A recent England and Wales Court of Appeal decision (Jet2.com Ltd v Blackpool Airport Ltd [2012] EWCA Civ 417) suggests that a "best endeavours" commitment can impose more onerous obligations than some might expect.

The Court of Appeal held that a general obligation on Blackpool Airport Limited (BAL) to use best endeavours to promote Jet2.com Ltd's (Jet2) low-cost airline services gave rise to a more specific obligation on BAL to allow Jet2 flights to arrive and depart outside of the airport's normal operating hours even though BAL would lose money in doing so.

The court held that both parties knew at the time of signing the contract that Jet2 would need to be able operate aircraft outside normal operating hours to be profitable. "It was too obvious to need mentioning that the movements of Jet2's aircraft … would not be confined to normal opening hours". Given this shared understanding the court found that BAL's obligation to use best endeavours to promote Jet2's business extended to keeping the airport open outside normal hours.

In this case, the majority agreed that the fact BAL would incur financial loss did not justify its failure to use best endeavours to promote Jet2's services by refusing to allow Jet2 flights access to the airport outside normal operating hours. They did not define in what circumstances BAL might have regard for its own financial interests except to say that if it became clear that Jet2 could never operate profitably from Blackpool Airport, BAL would not be required to spend more money to promote a failing business.

Lewison LJ dissented from the majority's decision. He contended that it is wrong in principle to consider only the particular factual situation which has given rise to a dispute without considering the other factual situations to which the endeavours clause might also apply. He remarked that in this case, it was impossible to determine what else the obligation to use best endeavours to promote Jet2's low-cost services might have required and that therefore one must conclude that the clause was too uncertain to be enforceable. Lewison LJ criticised the majority's decision as "construction of the contract" in the sense of "making the contract" rather than "interpreting the contract".

While the finding in this case is quite fact-specific, and the decision not binding in New Zealand, the Court of Appeal's decision may surprise and challenge the assumption some people hold that a "best endeavours" obligation does not extend to taking steps which could incur loss for the party giving that commitment. The precise meaning of any endeavours clause will always depend on the other provisions of the agreement and the surrounding commercial context. We suggest that to avoid uncertainty, parties be clear about what it is they are trying to achieve and if possible expressly state the specific obligations of each party, rather than rely on an endeavours clause.