Contracting parties should note that an obligation to use “best reasonable endeavours” imposes the same standard as an obligation to use “best endeavours” and will require a party to do all that can be reasonably done in the circumstances to achieve a stated object (while still taking into account the party’s own interests).
This case arose from a dispute regarding a contract of sale between the vendors, the Fosters, and the purchasers, the Halls. The contract included a condition that both parties use “best reasonable endeavours” to have a proposed plan of subdivision of the land registered within 12 months of the sale. When registration had not occurred within the agreed period, the Halls contended that the Fosters had failed to use their “best reasonable endeavours” and in the face of the Fosters’ purported rescission, then purported themselves to terminate the contract.
Compliance with the conditions stated in the local Council’s development consent was a precondition to registration of the subdivision. The Fosters argued that one of the conditions in the development consent (relating to the gradient of an access way for the property) was physically impossible to achieve and, on that basis, argued that they did not breach the obligation to use “best reasonable endeavours” in allowing the development consent to lapse.
In interpreting the use of the phrase “best reasonable endeavours”, the Court observed that the inclusion of the word “best” raised the standard higher than that required by an obligation to use “reasonable endeavours”, and then equated an obligation to use “best reasonable endeavours” with an obligation to use “best endeavours”. The Court also considered relevant case law and concluded that an obligation to use “best endeavours” is governed by what is reasonable in the circumstances, recognising that the relevant party is also acting in its own interests.
The Court then considered the proper construction of the development consent condition and decided that the Fosters were capable of complying with that condition. Further, the Court held that while the exercise of “best reasonable endeavours” will not always require a party to seek an amendment to a development consent condition, in the light of the Council’s demonstrated willingness to consider a requested amendment, the Fosters’ failure to request an amendment was in breach of their obligation to use “best reasonable endeavours”.