Pub­li­ca­tions

Best endeav­ours” and rea­son­able endeav­ours” is there a difference?


In brief – Aus­tralian inter­pre­ta­tion dif­fer­ent to the UK

In the UK, the term best endeav­ours” implies a high­er stan­dard than the term rea­son­able endeav­ours”. How­ev­er, in Aus­tralia the terms appear to have the same prac­ti­cal effect.


Eng­lish posi­tion – best endeav­ours” means a high­er thresh­old must be met

In Eng­land, it seems that the terms best” and rea­son­able” are giv­en their deno­ta­tive mean­ing for the pur­pos­es of inter­pret­ing the stan­dard asso­ci­at­ed with the terms best endeav­ours” and rea­son­able endeav­ours”. The stan­dard required to achieve rea­son­able endeav­ours” is less than the stan­dard required to achieve best endeavours”.

Sheffield Dis­trict Rail­way Co v Great Cen­tral Rail­way Co

In Sheffield Dis­trict Rail­way Co v Great Cen­tral Rail­way Co (1911) 27 TLR 451, one of the first cas­es on the mean­ing of best endeav­ours”, Lawrence J said:

best endeav­ours’ means what the words say; they do not mean sec­ond best endeav­ours… the words mean that the Great Cen­tral must, broad­ly speak­ing, leave no stone unturned to devel­op traf­fic on the Sheffield Dis­trict Line.”

IBM Unit­ed King­dom Lim­it­ed v Rock­ware Glass Limited

In the more recent deci­sion of IBM Unit­ed King­dom Lim­it­ed v Rock­ware Glass Lim­it­ed [1980] FSR 335, Buck­ley LJ expressed that some­thing more than rea­son­able is required in the ful­fil­ment of a best endeav­ours” oblig­a­tion. LJ Lane said, in respect of the term best endeav­ours”, that:

these words oblige the pur­chas­er to take all rea­son­able steps which a pru­dent and deter­mined man act­ing in his own inter­ests and anxious…would have tak­en.” (p.345).

Giv­en this judi­cial dis­tinc­tion between best” and rea­son­able”, a legal prac­ti­tion­er in Eng­land would need to be pru­dent when con­sid­er­ing whether to apply a best endeav­ours” or rea­son­able endeav­ours” stan­dard in spe­cif­ic circumstances.

Aus­tralian posi­tion – no prac­ti­cal dif­fer­ence between best” and rea­son­able”

By con­trast, in Aus­tralia there is no dis­cernible dif­fer­ence in stan­dard between best endeav­ours” and rea­son­able endeav­ours”. This means that whether you use the term rea­son­able endeav­ours” or best endeav­ours”, the con­se­quences are identical.

Hos­pi­tal Prod­ucts Lim­it­ed v Unit­ed States Sur­gi­cal Corporation

A lead­ing deci­sion on the inter­pre­ta­tion of best endeav­ours” in Aus­tralia is Hos­pi­tal Prod­ucts Lim­it­ed v Unit­ed States Sur­gi­cal Cor­po­ra­tion (1984) 156 CLR 83 where an oblig­a­tion in a dis­trib­u­tor­ship agree­ment required the use of best endeav­ours” to pro­mote sales. Gibbs CJ con­sid­ered var­i­ous cas­es and con­clud­ed that:

an oblig­a­tion to use best endeav­ours” does not require the per­son who under­takes the oblig­a­tion to go beyond the bounds of rea­son; he is required to do all he rea­son­ably can in the cir­cum­stances to achieve the con­trac­tu­al object, but no more” (p.429).

From this, it seems that a court will con­sid­er rea­son­able­ness when inter­pret­ing whether a best endeav­ours” stan­dard has been achieved.

Graeme Webb Invest­ments Pty Lim­it­ed v Soer­pyk Pty Limited

On the oth­er hand, the term rea­son­able endeav­ours” has not been judi­cial­ly inter­pret­ed. How­ev­er, it was con­sid­ered in Graeme Webb Invest­ments Pty Lim­it­ed v Soer­pyk Pty Lim­it­ed [1993] NSW.

