Best Endeavours: Legal Meaning and Applications in Contracts

For suppliers, commercial contracts are vital tools which form the critical framework of customer business relationships. These agreements define each party’s rights, responsibilities, and protections. Clear and precise terms can help your supplier business prevent misunderstandings and establish a dependable framework for your business’s operations. Suppliers, in particular, need to understand terms like “best endeavours” or “reasonable endeavours”—clauses which often crop up in contract negotiations. These “endeavours clauses” define the effort required to meet obligations and could significantly impact your business’s management of resources, costs, and legal risks. This article explores critical considerations for suppliers when your business negotiates endeavours clauses.

Why are Contracts Important?

A commercial contract is a critical legal document for suppliers. It defines the terms, rights, and obligations governing your business’s relationships.

Approaching each contractual obligation with care is vital, as even a single onerous clause you overlook can lead to significant compliance risks, financial strain, or reputational harm if you cannot comply with your obligations.

By carefully reviewing and negotiating your contract terms, your business can ensure that its commitments are realistic, clear, and aligned with your operational capacity.

What are Endeavours Clauses?

In many contracts, parties commit to absolute obligations, meaning they must fulfil their commitments to avoid breaching the contract. However, ‘endeavours clauses’ allow some flexibility by setting a responsibility to make an effort to achieve a goal without guaranteeing success. 

Common terms include best endeavours, reasonable endeavours, and all reasonable endeavours, each specifying a different level of effort. Best endeavours generally impose the strictest standard of obligation, though there can be various interpretations of a specific clause. 

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Why Should Your Business Be Cautious?

Agreeing to a best endeavours clause typically requires your business to meet significant obligations, often necessitating actions beyond simply trying, e.g., taking all specific steps necessary to fulfil an obligation. 

In practice, best endeavours require a strong level of commitment and may even require operationally intensive steps.

Sometimes, your business may feel compelled to accept such clauses to close a deal with a customer without fully understanding the risks.

Variants of the wording, such as “all reasonable endeavours” or “commercially reasonable endeavours,” may also require substantial effort in some instances. 

To avoid disputes about these clauses and the extent of your obligations, your business should carefully evaluate the likelihood of achieving the intended outcome before accepting a best endeavours clause. Seeking legal advice can help you clarify the responsibilities and negotiate terms aligning with your capacity and risk tolerance.

How Should Your Business Approach Negotiations?

Negotiating endeavours clauses can be challenging, especially if your business feels pressured to accept these terms to secure a deal. However, your company should consider whether you can accept the obligations a customer proposes. Sometimes, accepting these terms may benefit your business by securing a valuable relationship, but understanding the clause’s requirements is essential. 

Communicating the expected level of effort can help your business prevent costly disputes and misaligned expectations later.

Best endeavours clauses generally require the highest level of commitment, sometimes involving substantial financial or operational actions. Reasonable endeavours clauses allow your business to weigh obligations against practical considerations while all reasonable endeavours fall somewhere in between. As such, in some instances, you may wish to push back for a reasonable rather than best endeavours obligation for extreme caution. Best endeavours can be onerous and should only be agreed upon if you are comfortable. 

In practice, understanding and negotiating endeavours clauses can be complicated. 

Obtaining legal advice from a commercial contracts lawyer can be invaluable when assessing these obligations. This support can help you fully understand your obligations, support your negotiations, and ensure you are comfortable that your business can realistically fulfil the obligations you agree to.

Key Takeaways

Endeavours clauses, such as “best endeavours” and “reasonable endeavours,” can play an essential role in commercial contracts but require careful consideration from your business as a supplier. Unlike absolute contractual obligations where failing to fulfil a requirement leads to a breach, endeavours clauses provide flexibility by requiring only a reasonable effort, not a guaranteed outcome. These clauses set out specific expectations for the effort needed, which could directly impact your business’s resources, costs, and risk exposure. In particular, a best endeavours obligation can be highly onerous. 

Suppliers should understand the distinctions between these clauses, evaluate their feasibility, and commit only when obligations are transparent and manageable. Approaching these terms carefully and seeking legal advice allows suppliers to align contractual obligations with their business’s capacity and goals and protect themselves from risk.

If you need help with a contract, our experienced contract lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.

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