Clauses requiring parties to use ‘best’ or ‘reasonable’ endeavours are common place in commercial contracts. They make sense to parties at the time of contracting, where typically there is goodwill and a belief that the parties will operate under such clauses in the spirit of good faith. Frequently, however, that goodwill does not last and a dispute emerges. In this context, courts have had to wrestle with the meaning of these somewhat uncertain obligations.
In Jet2.com v. Blackpool Airport Limited  EWCA Civ 417, the Court of Appeal considered a contract between Jet2.com (“Jet2”), a low cost airline that operates between various United Kingdom and European destinations, and Blackpool Airport Limited (“BAL”), which owns and operates a commercial airport on the outskirts of Blackpool, England. In 2005, Jet2 and BAL executed a letter agreement setting out the terms on which Jet2 would operate from Blackpool Airport over the course of the following 15 years. Clause 1 of the letter agreement provided that “Jet2 and BAL will cooperate together and use their best endeavours to promote Jet2’s low cost services from Blackpool Airport and BAL will use all reasonable endeavours to provide a cost base that will facilitate Jet2’s low cost pricing.”
The dispute concerned Blackpool Airport’s operating hours. Although the airport’s normal operating hours were 7:00 am to 9:00 pm, Jet2 regularly operated flights outside of those hours for the first four years of the contract. However, in October 2010, in order to reduce its costs, BAL notified Jet2 that Blackpool Airport would not accept departures or arrivals scheduled outside normal operating hours. In response, Jet2 brought proceedings against BAL on the grounds that clause 1 of the letter agreement obliged BAL to accept aircraft movements outside of normal hours. The High Court ruled in Jet2’s favour, and BAL appealed.
All three judges on the Court of Appeals agreed that being able to ascertain the object of a best endeavours clause is critical in deciding whether the contractual commitment is sufficiently definite to be legally enforceable. The majority ruled that, in the circumstances, BAL’s actions amounted to a breach of contract, because the wording “best endeavours to promote Jet2’s low-cost services” was sufficiently certain so as to include keeping the airport open to accommodate flights outside normal hours ([31 and 71]). However, given the uncertainty about future events, the majority was not prepared to issue a broad declaration that BAL could never refuse aircraft movements ().
Relevant to Their Lordships’ decisions were the following propositions: (a) An obligation to use best endeavours is not unenforceable merely because it requires a party to act contrary to its commercial interests. Rather, the extent to which parties can have regard to their own financial interests will very much depend on the nature and terms of the contract in question, which in BAL’s case included incurring costs to facilitate Jet2’s use of the airport (). (b) The claimant had produced considerable evidence as to the object of the clause, namely promoting low-cost airline services, which included that low-cost airlines relied on obtaining maximum use of their aircraft by operating schedules under which plane movements occur early in the morning and late at night (). (c) There was criteria by which it was possible to assess whether best endeavours could be, and had been, used, specifically, that BAL had allowed Jet2 to use the airport outside of normal hours since the beginning of the contract, and had changed that stance suddenly and without a justifiable explanation ().
For completeness, Lewison LJ dissented because His Lordship considered that, on the facts of the case, there was insufficient clarity as to the object of clause 1 and because such clarity as there was in the case could only be gained by ignoring the usual rules of contract interpretation as to the relevance of background facts and the admissibility of parties’ subsequent conduct ([57 – 62]).