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Reasonable Endeavours – how much importance should be given to that obligation?

You often see parties to a contract agreeing to make “endeavours” to do something – usually either best or reasonable endeavours. A recent case, Sainsbury’s Supermarkets Ltd v Bristol Rovers (1883) Ltd [2016] discusses the importance of the term “reasonable endeavours” amongst other obligations in the contract.

In this case Sainsbury’s agreed to use “reasonable endeavours” to obtain a satisfactory planning permission. Bristol Rovers argued that Sainsbury’s had not fulfilled its obligations to use reasonable endeavours and that Sainsburys should have done more to obtain a satisfactory planning permission than it actually did.  The Court held that the obligation to use reasonable endeavours was constrained by the other express terms in the contract and that if the contract set out what was to occur in certain circumstances, Sainsburys could not be held to be in breach of the obligation to use reasonable endeavours because it had complied with other set contractual provisions.
The case also discussed what happens when both parties agree to act in a way which is not set out in the contract. In this case, the contract provided that an appeal was only to be made if there was an expert view that there was a 60% chance that the appeal would be successful.  In this case the parties agreed that Sainsburys should make an initial appeal without first getting the expert view.  As the parties had agreed that initially, Bristol Rovers could not later take action against Sainsburys for not obtaining the opinion of an expert at a later date.
The lessons from this case are:

  • Do not read obligations such as reasonable or best endeavours in isolation from the rest of the contract.
  • If both sides to a contract are happy to change a term of the contract that is possible, but it will not then be possible to take action to enforce the original term that has then been varied.

If you would like advice on your obligations under a contract then please contact Nina Wilson.