‘Best endeavours’ versus ‘reasonable endeavours’

18 April, 2011

The terms ‘best endeavours’ and ‘reasonable endeavours’ are frequently used in commercial contracts as a means of establishing the extent of a party’s contractual obligations. There are, however, no strict legal definitions for these terms, and it has largely been left to the courts to distinguish between the two. It is important to note that the use of either of the terms carries with it an inherent risk of non performance, since neither implies an absolute obligation on the obligor.

Recent case law has established that a spectrum of ‘endeavour’ clauses exists, placing ‘best endeavours’ at the top of the spectrum as the more onerous obligation, and ‘reasonable endeavours’ as the less burdensome clause although both forms of the clause will require some action/ attempt by the obligor.

The courts have indicated that an obligation to use reasonable endeavours to achieve an aim probably only requires a party to take one reasonable course, not all of them, whereas an obligation to use best endeavours probably requires a party to take all the reasonable courses he can. Furthermore, where there is an obligation to use ‘reasonable endeavours’ the obligor is able to give greater consideration to his own commercial circumstances and the likelihood of being able to satisfy the obligation.

As the courts have interpreted the meaning of ‘best’ and ‘reasonable’ endeavours in a number of different ways depending on the nature of the obligations to which they are attached, it is perhaps worth, when including ‘best’ or ‘reasonable’ endeavours clauses in a contract, considering whether any particular action ought to be taken by the obligor in a bid to satisfy the endeavoured obligation. This would provide further protection to the obligee because the recourse of breach of contract would certainly be available should the specific obligations not be adhered to.  An example of this would be stating that the obligor must use best endeavours to ensure that the client’s data is not lost, including by making a back-up copy of the data at the end of each day.

 

Reviewed in 2015