Best Or Reasonable Endeavours?

We have all seen 'endeavours' clauses in contracts where one of the parties is expected to do a bit more than to 'try' and achieve a particular objective.

Why are endeavour clauses important?

If a party to a contract fails to achieve a particular objective, such as to obtain planning permission or build a building by a particular date, then the agreement may be terminated or there might be a potential damages claim. If getting the desired result is outside his control, then the obliging party usually says he will use his 'best' or 'reasonable' endeavours.

The problem is that there is no legal or practical definition of exactly what constitutes best or reasonable endeavours and it is difficult to know what steps should be taken to comply with your obligations. The recent High Court case of Jet2.com v Blackpool Airport Ltd [2011] EWCH 1529 considered an obligation to use 'all reasonable endeavours' but it has done little to remove this uncertainty.

Best endeavours or reasonable endeavours?

There is a range of endeavours clauses with 'best endeavours' requiring more effort than 'reasonable endeavours' and 'all reasonable endeavours' requiring something in between. There are also some lesser used phrases such as: 'commercially reasonable endeavours', 'reasonable commercial endeavours' or even 'utmost endeavours' which are even more unclear.

The meaning of an endeavours clause is assessed at the time the contract is made and depends on the commercial context and intentions of the parties.

The satisfaction of the clause is assessed by reference to the facts at the time of performance: what did the performing party do to meet its obligations, and was this sufficient?

This means that the expression will not always mean the same thing and depends on the facts of a particular case – which does little to help us anticipate what is sufficient or not in each situation.

The ruling in Jet2.Com v Blackpool Airport

The Jet2.com case involved a 15 year contract between Blackpool Airport Ltd (BAL) and a low cost airline, Jet2.com Ltd. BAL was required to "use all reasonable endeavours to provide a low cost base to facilitate Jet2.com's low cost pricing". The contract did not mention operating hours. The airport was open from 6am-8pm in summer, and 7am-9pm in winter, but for the first four years of the contract the airline was allowed to arrive and depart outside these hours while the airport ran at a loss. When the airport tried to improve profitability by...