best endeavors” aren’t clearly demonstrated.

Given these developments, both businesses and individuals need to pay close attention to the language in their contracts. In a climate of heightened enforcement, being vague or passive can come back to bite you.

How to Protect Yourself When Negotiating a ‘Best Endeavors’ Clause

Whether you’re a borrower, lender, property buyer, or business owner, here are some practical steps for 2025:

• Get Specific: Define what actions will be required—such as timelines, resources, or steps to escalate if delays occur.

• Limit the Scope: Where possible, cap the obligation by specifying what is (and isn’t) considered reasonable, especially if external factors (like regulator decisions) could derail efforts.

• Document Everything: Keep records of your attempts to fulfill the obligation. Emails, phone logs, and meeting notes can make or break your case if things go south.

• Review Regularly: As regulations evolve, review existing contracts to ensure “best endeavors” clauses still reflect your intent and current legal standards.

Conclusion: Don’t Let Ambiguity Undermine Your Deal

“Best endeavors” is more than a feel-good phrase—it’s a powerful contractual tool that can shape your financial outcomes. With 2025 bringing increased regulatory attention and fresh legal precedents, Australians need to treat these clauses with care. Clarity, specificity, and good documentation are your best allies. Next time you’re reviewing a finance contract, don’t gloss over the fine print—make sure “best endeavors” truly works in your favour.