Clauses requiring a party to a contract to use ‘reasonable endeavours’ or ‘best endeavours’ in its performance are common, and while ‘best’ clearly implies something beyond ‘reasonable’, the lack of clarity in these terms has been the source of many legal disputes.
Recently, budget airline Jet2 and the operators of Blackpool Airport found themselves in the Court of Appeal over the meaning of a ‘best endeavours’ clause.
The economics of low-cost airlines such as Jet2 demand that they keep their planes in the air as much of the time as possible, which in turn means that flights are often scheduled for departure and landing early in the morning or late at night.
Jet2 arranged for flight operations to be conducted at Blackpool outside the airport’s normal operating hours and this continued for four years. In time, the airport realised that it was operating at a loss with regard to these. In 2010, it informed Jet2 that it would no longer accept flight operations outside its usual hours.
The two parties had entered into a 15-year agreement, which included the obligation that the airport should use ‘best endeavours’ to promote the services of Jet2 from the airport. It was silent about permitted hours of operation. The issue was whether or not this meant that the airport was required to operate at a loss in order to fulfil the ‘best endeavours’ clause.
The Court ruled that even though the effect of the agreement was to create a trading loss for the airport, the best endeavours clause required it to provide the out-of-hours service that Jet2 demanded. If the clause had been for the use of ‘reasonable endeavours’, the decision would almost certainly have gone the other way.
For advice, please contact Fahmida Ismail on 0121 698 2200, email f.ismail@sydneymitchell.co.uk or fill in our online enquiry form.
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