The good ship Endeavour

The inclusion of 'endeavours' clauses in contracts can create a great deal of uncertainty as to what is expected of the parties, writes Debra Kent.

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 refusing to accept scheduled flights outside its opening hours, the airline sued for breach of contract and won.

The parties agreed that ‘all reasonable endeavours’ in this case meant the same as ‘best endeavours’.

The judge ruled that BAL could not limit or abandon performance when it became commercially undesirable, particularly in such a sudden and unilateral way (Jet2.com was given just one week to adjust its schedules). The duty related to matters within BAL’s control and the argument that a duty to use all reasonable endeavours did not require a party to act against its own commercial interests was rejected. He refused to rule on what hours the airline should support for the remaining contract term, so the parties were still left with significant commercial uncertainty at the end of a long and expensive process.

Some practical considerations

Careful consideration and discussion of what is meant by an endeavours clause when the contract is drafted should reduce uncertainty and is preferable to litigation after the event. Some important practical considerations to make include:

• Any contract clause must be sufficiently certain if it is to be enforceable – therefore, make clear what obligation is to be performed and what will constitute performance.
• Consider stating expressly what is required for best or reasonable efforts: how much expenditure or commercial loss could be incurred (if any) and for how long; whether a party is expected to act in his own or another’s interests; whether specific steps such as legal action to secure performance by a third party should be taken; and how disputes will be resolved (for example by mediation prior to litigation).
• As a performing party, keep a record of what efforts are being made towards meeting an obligation and keep the other side informed, particularly if performance is at risk.

Debra Kent is a partner at Charles Russell. She can be contacted on 01483 252630 or by email at This email address is being protected from spambots. You need JavaScript enabled to view it..