How hard should I try?28th September 2012
When accepting an obligation in a contract, or requiring the other side to fulfil one, should you or they be using “reasonable endeavours”, “best endeavours” or “all reasonable endeavours”? There are a few general guidelines as to what these phrases might mean so that you have a better idea as to the implications of each.
“Reasonable endeavours” is the least onerous of the obligations. A party must take reasonable steps to achieve the relevant goal and the party may take into account its own commercial interests in considering which route to take. It may also be obliged to incur some costs and/or start litigation.
“Best endeavours” is clearly more onerous. The party is not obliged to take steps which would bring about its bankruptcy or which would lead to the ruin of the company, for example, but it must exhaust a number of reasonable courses of action which could be taken in any given situation. By way of example, an obligation on one party to use best endeavours to obtain a planning permission would probably mean it is obliged to pursue an appeal (unless it was clear that there was little or no chance of success).
More recently we have seen reference to parties having to use “all reasonable endeavours”. The current view is that this obligation obliges the party to pursue more than one course of action to achieve its particular goal and the relevant party would not be entitled to abandon a contract simply because it no longer fits in with its commercial interests. The general view is that this obligation is closer to “best endeavours” than the simple “reasonable endeavours” requirement and could be seen as a “best endeavours” obligation by the back door.
In summary, it is acknowledged that all of these terms are imprecise and from time to time case law emerges which provides more or less clarity as to what they mean, but the above should give you some bench marks when considering whether or not to accept these terms in a contract.
020 7355 6025