Endeavours in a contract

[GoSeigen]

Often contracts include "endeavours clauses" where a party agrees to use "reasonable endeavours" or "best endeavours" (or even "all reasonable endeavours") to achieve some object. The meaning of these terms and their distinction is discussed at length online, e.g. the guide linked on this page:

https://hsfnotes.com/litigation/2016/03/15/endeavours-obligations-how-hard-do-you-have-to-try/


What is harder to find is discussion about contracts using a different formulation to the above three standard phrases. So when a contract says "Party A shall endeavour to do X", what is the assumed standard of endeavour that should be construed? i.e. How have courts interpreted such vague/non-standard wording in case law? I have seen it suggested that a vague clause would be unenforcable, for example, but perhaps case law has determined a particular standard should be implied, i.e. either reasonable endeavours or best endeavours?


Could anyone either explain how a court would construe the wording "Party A shall endeavour to do X" in terms of the level of obligation assumed by party A, or point me to some online discussion of the issues and relevant case law?

Many thanks,


GS

[chas49]

Here's another link discussing the issue.

https://www.google.com/url?sa=t&source= ... ozt8hS3usJ

As with the link in the OP, it is mostly concerned with the 'usual triumvirate' of best, all reasonable and reasonable endeavours.

I think there is a case for concluding that an endeavours clause lacking one of the usual qualifiers (or something very similar) would be held to be unenforceable. The case law supports the argument that reasonable endeavours is the lowest in the hierarchy. So just "endeavour to" must fail to reach the hurdle of precision required for it to be justiciable.

It also seems that the context of the endeavours clause must be considered. What is it that the obligee must endeavour to achieve, and is that sufficiently precise as to render it justiciable?

Just my thoughts and I can't point you to the requested "online discussion of the issues and relevant case law". Sorry.

[tjh290633]

It has been fairly normal for contracts to include clauses like "Frustration" or "Termination", both of which can come into play when "Best endeavours" have failed. Ultimately "Arbitration" is the clause to resolve the issue.

I suppose that the situation you are contemplating is that where best endeavours have led to an outcome which is not that envisaged. Let's say the contract specified that best endeavours shall be used to obtain a Mercedes, but all that could be got was a Trabant. Then the frustration clause would come into play, with compensation for the failure to get the result. The supplier could be told to take the Trabant away and refund monies paid, or specified liquidated damages paid. The other question is whether there has been Fundamental Breach of Contract.

There are Model Forms of Contract around which might be relevant.

TJH

[GoSeigen]

I suppose that the situation you are contemplating is that where best endeavours have led to an outcome which is not that envisaged.

Yes and no. I was at pains to explain that the wording in the contract does NOT refer to "best endeavours", just that a party would "endeavour to do". I further explained and linked to a site which describes in detail how there are at most three categories of endeavour clause recognised in English law: "reasonable endeavours", "best endeavours" and perhaps "all reasonable endeavours" which in general is considered indistinguishable from "best endeavours".

In all disputes surrounding endeavours clauses a party has failed to achieve the desired object, so yes, you are right about that. But my question is about how a court views a clause in a contract which does not clearly state whether reasonable or best endeavours should be used.

In my case a company's terms state that it would endeavour to do something. They failed to do it of course. So I am wondering how much evidence they would have to produce to demonstrate to the court of their endeavours and how they were frustrated.

GS

[GoSeigen]

I think there is a case for concluding that an endeavours clause lacking one of the usual qualifiers (or something very similar) would be held to be unenforceable. The case law supports the argument that reasonable endeavours is the lowest in the hierarchy. So just "endeavour to" must fail to reach the hurdle of precision required for it to be justiciable.

Thanks chas49. Assuming you are right about the above, and given that this clause is in a standard contract presented to consumers by the company which drafted the contract, would a court really say that consumers would have to accept that the clause is unenforceable and therefore what the company said they would endeavour to do was actually never on the table so to speak?

I struggle to accept this as contracts should not contain completely superfluous clauses: there must have been some intention to be bound to some extent by the undertaking??

GS
P.S. I should add for removal of doubt that in this case the object to be achieved is very clear and easy for the endeavouring party to do. In fact the other party (me) could also easily do it but I did not due to the other party's obligation to "endeavour" to do it, and suffered a loss as a result.

[chas49]

The articles referenced in the OP and my reply both concerned themselves with these clauses in the context of commercial contracts where the parties are deemed to have equal bargaining power and can broadly agree to anything they like.

In consumer contracts the position is asymmetric and the business is usually seen as having stronger bargaining power, and the conumer is therefore given more protection.

This may well render such a clause an unfair term. This may be the avenue to research:

https://www.gov.uk/government/publicati ... erms-cma37

[Clitheroekid]

I think there is a case for concluding that an endeavours clause lacking one of the usual qualifiers (or something very similar) would be held to be unenforceable. The case law supports the argument that reasonable endeavours is the lowest in the hierarchy. So just "endeavour to" must fail to reach the hurdle of precision required for it to be justiciable.

No, this is not the case at all. There are rules of interpretation that apply to contracts generally, and the main one is that the courts are there to make contracts work if at all possible.

The starting point is to apply the test of "what a reasonable person having all the background knowledge which would have been available to the parties would have understood them to be using the language in the contract to mean".

So in this case an obligation to endeavour to do something would almost certainly be interpreted as using reasonable endeavours to do so, this being what the objective observer would assume the parties meant.

There's a good article about contractual interpretation here - https://www.ashurst.com/en/news-and-ins ... glish-law/

[Charlottesquare]

The ‘reasonably well-informed and normally diligent’ tenderer joins the Clapham omnibus.

https://www.walkermorris.co.uk/publicat ... m-omnibus/

[chas49]

I think there is a case for concluding that an endeavours clause lacking one of the usual qualifiers (or something very similar) would be held to be unenforceable. The case law supports the argument that reasonable endeavours is the lowest in the hierarchy. So just "endeavour to" must fail to reach the hurdle of precision required for it to be justiciable.

No, this is not the case at all. There are rules of interpretation that apply to contracts generally, and the main one is that the courts are there to make contracts work if at all possible.

Thanks CK. I probably knew that once many years ago

On reflection it should have been obvious that a better view would be that some endeavours would be needed, and they would need to be at least reasonable, otherwise doing the bare minimum would be a get-out in this example.

[GoSeigen]

I think there is a case for concluding that an endeavours clause lacking one of the usual qualifiers (or something very similar) would be held to be unenforceable. The case law supports the argument that reasonable endeavours is the lowest in the hierarchy. So just "endeavour to" must fail to reach the hurdle of precision required for it to be justiciable.

No, this is not the case at all. There are rules of interpretation that apply to contracts generally, and the main one is that the courts are there to make contracts work if at all possible.

Thanks CK. I probably knew that once many years ago

On reflection it should have been obvious that a better view would be that some endeavours would be needed, and they would need to be at least reasonable, otherwise doing the bare minimum would be a get-out in this example.

So I'm getting the idea that the defendant will have to demonstrate at least some reasonable steps taken and maybe explain how they were frustrated. My feeling is that they did nothing at all and will try to wriggle out of it some other way...

Thanks for the thoughts and links. I will endeavour to update later as the dispute evolves.


GS