In this case, a ven­dor and pur­chas­er entered into a con­tract which stip­u­lat­ed that com­ple­tion was con­di­tion­al upon the reg­is­tra­tion of a plan of sub­di­vi­sion and that the ven­dor would make all rea­son­able endeav­ours to achieve such a reg­is­tra­tion as soon as pos­si­ble. The Local Gov­ern­ment Act pro­vid­ed that in order to obtain a reg­is­tra­tion of a plan of sub­di­vi­sion, a sec­tion 27 cer­tifi­cate was required under the Water Board Act.

The ven­dor failed to make the pay­ment required to obtain a sec­tion 27 cer­tifi­cate and the con­di­tion to reg­is­ter the plan of sub­di­vi­sion was unsat­is­fied. Jus­tice Hodg­son found in favour of the pur­chas­er because:

  • It was fore­see­able at the time the con­tract was entered into that pay­ment would be required to obtain a sec­tion 27 certificate
  • It was stan­dard prac­tice to make a pay­ment to obtain a sec­tion 27 certificate
  • As a prop­er­ty devel­op­er, the ven­dor should have known that it was nec­es­sary to make the pay­ment to obtain a sec­tion 27 certificate
Pre­vail­ing stan­dard of reasonableness

In Graeme Webb, it was con­sid­ered rea­son­able” in the cir­cum­stances for the ven­dor to make a pay­ment to obtain the sec­tion 27 cer­tifi­cate required for the reg­is­tra­tion of the plan of sub­di­vi­sion to sat­is­fy the con­di­tion in the contract.

Hence the bench­mark in both Hos­pi­tal Prod­ucts, where best endeav­ours” is con­sid­ered and Graeme Webb, where rea­son­able endeav­ours” is con­sid­ered, is that of reasonableness.

Aus­tralian com­men­ta­tors also con­cur that there is no dis­tinc­tion between the use of best endeav­ours” and rea­son­able endeav­ours”. (Please see Fur­ther read­ing” below.)

This means that rel­a­tive to the UK, less cau­tion is required from an Aus­tralian lawyer con­tem­plat­ing whether to use best endeav­ours” or rea­son­able endeav­ours” in a contract.

Draft­ing con­tracts in Australia

If spe­cif­ic oblig­a­tions are unknown at the time of draft­ing a con­tract, or if the oblig­a­tion is in the con­trol of one par­ty, the use of the terms best endeav­ours” and rea­son­able endeav­ours” is gen­er­al­ly the only option.

How­ev­er, it may be pos­si­ble to min­imise ambi­gu­i­ty by clear­ly pre­scrib­ing spe­cif­ic con­trac­tu­al require­ments, rather than using the terms best endeav­ours” and rea­son­able endeav­ours”. This makes it less like­ly that any­one could mis­in­ter­pret their obligations.

A way of fur­ther reduc­ing risk and uncer­tain­ty is to spec­i­fy the dam­ages which will result from the breach of an oblig­a­tion in a contract.

Fur­ther reading

Dhar­manan­da K, Anoth­er Endeav­our expe­di­tion – dis­cov­er­ing the mean­ing of endeav­our claus­es, Build­ing and Con­struc­tion Law, (2001) 17, pp.117 – 8.

Doyle S & Mul­grew K, What Do Best Endeav­ours”, Rea­son­able Endeav­ours” and All Rea­son­able Endeav­ours” Mean? The Aus­tralian Cor­po­rate Lawyer, Sep­tem­ber 2002, pp.11 – 13.

Emer­son J, Sim­ply the Best? Dis­cov­er­ing the real mean­ing of best endeav­ours”, Build­ing and Con­struc­tion Law, (2001) 17(4), pp.223 – 9.

Feath­er­stone A & Har­ris G, Best’ v rea­son­able’ endeav­ours – and fidu­cia­ry oblig­a­tions, Aus­tralian Con­struc­tion Law Bul­letin, (2004) 16(6), p.67.

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