International Construction Law Review
WHAT ARE “BEST ENDEAVOURS”?
JULIAN BAILEY
Solicitor, CMS Cameron McKenna, London
I. INTRODUCTION
What is the purpose of a “best endeavours” clause in a contract? Its purpose is not to impose an obligation to achieve a particular objective. The purpose is to require a party to “do their best” towards achieving that objective. If the objective is not achieved, that does not of itself mean that the relevant obligor is in breach of his or her best endeavours obligation. It is only if the objective was not achieved because the person did not use his or her best endeavours that there will be a breach.
Best endeavours clauses are used in construction contracts where there is some doubt about the ability of one party to achieve a particular objective. The doubt may exist, for example, because the objective cannot be achieved unless a third party beyond the obligor’s control does something. For instance, an owner may want to obtain the benefit of supplier warranties from subcontractors. However, the owner does not deal with the subcontractors, so it is unable to obtain the warranties itself. The main contractor, though, is in a position to obtain these warranties, because it deals with the subcontractors. But the main contractor may be unable to guarantee that it can obtain subcontractor warranties. Some subcontractors may not offer warranties on suitable terms, and others may not even offer them at all. The main contractor, therefore, may simply agree to use its best endeavours to procure warranties for the benefit of the owner, because that is the most that the main contractor can promise in the circumstances.1
Best endeavours clauses are used in other commercial contexts, such as the development of a business or the development of intellectual property. Best endeavours provisions are used in these instances not only because there is uncertainty over whether a particular objective can be achieved, but because there is uncertainty over precisely what the ultimate objective is. For example, a contractual licence to work a patent may be accompanied by an obligation on the licensee’s part to use its best endeavours to develop and promote the sale of the patented article.2
There may not be a definite objective, such as
1 There are innumerable examples in the construction idiom of where a contractual object is not necessarily achievable, and where agreement is reached simply that best endeavours are to be used to try to achieve the objective. Another example is effecting and maintaining an insurance policy, where there may be uncertainty as to the availability of cover for a particular type of risk or project: see, for example, North Goonyella Coal Mines Pty Ltd v. North Goonyella Coal Properties Pty Ltd
[2002] QSC 368.
2 See, for example, Terrell
v. Mabie Todd & Co Ltd
(1952) 59 RPC 234.
[2004
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