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Endeavours - How Much More Onerous Are Best Endeavours

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Clauses requiring a party to a contract to use 'reasonable endeavours' or 'best endeavours' in its performance are common, and while 'best' clearly implies something beyond 'reasonable', the lack of clarity in these terms has been the source of many legal disputes.

hlw Keeble Hawson LogoRecently, budget airline Jet2 and the operators of Blackpool Airport found themselves in the Court of Appeal over the meaning of a 'best endeavours' clause.

The economics of low-cost airlines such as Jet2 demand that they keep their planes in the air as much of the time as possible, which in turn means that flights are often scheduled for departure and landing early in the morning or late at night.

Jet2 arranged for flight operations to be conducted at Blackpool outside the airport's normal operating hours and this continued for four years.  In time, the airport realised that it was operating at a loss for those flights.  In 2010, it informed Jet2 that it would no longer accept flight operations outside its usual hours.

The two parties had entered into a 15-year agreement, which included the obligation that the airport should use 'best endeavours' to promote the services of Jet2 from the airport.  It was silent about permitted hours of operation.  The issue was whether or not this meant that the airport was required to operate at a loss in order to fulfil the 'best endeavours' clause.

The Court ruled that even though the effect of the agreement was to create a trading loss for the airport, the best endeavours clause required it to provide the out-of-hours service that Jet2 demanded.

Ashley Wood, Partner in hlw Keeble Hawson's Dispute Resolution Team commented that "The facts of this case graphically illustrate the onerous nature of a best endeavours clause.  If the clause had been of "reasonable endeavours" the decision would have probably gone the other way."

Please contact Ashley Wood on 0114 2521429 or Rachel Crookes on 0113 3993460

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