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The meaning of phrases such as best efforts; reasonable
endeavours; commercial practicable efforts pose a challenge to the
interpretation of the scope and effect of contractual covenants and
obligations contained in written contracts, whether in lease
agreements or contract for the provision of services.
In Jet2.com Ltd v. Blackpool Airport Limitedą, the
Court of Appeal ordered that the content of a contractual
obligation to use "best endeavours to promote" another
person's business was not so uncertain as to be incapable of
giving rise to a legally binding obligation, although it might be
difficult to determine whether there had been a breach of it.
The judge held that to what extent a person who had undertaken
to use his best endeavours could have regard to his own
financial interests, would depend very much on the nature and terms
of the contract˛.
The defendant, a regional airport, claimed that it was entitled
to refuse to the plaintiffs claim that it accept aircraft movement
outside normal operating hours if that caused it to incur a loss.
In this instance, scheduling of aircraft movements outside normal
hours was seen as essential to the plaintiffs business –
a budget airline - and therefore fundamental to the agreement. The
object of the endeavours and the range of possible endeavours must
be considered together in order to decide whether there was a
justiciable obligation.
Comment
The impact of this judgement is that obligations, which must be
complied with or performed on a best endeavours basis, are not
necessarily automatically unenforceable. There is an important
difference between a clause whose content is so uncertain that it
is incapable of creating a binding obligation, and a clause which
give rise to a binding obligation, the precise limits of which are
difficult to define in advance. The object of the endeavours and
the range of possible endeavours must be considered together in
order to decide whether there was a justiciable obligation. In
determining "best endeavours", the judge held
the extent to which a person who undertakes to perform certain
obligations on this basis can have regard to his own financial
interests, will depend very much on the nature and terms of the
contract.
Footnotes
1 [2012] EWCA Civ 417. 2 April 2012
2 Yewbelle Ltd v. London Green Developments Ltd
[2006] EWHC 3166 (Ch) [2007] 1 EGLR 137
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