Endeavours Bingo: Why 'Best' and 'Reasonable' Are Still the Most Litigated Words in British Contracts

A clause designed to postpone the argument

Every commercial lawyer has seen it. Somewhere near the end of a long agreement, in a clause that nobody negotiated with any enthusiasm, sits a sentence: the supplier shall use its best endeavours to achieve the launch date; the landlord shall use all reasonable endeavours to obtain planning permission; the buyer shall use reasonable endeavours to procure the condition is satisfied.

These words are not the product of precision. They are the product of compromise. One side wanted an absolute obligation and the other wanted none at all, and so the drafting committee produced a phrase that sounds like a promise while conceding as little as possible. The parties sign, and the argument is simply postponed until the day it matters.

In our view, that is the central point about endeavours clauses: they are not really an allocation of obligation at all, but an agreement to argue later about what was agreed.

The three formulations, in theory

The conventional hierarchy runs as follows.

• Reasonable endeavours is the lowest standard. It asks whether the party took a commercially sensible step towards the objective, having regard to its own interests. It does not require a party to act against its own commercial interest.
• All reasonable endeavours sits in the middle. The prevailing view is that it requires the party to exhaust the reasonable courses of action available, but it stops short of requiring sacrifice of its own interests. It may require the party to take at least one course that is commercially disadvantageous.
• Best endeavours is the highest. It obliges the party to do everything it reasonably can, and the standard is objective rather than subjective: wanting to help is not the test, and the party's own preference for a different course is not an answer.

That is the theory. The practice is messier.

What the courts have actually done

The line of authority is well known to litigators and largely unknown to the businesses that sign these clauses. The classic statement on best endeavours remains the 1980 decision in IBM United Kingdom Ltd v Rockware Glass Ltd, which treated the obligation as requiring the party to take all those steps which a reasonable and prudent person acting in the relevant party's position would take. Rhodia International Holdings Ltd v Huntsman International LLC (2007) suggested that an obligation of all reasonable endeavours required the party to take at least one reasonable course of action, but not every possible one. Yewbelle Ltd v London Green Developments Ltd (2006) went further in the same direction, accepting that a party might take one reasonable route where several existed.

The most instructive case for commercial parties is Jet2.com Ltd v Blackpool Airport Ltd (2012). The airport had undertaken to use its best endeavours to promote the airline's use of the airport. The Court of Appeal held that the obligation was not empty, and that it constrained the airport's freedom to act purely in its own commercial interest. The drafting was vague; the consequence was a substantial damages claim.

And in Astor Management AG v Atalaya Mining plc (2017), the court considered an obligation to use all reasonable endeavours to obtain a senior debt facility, holding that such a clause requires the party to act in good faith and not to prefer its own interests where the obligation bites.

What emerges is not a rule. It is a series of fact-specific determinations in which the outcome turned on evidence of what was commercially available, what the party knew, and what it chose to do. Two contracts with identical wording can produce opposite results.

Why the argument is rarely about meaning

Here is the uncomfortable truth for anyone hoping for a definitive ruling: the meaning is not really the battleground. The battleground is evidence and cost.

A claimant alleging breach of a best endeavours obligation must show what steps were available and were not taken. That involves disclosure of board minutes, internal correspondence, alternative costings and market options. It is expensive, it is intrusive, and it is deeply uncertain. A defendant, meanwhile, must justify its conduct against a standard that nobody defined at the outset. Both sides are arguing about a counterfactual.

The result is that most of these disputes settle — not because the law is clear, but because litigating it is not worth the money. That is a poor outcome for the party with the genuine grievance and a poor outcome for the party that behaved properly.

Nor is there much prospect of a clean resolution from the Supreme Court. The phrase has been in commercial use for over a century, and the courts have consistently refused to impose a fixed meaning on it. They are, in effect, telling the market to draft better.

Three drafting habits that remove the argument

The market has, slowly, begun to listen. If you are negotiating a clause of this kind, consider the following.

Define the steps, not the sentiment. Instead of promising best endeavours to obtain consent, list what is required: submitting an application within ten business days, responding to requests for further information within five, escalating to a named contact at the counterparty, and providing monthly written updates. A defined obligation is enforceable. A sentiment is not.

Address cost expressly. Say whether the party is required to incur expenditure, and if so up to what figure, and whether it must act against its own commercial interest. Much of the Jet2 reasoning would have been unnecessary had the parties written a sentence about who was paying.

State the consequence of failure. If the objective is not achieved, does the counterparty have a claim for damages, a right to terminate, a right to a price adjustment, or nothing at all? Quite often the parties discover, at the worst possible moment, that the endeavours clause sits alongside an entire agreement clause and a statement that time is not of the essence, and does almost nothing.

A closing observation

Endeavours clauses survive because they allow parties who do not trust each other to reach agreement without confronting the disagreement. That is a legitimate commercial function.

But it is a function with a price. The price is paid later, in correspondence, in disclosure, in mediations and occasionally in the Technology and Construction Court. Where the obligation genuinely matters — a condition precedent, a planning consent, an exit route — it deserves an afternoon of drafting rather than a phrase borrowed from a precedent. The parties who spend that afternoon rarely find themselves litigating what "best" means, because they never have to.