Reasonable endeavours is often a term that is included in many contracts that pass over my desk. Many start out as “best endeavours” which is then watered down to “Reasonable endeavours”. Whilst this change in wording was often viewed by our lawyers as a win… I must confess to regularly struggling with what endeavours are to be undertaken when they become “reasonable”. Fortunately, a recent case was heard on just this point in the matter of Electricity Generation Corporation trading as Verve Energy v Woodside Energy Ltd & Ors; Woodside Energy & Ors v Electricity Generation Corporation trading as Verve Energy [2014] HCA 7 . Even more pleasing for me was that Mallesons then released this linked commentary on the case (link)
This article contains the following useful summary on the use of “reasonable endeavours” by reference to the ruling majority making the following points:
• an obligation expressed as such is not an absolute obligation;
• the nature and extent of an obligation is conditioned by what is reasonable in the circumstances including one which may affect an obligee’s business; and
• some contracts containing the obligation to use “reasonable endeavours” contain their own standard of what is reasonable.
The language used to express the obligation to supply MDQ was readily contrasted to the obligation to supply SMDQ – indicating an internal standard of reasonableness by which the obligation to supply the SMDQ could be measured.
Now… if only I could find something similar on what consitutes “Best endeavours” I will be set 😉
Adrian Hunter 