Best Endeavours

Author:Mr John O'Riordan
Profession:Dillon Eustace

The terms "best endeavours", "reasonable endeavours" and "all reasonable endeavours" are commonly used by solicitors in the drafting of agreements and contracts. Clearly, when making use of these terms it is important to have a clear understanding of their precise meaning and to be aware of the obligations their inclusion place on clients.

Best Endeavours

The inclusion of the term best endeavours in a clause originally placed an onus on the obliged party to, "broadly speaking, leave no stone unturned."

This very onerous obligation has been lessened somewhat over the years to allow for the concept of standards of reasonableness to be introduced. Whilst the obligation no longer requires someone to go as far as above, what is required is that a person must do "all that a reasonable person reasonably could do in the circumstances."

In other words, a party must take all steps in their power which "are capable of producing the desired result..." and they must take all the steps a reasonable person "acting in their own interest and desiring to achieve that result would take."

An obligation to use best endeavours probably requires a party to act honestly and reasonably and to make a positive effort to perform the relevant obligation.

In the case of a company the required standard is that of a "reasonable and prudent board of directors, acting properly in the interest of their company and applying their minds to their contractual obligations."

This obligation does not extend to a situation where a company should put itself at risk of financial ruin to fulfil its obligation.

It does seem clear however, from the recent decision of Ltd v Blackpool Airport Ltd that a company should carry out such actions that are commercially practicable and incur any reasonable associated cost in order to fulfil its responsibilities.

In this case, the parties had entered into a 15 year contract which included an obligation on both parties to cooperate and to use "their best endeavours to promote's low cost services from Blackpool Airport."

The Court was tasked with deciding whether Blackpool Airport was under an implied obligation to accept flights from outside the airport's standard operating hours, when there was no express term requiring this, as it would damage the airport's commercial interests if they had to do so.

The Court found that the inclusion of the best endeavours wording was seen as Blackpool Airport accepting a risk that there...

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