The following Commercial practice note provides comprehensive and up to date legal information covering:
This Practice Note considers the terms ‘best endeavours’, ‘all reasonable endeavours’ and ‘reasonable endeavours’ that are frequently used in commercial agreements.
Contracting parties usually have a polarised approach to ‘endeavours’ terms, with one party seeking to impose the most onerous form of the obligation on the other party, and the other party trying to resist it. The final position is usually reached following considerable negotiation and often represents a compromise where one party has argued that it is not reasonable for it to be placed under an absolute obligation.
This Practice Note considers the relevant case law and the meanings that have been given to the terms:
all reasonable endeavours, and
It also provides guidance for commercial lawyers to consider when drafting and negotiating such obligations. See: Drafting endeavours clauses below.
The most onerous obligation which can be imposed in an agreement is an absolute obligation to do something. An example would be ‘the Seller will deliver the goods’, which will be breached if the obligation is not performed regardless of the reason (subject to other terms which may excuse performance, such as force majeure). Similarly, an obligation to ‘procure’ that something is done creates an absolute obligation on a party to make sure that it happens (Nearfield Ltd v Lincoln Nominees Ltd).
However, an absolute obligation
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