What does “best endeavours” mean? This was an issue in Jet2.com Ltd v Blackpool Airport Ltd; fasten your seatbelts…
Background to the case
- Blackpool Airport Ltd (BAL) entered into a 15 year contract with Jet2.com Ltd (Jet2) (a low-cost airline).
- The contract required both parties to "co-operate together and use their best endeavours to promote Jet2.com's low cost services” and for BAL to “use all reasonable endeavours to provide a cost base that will facilitate Jet2.com's low cost pricing”.
- The parties agreed that, for this case, best endeavours and all reasonable endeavours meant the same thing. The judge and Court of Appeal therefore treated the two expressions as interchangeable.
- For the first four years, BAL allowed Jet2 to arrive and depart outside its published opening hours, and BAL ran at a loss.
- Thereafter to improve profitability, BAL refused to accept arrivals or departures scheduled outside its published opening hours giving Jet2 only one week to change its schedules.
- Jet2 claimed breach of contract, and asked for a declaration to say what hours BAL must offer for the next ten years. BAL argued that its duties to use best endeavours / all reasonable endeavours did not require it to act against its own commercial interests.
What did the Courts decide?
The High Court
From the evidence, the court found that although the contract was silent as to operating hours, it could be implied that Jet2 would not be confined just to BAL’s published opening hours, even though this would create a loss for BAL.
Accordingly, the Judge held that BAL's sudden refusal to schedule any services outside their published opening hours was a breach of contract. BAL appealed, arguing that “best endeavours / all reasonable endeavours” was too uncertain to be enforceable. BAL also argued that these obligations should not cause them to act contrary to their own commercial interests.
The Court of Appeal (CA)
The CA upheld the High Court’s decision but only on a majority 2:1 verdict. The CA found that the object of the "best endeavours / all reasonable endeavours" obligations were certain and enforceable. There was significant evidence that both parties agreed that low-cost airlines are dependent upon the maximum use of their aircraft, requiring operating schedules with early morning and late night flights. This was fundamental to Jet2’s prosperity and the contract.
The dissenting judge took a more literal approach towards understanding the contract. His view was that if a contract was silent about a particular topic, then even if that topic was an important one (such as the issue of operating hours), the default position must surely be that it was simply not covered by the contract.
Commentary
- To avoid disputes parties to a contract need to be clear as to what it is they are trying to achieve.
- An obligation to use best endeavours / all reasonable endeavours will be enforceable if the object of the endeavours can be identified with sufficient certainty. This may, depending on the facts cause a party to act contrary to it owns commercial interests.
- It may well be preferable to expressly set out the actual steps to be taken by a party as oppose to relying upon on its attainment of a general objective.
