Under canada`s Common Law, all contracts between a bank and its customers involve the bank`s tacit duty to exercise reasonable care and skill in the performance of its banking services5.5 The definition of the standard for the management of the “appropriate banker” is a contextual exercise and the court will take into account the facts relating to both the bank`s offending actions in the actual case and the the bank`s offending actions. , as well as evidence of the industrial standards and practices of other bankers in the same context.6 “The legal meaning of a reasonable period of time must be considered at the time of the contract, when what is in fact appropriate will inevitably have to be assessed on the basis of the circumstances at the time of the first exercise of the law (or on the date on which the undertaking may be exercised) under the overall contract.” A lender`s right of approval is usually found in a financing document. It is important for a lender to understand the impact of the adequacy standard and other standards that can be applied to its obligations. If a party seems to be trying to get rich or ask for something that real-world people simply do not approve of, that will probably be unreasonable. If people demand the fair value of their work on terms that are normally accepted when they are negotiated, that is probably reasonable. … A “reasonable time” has long elapsed when the CSA claimed to exercise its right to terminate. Let`s think about what it means to be reasonable. Black`s Law Dictionary is a definition “fair, fair or moderate in the circumstances.” It`s no surprise, but notice in particular “under the circumstances.” Determining whether someone has behaved properly is an objective measure – the circumstances, not the actor`s intent, are taken into account. Frequent appearances in many contracts are variations in the phrase of reasonable efforts. If a contracting party cannot or will not commit to doing something, it could argue that it will make its reasonable efforts instead. Surprisingly, there is no simple judicial interpretation of this sentence, although it is in such general use. The courts have said that this sentence must always be interpreted by referring to its terms, the other provisions of the agreement and the economic context.

In other words, it is not just a matter of relying on judicial precedent to determine its importance. They must also consider how the economic environment could change over time if an appropriate commitment is maintained throughout the contract. What would have been reasonable on the first day could well move from those five years to a long-term agreement. To mitigate this uncertainty, it may be very useful to define precisely what the parties think when formulations such as reasonable efforts, all reasonable efforts and the best efforts are used in an agreement. This will significantly limit the scope for argument in the event of future litigation. In particular, it might be useful to know whether the party making the commitment should be obliged to act in one way or another to its own economic detriment if it meets an appropriate obligation. Does it have the right to protect its own interests and to allow that to influence its behaviour? It may also be helpful to indicate how long it must continue to strive to meet the commitment and the extent to which it is required to keep the other party informed of its work. If it abandons reasonable language, it would likely put the ceding party in a bad position, as it is not required to perform the task without the conditions being qualified.