Last edited 24 Nov 2014

Best endeavours v reasonable endeavours

Many construction industry practitioners will have been confronted with a contract which requires the parties to use 'best' or 'reasonable' endeavours in performing obligations under the contract. This apparently minor difference however presents a real risk to a party if they are unaware of the difference in legal interpretation between the two terms.

Evidently an obligation to use 'best endeavours' implies a higher degree of commitment to perform a particular task when compared to 'reasonable endeavours' but, as is often the case, it is only when a contract dispute arises and Court proceedings follow that the reality of the difference becomes apparent.

There are no clear definitions of these terms upon which reliance can be made but case law has held that best endeavours means, amongst other things:

To leave no stone unturned.
To do what is reasonably to be expected in the circumstances.
Not to do anything that will jeopardise the commercial interests of the obligor.

An immediate and obvious difficulty is that the word “reasonably” appears in a definition of 'best' endeavours. Furthermore, case law has also used similar language in defining reasonable endeavours.

Behind these definitions lies an expectation of what might be done to ensure that these obligations are met.

In the case of best endeavours it may be the case that a party has to commit extra resources or spend additional funds in order to meet the obligation, even to the extent that it is commercially damaging to the party concerned. Where the obligation is reasonable it is unlikely that this degree of obligation would be applied by the Courts.

And when it comes to testing these definitions in Court a subjective approach is adopted for best endeavours whilst it is an objective one for reasonable endeavours.

For the purposes of the layman, however, one can point to certain more simple facts:

Reasonable endeavours will be less onerous than best endeavours.
If a contract sets out specific steps to be taken as part of a reasonable obligation, ensure that these steps are indeed carried out. This is regardless of commercial considerations.

This article was created by: --Martinc 14:11, 22 November 2014 (UTC)