High Court holds that “all reasonable endeavours” obligations not limited by a party’s commercial interests . . .

Barry Riley

The High Court in the case of Jet2.com Limited -v- Blackpool Airport Limited (BAL) considered whether an “all reasonable endeavours” obligation required a party to act against its commercial interests.

A spectrum of endeavours clauses has been established through case law, with “best endeavours” being the most stringent obligation, “reasonable endeavours” the least and “all reasonable endeavours” occupying the middle ground. The parties agreed in the present case that best endeavours and all reasonable endeavours meant the same thing, so the judge treated them as interchangeable.

BAL argued that its duty to use best or all reasonable endeavours did not require it to act against its own commercial interests. The judge however accepted Jet2.com’s argument that the refusal to allow arrivals and departures outside the operating hours was a serious breach of contract. The judge stated that it was not the intention between the parties that BAL should be able to suddenly withdraw a service that it had been providing to Jet2.com in light of what suited them or its shareholders. BAL’s loss of profitability could not solely be put down to the agreement and the judge noted that there were obviously questions regarding the airport’s overall efficiency and competence leading to the loss of profitability.

The judge considered the cases of Yewbelle and Phillips and in distinguishing them from the present case, he stated that BAL was in a position where the matters were within its own control rather than that of a third party. The judge also refused to rule on what specific operating hours BAL must provide for Jet2.com during the remaining ten years of the contract.

The case highlighted the fact that case law is not of great assistance in determining an endeavours clause, as it is a question of contract interpretation on which a decision will be made.

Barry Riley
briley@metcalfes.co.uk
DDI – 0117 9453 042

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