Think twice before offering your 'best endeavours'
Companies often offer to use their ‘best endeavours’ to get something done but without fully understanding what they are committing themselves to, warns Sonel Martin, a commercial lawyer at Kings Hill-based Vertex Law.
And a recent court case has made clear just how onerous pledging your best endeavours could be – and the extent to which it can require you to act against your commercial interests.
In a case involving Jet2.com and Blackpool Airport, the Court of Appeal had to consider whether the airport’s promise to use its best endeavours to promote Jet2.com’s business obliged it to go to the considerable expense of providing an operating base for the low-cost airline outside the airport’s normal business hours.
There was no express obligation in the contract to provide an out-of-hours service and the airport claimed that, in considering what would constitute best endeavours, they were entitled to take into account their own commercial interests and should not be required to provide a loss-making service.
The court, however, disagreed and ruled that providing a service outside the airport’s normal operating hours was fundamental to promoting Jet2’s low-cost airline service – and because of the best endeavours pledge, Blackpool Airport was obliged to comply with the Jet2.com’s request.
The only exception, the court said, would be if it could be shown that, notwithstanding the out-of-hours operation, Jet2.com would never operate profitably. In that case, the airport’s commercial interests would prevail.
The lesson for businesses is that if they do include a best endeavour undertaking in a contract, they might be well advised to spell out exactly what they consider their obligations to be.
The material in this article has been written for the purpose of giving a general overview of the law in this area and is not intended to be relied upon as specific advice.
For more on applicants obligations, contact: Sonel Martin at Vertex Law on 01732 224000 or email@example.com.