Best Endeavours vs. Reasonable Endeavours

Best endeavours vs. Reasonable Endeavours
Michael Lowry, partner and Team Leader for Stephens Scown’s Cornwall Family Team

Frequently, when parties reach a divorce settlement, the Applicant Solicitor will draft a Consent Order to include an obligation as an undertaking to the Court that “best endeavours” will be used to procure the release of one party (usually the Husband) from liability under a mortgage of the former matrimonial home.

This undertaking is usually accepted without any debate recognising that it would be impossible for the party to accept an absolute obligation as opposed to best endeavours considering it is a third party; here the mortgage company, who will ultimately release the party from the mortgage.
However, the definition of “best endeavours” is a classic grey area with little family case law as guidance. A term which evidently invokes an expectation of performance also carries a risk of non performance as there is no set definition on what must be achieved through the performance of a best endeavour.

Guidance can be found in the case of Lyons v Lyons [2010] where Rimmer LJ comments that a best endeavours undertaking is “one that imposes a high burden of responsibility”.

It is in commercial cases that the most useful guidance can be found. An obligation to use best endeavours has been held to constitute as following:

1. To do what can reasonably be done in the circumstances (Terrell v Mabie Tood & Co Ltd (1952))

2. To leave no stone unturned (Sheffield District Railway Company v Great Central Railway Company (1911))

3. Will not require actions which would be detrimental to the financial interests of the company or would undermine commercial standing or goodwill (Rackham v Peek Foods Ltd (1990))
Performance of a best endeavour obligation steers towards the necessity to take all practicable action.

In comparison, “reasonable endeavours” imposes a fair less onerous performance on the obligor. Rhodia International Holdings Ltd v Huntsman International LLC [2007], another commercial case, presents the obligation to follow one course of action and not all courses of action.
A comparison of the two definitions then determines that a reasonable endeavour obligation probably only requires the obligor to take one reasonable step, whereas a best endeavours obligation most likely requires the obligor to take all reasonable steps available.
Commercial law evidently is attempting to define the boundaries between best and reasonable endeavours. However, within the family context, the grey area in definition remains open to interpretation by the Courts. A Solicitor must therefore be comfortable with the degree of difference between the two. Such knowledge on board, a Solicitor would be mindful to advise their client what specific action must be taken in compliance. Similarly, a draftsman will be wise to set out a particular course of action specifically required to guide not only the Obligor but also the Court in determining if the clause or paragraph has been complied with.

Appropriate advice and accurate drafting therefore will limit the inherent risk which comes with a best or reasonable undertaking to the Court.


By Michael Lowry

Michael is a partner and Team Leader for Stephens Scown’s Cornwall Family Team. With offices in Exeter, Truro and St Austell, Stephens Scown Solicitors support some of the South West’s key sectors with specialist legal advice. For more information please visit http://www.stephens-scown.co.uk/

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