Developments in contract: endeavours clauses

The principles

An obligation to use “best” or “all reasonable” endeavours to achieve something is not regarded as too uncertain to be enforceable. This is subject, however, to the object of the endeavours being capable of being ascertained with sufficient certainty. The meaning of such an obligation will be determined by the contract as a whole and there is limited scope to extrapolate from other cases.

Generally, "best endeavours" is the most onerous of these provisions with "reasonable endeavours" being the least burdensome and "all reasonable endeavours" coming somewhere between the two. However, in Jet2.com v Blackpool Airport, the High Court Judge noted that it was "common ground that there is no difference between best and all reasonable endeavours" and neither he nor the Court of Appeal questioned this interpretation.

An obligation to use “best endeavours” does not generally require a party to act contrary to its own commercial interests, though the extent to which a party may have regard to its own commercial interests depends upon the nature and terms of the contract in question. An endeavours clause is far more likely to be enforceable where the nature of the endeavours is clear, and particularly where a minimum level of action is specified.

Recent developments

In Bristol Rovers (1883) Ltd v Sainsbury’s Supermarkets Ltd the sale of a football stadium to a supermarket was conditional upon planning consent being granted that allowed deliveries between certain imes of day. Planning consent was granted that did not allow such deliveries and Sainsbury’s appealed unsuccessfully. It then mounted a second appeal but abandoned this on advice of only a 55% chance of success, after which it terminated the contract.

The Court of Appeal had to consider whether abandoning the second appeal was in breach of an obligation to use “all reasonable endeavours” to procure the grant of suitable planning consent. The Court found that the obligation was limited by an express term that no appeal against a planning decision had to be brought where counsel rated the chances of success at less than 60%. The potential breadth of the clause did not overcome this express limitation on what Sainsbury’s had to do.

What this means

• Only use “endeavours” clauses where there is no other way of phrasing the obligation, as they are always inherently uncertain in scope.
• Be aware of the difference between “reasonable endeavours” and “best endeavours”, but remember the limitations of both: neither is likely to oblige a party to act against its own commercial interests.
• Be as specific as possible as to the minimum level of action required by the party obliged to use endeavours, to bring as much certainty as possible to the clause. Ask yourself whether certain actions would fall within or outside the scope of the obligation and consider whether these should be express obligations.