CKB & Assoc., Inc. v. Moore McCormack Petroleum, Inc – Case Brief Summary (Texas)

In CKB & Assoc., Inc. v. Moore McCormack Petroleum, Inc., 809 S.W.2d 577 (Tex. App.--Dallas 1991, writ denied), CKB had agreed to use its best efforts to refine crude oil into specific volumes of refined products, as set out in the agreement in a schedule specifying percentages of total refinery output for each product. Id. at 578.

Instead of refining the crude oil to produce the quantities specified in the contract, CKB operated the refinery to produce the highest dollar yield on the crude. Id. at 579, 582.

Moore McCormack sued CKB for breach of contract, and the trial court rendered summary judgment in Moore McCormack's favor. Id. at 580. CKB appealed. Id.

The Court described the provision for "best efforts" in a contract as "a nebulous standard. . . . Under some circumstances, a party could use best efforts to achieve a contractual goal and fall well short. Under different circumstances, an effort well short of one's best may suffice to hit a target." See id. at 581.

Thus, that court reasoned, "To be enforceable, a best efforts contract must set some kind of goal or guideline against which best efforts may be measured. Id. at 581-82.

The court concluded that when sufficient guidelines exist, a party that performs within the guidelines fulfills the contract regardless of the quality of its efforts. Id. at 582.

Only when a party misses the guidelines would a court measure the quality of its efforts "by the circumstances of the case . . . and by comparing the party's performance with that of an average, prudent, comparable operator." Id.

Ultimately, the court affirmed the summary judgment against CKB because it concluded that CKB made no efforts to meet the production standards specified in the contract, stating: "As a matter of law, no efforts cannot be best efforts." Id.