Caroline Kehoe deciphers the meaning of “reasonable endeavours” & “good faith”
Where it is not appropriate to impose an absolute contractual obligation two terms frequently bandied about during negotiations are “reasonable endeavours” and “good faith” but a good deal of uncertainty remains as to what each means in practice.
Endeavours clauses
Before agreeing to any particular terminology it is important to know what the obligation you are committing to really means—what would amount to a breach? The wealth of case law gives some insight but ultimately each case depends on its own facts. In the most recent case, Jet2.Com Limited v Blackpool Airport Limited [2011] EWHC 1529, [2011] All ER (D) 06 (Jul), Mackie J said: “The meaning of the expression remains a question of construction not of extrapolation from other cases…the expression will not always mean the same thing.”
The lowest hurdle
A “reasonable endeavours” clause is defined by reference to an objective standard of what an ordinary competent person might do in the same circumstances (The Talisman [1989] 1 Lloyd’s
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