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What is the difference between best endeavours and reasonable endeavours?

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5 mins read

Updated on 15 June 2023

Our subject expert
Sarah Gunton

Quality and Compliance Director & Commercial Partner

Whether you’re negotiating a franchise agreement, supplier contract, or share purchase deal, you’ve likely come across phrases like ‘best endeavours’, ‘reasonable endeavours’ and ‘all reasonable endeavours’.

They may sound interchangeable, but in legal terms, they’re not – and the practical consequences for your business can be significant. These clauses affect how far a party must go to meet its obligations, often in scenarios involving third parties or unpredictable circumstances.

Understanding the differences is crucial to managing risk and ensuring you're not overcommitting. If you're drafting, reviewing or negotiating commercial contracts, our commercial contract solicitors can help you navigate the legal nuances and protect your commercial position.

What is an endeavours clause?

These clauses are best illustrated with an example:

‘You will use best/reasonable/all reasonable endeavours to do X’ (e.g. arrange financing/obtain planning permission/the landlord’s written consent…)’.

They fall halfway between an absolute obligation - ‘You shall...’ and an optional act - ‘You may...’

They’re used to qualify an absolute obligation under a contract to achieve an aim, often when the parties cannot foresee precisely what action may be required or are dependent on a third party (e.g. the obtaining of local authority planning permission).

The most common forms include:

‘Best endeavours’ - the most onerous obligation.

‘Reasonable endeavours’ - the least onerous.

‘All reasonable endeavours’ - something in between.

Common variations include ‘commercially reasonable’, ‘commercially justifiable’ or ‘commercially prudent’.

What does an endeavours clause mean?

While they may initially seem appealing, endeavours clauses should not be viewed as the next best thing to a guarantee of performance or an easy way out of having to do something.

There is no one agreed definition and the courts interpret their meaning based on:

the parties’ intentions

what the phrase actually says
the other provisions of the agreement
the overall purpose and commercial context.

This is all totally subjective and leads to uncertainty of definition but case law to date suggests the following:

‘Best endeavours’ can include:

the sacrifice of the obligor’s commercial interests in favour the other party.
the incurring of expenditure

the conduct of litigation or the appeal of a court’s decision at the obligor’s expense.
taking all reasonable courses of action to achieve the objective.

In short, anything the obligee (recipient) would do in the circumstances to achieve the same result.

‘Reasonable endeavours’ can include considering your own commercial interests as well as those of the other party. This is different from an express good faith obligation, which should be drafted clearly if the parties intend one to apply.

‘All reasonable endeavours’ - the least certain in terms of meaning. Some case law has suggested it is similar to ‘best endeavours’.

Where are endeavours clauses used?

Endeavours clauses can be found in all types of commercial contract, from share sale and purchase agreements, franchise agreements, distributor agreements and development contracts.

They particularly appear in those contracts in which one party is reliant on a third party or there is no other way of phrasing the obligation or where one party is only prepared to try to fulfil an obligation rather than to commit absolutely.

For example, in a supply chain contract - an endeavour clause can be included to use best or reasonable endeavours to have goods arriving at the delivery destination within a prescribed timeframe. An absolute obligation may not be appropriate where the supplier is reliant on third parties to ship items by air or sea freight or needs customs clearance, and the contract may also need a separate force majeure clause for events beyond a party’s reasonable control.

A conditions precedent in a contract should not be confused with endeavour clauses. A condition precedent is a requirement that must be fulfilled before a contract becomes enforceable.

What do I need to know?

Caution - proceed with care!

A ‘best endeavours’ clause can result in a business having to act in a way that is far beyond their understanding of ‘trying’ or ‘endeavouring’.

‘All reasonable endeavours’ or variations such as ‘commercially justifiable/reasonable/prudent’ can be as onerous as ‘best endeavours’.

You must be clear on the likelihood of achieving the desired result before you take on the responsibility; discuss in pre-contract negotiations.

Whether or not you accept (or require) an ‘endeavours’ obligation will depend on your negotiating position and your perception of the value of the contract.

Take legal advice on the implications of agreeing to any endeavours clause. If the desired object has not been achieved, there will be dispute about what constitutes adequate ‘endeavours’ and the outcome of such litigation is by no means certain.

What can I do about an endeavours clause?

If an endeavours clause is to be used, clarity is everything. It is essential that the need for an endeavours clause is properly discussed in negotiations. You need to cover:

the minimum level of action required (in order to bring as much certainty as possible as to what is to be done).
what are the actual steps involved?
how much should meeting the obligation cost?
is there a duty to keep the recipient informed of progress being made?
when does the obligation expire - is there a time limit?

who is to conduct litigation, if that becomes necessary to meet the obligation?
what happens if all steps are followed but the aim isn’t achieved? Or it’s achieved but is very expensive (eg.conditions on a planning consent?).
what are the penalties for failing to achieve the aim?

All this needs to clearly set out in the contract so there is less scope for dispute about whether such action that has been taken was enough to satisfy the ‘endeavours’ clause.

Points to note

Keep comprehensive notes and records of steps taken and details of all communications with the other party. Usually the dispute is over whether any (or adequate) endeavours have been made rather than an argument about the differences between the types of clause.

Breach of an endeavours clause by failing to meet the obligations may also be a breach of contract which could have serious financial consequences for the party at fault.

Get clarity before you commit

Endeavours clauses can seem deceptively flexible, but they carry real legal weight. A lack of clarity around the required level of effort can lead to costly disputes or unintended liabilities. That’s why it's so important to approach these clauses with precision and legal insight.

Whether you’re seeking to include, negotiate or challenge an endeavours clause, our experienced commercial contract solicitors are here to help you strike the right balance between commercial ambition and legal certainty.

About our expert

Sarah Gunton

Quality and Compliance Director & Commercial Partner

Sarah is a commercial solicitor with more than 30 years’ experience helping businesses negotiate contracts, manage commercial risk and reach practical agreements.

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