Israel Aerospace Industries (IAI) demanded that a client pay unpaid debts for helicopter parking and maintenance services. The client contended, inter alia, that it suffered damage due to a delay in the certification of IAI's technicians, claiming a breach of the agreement.
The Court accepted the main claim, rejected the counterclaim and held that the client must pay its debts to IAI in full as IAI was not negligent in fulfilling its obligations. A best-efforts obligation, unlike an obligation of result, imposes on the obligor a requirement not to act negligently, including the duty to exercise skill and take all reasonable measures to achieve the goal, but it does not guarantee the outcome itself. The burden to prove a breach of a best-efforts obligation rests on the party alleging the breach. When achieving the outcome depends on the approval of a third party (such as a governmental authority), the tendency is to classify the commitment as a best-efforts obligation. In this case, the agreement between the parties was on a best-efforts basis and IAI did not commit to a defined schedule and proved it took numerous active steps to advance the certification process with the civil aviation authority. The delays resulted from an extreme backlog at the authority and not from negligence by Israel Aerospace Industries and additionally, the client approved the disputed invoices and the payment framework in real time. Consequently, the claim was accepted and the counterclaim was rejected.