The Endeavour Clause

This week Iwould like to talk to you about ‘reasonable endeavours’ and ‘best endeavours’. These expressions are increasingly creeping into contracts I am proof-reading. Actually, these little devils are getting to be as common as funny hats at an office crayfish party. This is most worrying as they are virtually getting ignored which neither should happen to a funny hat nor the legal statement to endeavour. The former could lose you friends; the latter could be expensive for clients.

‘Best endeavours’ isthe stronger of the two terms. As a result, it should be handled with considerable care as the Obligor may have to consider his own financial position, beyond the realms of the contract, in order to honour the obligation at hand. Case Law proclaims that one shall have to.”…take all those steps in its power which are capable of producing the desired results which a prudent and reasonable Obligor, acting in his own interest, would take.” (IBM UK Ltd v Rockware [1980]). Consequently, this may lead to an unplanned financial sacrifice in order to complete performance.

Moreover, ‘reasonable endeavours’(another term British lawyers like to test their Swedish counterparts with) implies that you do not have to sacrifice your own personal and commercial interest to guarantee performance of a contract or part of it.

However, where reasonableends and best starts is greyer than a Stockholm sky these days. Consequently, before accepting a reasonable endeavour clause study the rest of the contract wording as the concept of what is considered a reasonable endeavour may be hidden away behind some sophisticated language. Such an obligation may not be as easy to satisfy as would initially appear.

Watch out forthe trap! ‘Best endeavours’ may make your client pay through the nose and ‘reasonable endeavours’ may require more discussion on your part to define the level of the endeavour. One thing is for certain: never take either of them for granted as a set expression.

© Andrew Davies, Communicoach 2010