"Best endeavours" ... best avoided

The case of Jet2.com Limited v Blackpool Airport Limited centred on whether Blackpool Airport Limited (BAL) was under an obligation to accommodate flights operated by Jet2.com (a low cost airline), outside of its normal operating hours. The ability to do this was key to Jet2.com maintaining its low cost status, but also caused BAL to incur significant additional costs. When BAL served notice on Jet2.com stating that it was no longer allowing flights outside of its normal operating hours, Jet2.com asserted breach of contract and sought damages.

Under the contract the parties had agreed to “co-operate together and use their best endeavours to promote Jet2.com’s low cost services”. The court considered the enforceability of a “best endeavours” clause and whether the factual background could clarify the objective of such a clause. It held that this general obligation gave rise to a more specific obligation on BAL to allow Jet2.com flights to arrive and depart outside of the airport’s normal operating hours, even though BAL would lose money in doing so. A “best endeavours” obligation could therefore result in a party acting to its financial detriment.

When negotiating contracts, parties tend to focus on the extent of their obligations and the lengths to which they will be required to go to, to achieve a particular outcome, such as “best endeavour” or “reasonable endeavours”. This case shows that it is essential to identify the specific outcome of each obligation and ensure that it is sufficiently clear and certain so as to be enforceable.

Wherever possible you should agree specific and certain objectives from the outset and make express provision as to what will constitute performance. Broadly worded or vague obligations could lead to parties being held to a more onerous standard than envisaged.

For further information contact Jayne Hussey.