Case summary: In a contract, when a party is unable or unwilling to undertake to perform a specific obligation it will often agree to use its reasonable or best endeavours. But what does that mean and is there a difference between the two? The court said that “best endeavours” is a more onerous obligation than “reasonable endeavours” but that “all reasonable endeavours” may be the same as “best endeavours”. If a party has agreed to use reasonable endeavours that does not include doing something that involves sacrificing its own commercial interests unless the contract stipulates otherwise. Sacrifices to your own commercial interests may however have to be made if you have agreed to use your best endeavours.

Comment: To achieve certainty, parties should consider setting out in the contract any specific actions a party must take as part of its obligation to use its best or reasonable endeavours. Note that “best endeavours” is often interpreted to mean that a party may be obliged to spend money.

Rhodia International Holdings Ltd v Huntsman International LLC (21/02/2007)