Here the Court of Appeal has considered reasonable endeavours and good faith obligations in the context of obligations contained in a sale agreement. The dispute arose out of a conditional contract (the Agreement) for sale of Bristol Rovers' current stadium to Sainsbury's who intended to create a mixed-use retail-led development. The Agreement included a number of conditions to be satisfied before it became unconditional, one of which was Sainsbury's obtaining planning permission to allow unrestricted store deliveries.
Sainsbury's was obliged to use "all reasonable endeavours" to obtain acceptable planning permission. There was also a more general provision obliging the parties to "act in good faith" in relation to their obligations under the Agreement. Sainsbury's sought planning permission allowing for deliveries to be made 24 / 7. Bristol City Council resolved to grant permission with a restriction on deliveries between the hours of 6am to 11pm on weekdays and 9am to 8pm at weekends. The parties eventually agreed this was not acceptable planning permission for the purposes of the Agreement, and Sainsbury's agreed to pursue an application which did not restrict delivery hours. Sainsbury's subsequently sought to terminate the Agreement, and the parties ended up in dispute.
The question arose whether Sainsbury's was in breach of the Agreement; in particular of its obligations to use all reasonable endeavours to procure an acceptable planning permission as soon as reasonably possible, and to act in good faith. The court did not examine the law on reasonable endeavours and good faith in detail, but rejected Bristol Rovers' arguments, commenting that the all reasonable endeavours and good faith obligations were curtailed by Sainsbury's specific obligations in relation to appeals and in particular given that Sainsbury's itself was not obliged to make a further planning appeal it could not have been the intention of the parties that Sainsbury's should be obliged to consent to such an appeal by Bristol Rovers
The judgment demonstrates the benefit of detailed drafting in specific clauses, which limits the scope of the endeavours and good faith obligations.
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