You promise to do your best - how far must you go?

Updated September 2011

Parties to contracts often agree to do something or try to bring something about which is necessary to make the contract effective. One of three promises is given; to use reasonable endeavours, all reasonable endeavours or best endeavours, each with an increasing degree of commitment required to achieve the desired result.

In the recent case of Jet2.com Ltd v Blackpool Airport Ltd the High Court considered the extent of these obligations.

Jet2.com is a low cost commercial airline and it entered into an agreement with Blackpool Airport in 2005 in which the Airport agreed to use all reasonable endeavours to provide an airport base that would facilitate Jet2.com's low cost pricing.

Blackpool Airport initially agreed to allow Jet2.com to operate outside the Airport's normal hours; low cost airlines use these less popular early and late flight time-slots to take advantage of their reduced cost.

Blackpool Airport found that the cost of keeping open its terminals to facilitate these out of hours departures and arrivals far outweighed any income generated by the flights. In spring 2010 the Airport informed Jet2.com that it would no longer accept departures or arrivals outside normal hours.

The parties argued over whether the agreement between them, and in particular the Airport's commitment to use all reasonable endeavours to provide a low cost base, extended to Blackpool Airport being required to act against its own commercial interests in keeping the airport open.

The High Court judge found it relevant that Blackpool Airport's duties to use all reasonable endeavours related entirely to matters within its own control, i.e. there was no third party involved, no one it was trying to persuade to perform.

The judge decided in favour of Jet2.com in this case and held that a party committed to using all reasonable endeavours was unable to escape contractual performance simply because it became commercially undesirable to do so.

This particular matter involved injunctions, a trial with leading counsel acting for each party, 19 thick bundles of documents, and evidence from ten witnesses. Had the contract included a specific agreement as to operating hours then much of this could have been avoided.

The courts will not only look at the level of endeavours promised but at the contract as a whole and the obligations of the parties under it. As each case is decided on its facts no assumptions can be made as to how endeavours clauses will be interpreted. Wherever possible the contract should specify the obligations of the parties and exactly what steps parties will be required to make to satisfy their obligations.

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at September 2011. Specific advice should be sought for specific cases; we cannot be held responsible for any action (or decision not to take action) made in reliance upon the content of this publication.

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