On January 8, 2026, the First Department issued a decision in Yolanda Mgt. Corp. v. MicroAlgo, Inc., 2026 NY Slip Op. 00072, holding that a contractual obligation to use best efforts was not unenforceably vague, explaining:
Plaintiff sufficiently stated a claim for breach of contract by alleging that defendant breached the parties’ Registration Rights Agreement (RRA) by failing to file a registration statement with the Securities and Exchange Commission despite plaintiff’s written demand that it do so. Contrary to defendant’s position, its obligation to file the registration statement is enforceable despite the “best efforts” language of the RRA, as the RRA provided sufficiently objective criteria by which to measure defendant’s performance of its obligation. Under the terms of the RRA, once defendant received a demand for registration, it was required to use its best efforts to prepare and file a registration statement for plaintiff’s shares “as expeditiously as possible,” to cause the registration to become effective and to keep it effective until the securities were sold, or to remove the restrictive legend on the shares so that they could be sold on the public market. Further, the requirement to act “expeditiously” is modified by a provision allowing defendant to “defer any Demand Registration for up to thirty (30) days” in any 365-day period. These provisions provide objective standards as to the timing of defendant’s obligation to file a registration statement.
(Internal citations omitted).