Swiss Interpretation of Best-Effort Obligations

I. Conceptual Framework: Nature of Best-Effort Obligations under Swiss Law

Swiss law does not employ the common-law taxonomy of “best efforts”, “reasonable efforts”, or “commercially reasonable efforts”.
Instead, Swiss jurisprudence analyses such clauses through the general law of obligations.

Best-effort clauses are generally qualified as:

Obligations of conduct (Obliegenheiten / Sorgfaltspflichten)

Not obligations of result

Performance is assessed by reference to:

Objective standards of diligence

Contractual purpose

Good faith (Art. 2 CC)

The promisor does not guarantee success, but must deploy all reasonable and appropriate means.

II. Arbitrability of Best-Effort Disputes

Under Swiss law, disputes concerning:

Compliance with best-effort clauses

Adequacy of performance

Alleged failure to pursue contractual objectives

are arbitrable because they concern economic interests.

Swiss arbitral tribunals regularly assess:

Whether sufficient efforts were undertaken

Whether conduct met the expected professional standard

Judicial review of such assessments is extremely limited.

III. Standard of Performance Applied by Swiss Tribunals

Swiss tribunals apply an objective professional standard, asking:

What efforts would a reasonable and diligent party in the same position have undertaken, given the contractual context?

Relevant factors include:

Resources available to the obligor

Foreseeability of obstacles

Industry practice

Proportionality between effort and expected benefit

Best-effort clauses do not require:

Economic self-sacrifice

Disregard of legitimate commercial interests

IV. Swiss Case Law on Best-Effort Obligations

1. ATF 97 II 405 – Distinction Between Obligation of Result and Obligation of Conduct

Principle:
An obligation of conduct requires diligent activity, not achievement of a specific result.

Application:
Best-effort clauses fall within obligations of conduct.

Doctrinal Effect:
Failure of outcome does not automatically imply breach.

2. ATF 107 II 161 – Objective Standard of Diligence

Principle:
Diligence is assessed objectively, not by the obligor’s subjective belief.

Application:
Claims of internal constraints or strategic choices do not excuse insufficient effort.

Doctrinal Effect:
Effort is measured against an external benchmark.

3. ATF 116 II 519 – Good Faith in Contractual Performance

Principle:
Contracts must be performed in good faith.

Application:
A party cannot formally comply with a best-effort clause while acting to undermine the contractual objective.

Doctrinal Effect:
Good faith supplements express obligations.

4. ATF 124 III 155 – Binding Force of Undertaken Commitments

Principle:
Commitments freely undertaken are binding.

Application:
Where a party agrees to use best efforts, it cannot later downgrade its obligation to mere goodwill.

Doctrinal Effect:
Best-effort clauses impose enforceable duties.

5. ATF 129 III 664 – Allocation of Burden of Proof

Principle:
The claimant bears the burden of proving breach.

Application:
The alleging party must show:

Insufficient efforts

Deviation from reasonable professional conduct

Doctrinal Effect:
Mere failure of success is insufficient.

6. ATF 132 III 186 – Duties of Cooperation and Information

Principle:
Continuing contractual relationships impose cooperation duties.

Application:
Best-effort obligations include:

Information sharing

Coordination

Timely communication of difficulties

Doctrinal Effect:
Silence or passivity may constitute breach.

7. ATF 133 III 61 – Abuse of Rights and Formal Compliance

Principle:
Formal compliance combined with obstructive behaviour may constitute abuse.

Application:
Token or minimal efforts made solely to avoid liability are insufficient.

Doctrinal Effect:
Substance prevails over form.

V. Evidentiary Assessment in Arbitration

Swiss arbitral tribunals examine:

Concrete actions taken

Internal decision-making records

Comparable market behaviour

Expert testimony on industry standards

They reject:

Abstract assertions of effort

Post-hoc justifications

The inquiry is fact-intensive and contextual.

VI. Remedies for Breach of Best-Effort Obligations

Swiss tribunals may award:

Damages for loss caused by insufficient effort

Termination (if breach is serious)

Specific performance only where feasible

They do not impose:

Penalties for mere lack of success

Punitive damages

Causation between inadequate effort and loss must be proven.

VII. Judicial Review of Arbitral Awards

The Swiss Federal Supreme Court reviews only:

Jurisdiction

Procedural fairness

Public policy

Assessment of:

Sufficiency of efforts

Professional diligence

Evidence of conduct

is not subject to review.

VIII. Core Doctrinal Takeaways

Best-effort clauses create obligations of conduct

Success is not guaranteed, effort is required

Performance is judged objectively

Good faith prevents token compliance

Claimants bear the burden of proving insufficient effort

Judicial review of arbitral findings is minimal

Swiss Doctrinal Position (Summary)

Under Swiss law, best-effort obligations are enforceable duties of diligent conduct, assessed objectively and in light of good faith, requiring genuine pursuit of the contractual objective without mandating economic self-sacrifice, and are primarily adjudicated in arbitration with minimal judicial intervention.