A party to a contract often tries to qualify its obligations or promises by saying that it will use reasonable endeavours to do something.  The other party frequently reacts by asking for an undertaking to use best endeavours. 
The general view is that an obligation to use best endeavours is more onerous than an obligation to use reasonable endeavours, but what do they actually mean? It's not an easy question to answer.


In both cases you need to look at the surrounding circumstances – in deciding whether you have actually used best endeavours or reasonable endeavours, the courts will look at the circumstances when you came to perform the contract (even if those circumstances are unusual or unexpected).


The result is that it is impossible to have a clear rule which applies in all circumstances; each case will depend on the circumstances and the expressions best endeavours and reasonable endeavours will not always mean the same thing as they did in other contracts and circumstances. This really is a situation where lawyers can legitimately say: ‘it depends’.

Best Endeavours -vs- Reasonable Endeavours

If you say you will use your best endeavours, you are agreeing to do everything in your power, i.e. to take the steps a prudent, determined and reasonable person, acting in his own interests and wanting to achieve the desired result, would take. You can look at the costs and the difficulties involved in performing the contract and at what is commercially practicable; you do not have to bankrupt your business or do something which is obviously not going to succeed in order to honour your undertaking.

If you say you will use reasonable endeavours, you may look at all commercial considerations, including the costs of honouring the undertaking, your reputation, your relations with other parties and the uncertainties and practicalities of complying with your obligation. You need not honour the obligation if you would suffer a financial or commercial disadvantage; you are not obliged to sacrifice your own commercial interests. If you promise to use reasonable endeavours and set out specific steps which you will take, you must take those steps even though it may not be in your commercial interests to do so.


 If this looks confusingly like promising to use your best endeavours, that is because it's not easy to distinguish between the two. The key seems to be that an undertaking to use reasonable endeavours is considered from the perspective of the person giving the undertaking, but an obligation to use best endeavours is considered from the other party’s perspective.
All Reasonable Endeavours


Does it matter whether you promise to use reasonable endeavours or all reasonable endeavours?  Most people use all reasonable endeavours when they are trying to strike a compromise, somewhere between reasonable and best endeavours, without knowing exactly what that compromise is or means.


An obligation to use all reasonable endeavours may, in some circumstances, mean the same as a promise to use best endeavours, but in other circumstances may mean the same as a promise to use reasonable endeavours. 
There may be more than one reasonable course to take. If there is more than one course, a promise to use reasonable endeavours may oblige you to take only one of them.  A promise to use your best endeavours probably requires you to take all the reasonable steps you can.


In Jet2.com, the judge decided that it was improbable that an undertaking to use all reasonable endeavours should allow the party giving that undertaking to limit or abandon performance once it became commercially undesirable or unprofitable unless that had been stated explicitly in the contract.
Existing cases give some idea of what might be required when you promise to use all reasonable endeavours. In CEP Holdings Limited v Steni, CEP was appointed as the exclusive UK distributor and undertook to use all reasonable endeavours to promote and sell Steni’s products. The judge held that CEP had a reasonable margin of discretion in how it discharged its obligations, but decided that CEP had failed to use all reasonable endeavours because sales of the products had declined although there had been substantial growth in the rest of the market; CEP had failed to produce any structured marketing plans; CEP’s systems for forecasting and logging sales were inadequate; and CEP had failed to produce marketing materials and attend trade fairs to promote the products.


Commercial Endeavours


It's increasingly common to see the words reasonable commercial endeavours, especially in US contracts, but the meaning of these words is even less certain. There is no need to insert the word ‘commercial’ in a contract made under English law because commercial considerations are taken into account if you promise to use reasonable endeavours. 

Top Tips


Set out specific obligations - Where possible, it's better for the contract to be specific about the steps to be taken, rather than simply using the expression reasonable endeavours, best endeavours or all reasonable endeavours only to find you then have a protracted argument about their meaning.


Take care with contracts which are not under English law – The interpretation of expressions such as best endeavours and reasonable endeavours varies from jurisdiction to jurisdiction, so be particularly careful when entering into a contract under a different system of law; the same words may have a rather different meaning.


Contact Details


If you would like further advice about any of the issues considered above please contact Christine Reid on 01865 864195 or email her at christine.reid@northwoodreid.com


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This article is not intended to be, and should not be taken as being, as legal advice. The law often changes and it varies from jurisdiction to jurisdiction; the information in this article is generic in nature and specific legal advice should be taken before acting on any of it.


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