Best Endeavours – At what cost to the Promisor?

Jet2.com –v- Blackpool Airport (2012) CILL

Blackpool Airport and Jet2 signed an agreement under which Jet2 would operate flights out of Blackpool Airport for 15 years.  It was a particular feature that although Blackpool Airport only normally operated between 7am and 9pm, it agreed to use “best endeavours” to promote Jet2′s low cost services from the airport, and to use “all reasonable endeavours” to provide a cost base for Jet2 which facilitated low cost pricing.  This meant operating outside its normal hours.  Blackpool Airport eventually found this arrangement too expensive and at quite short notice stopped operating outside its normal working hours.  Jet2 sued for breach of contract.

Blackpool Airport’s defence was that these promises were too vague and therefore void for uncertainty, and further that they were not obliged to use either best endeavours or all reasonable endeavours in such a way as to suffer financial loss.

Court of Appeal Held:

1. The parties had agreed that “all reasonable endeavours” and “best endeavours” amounted to the same thing and the court accepted this.
2. Although it was possible for any contract clause to be too vague to be enforceable, the Court considered these clauses were too vague. Just because the precise limits of an obligation are difficult to define in advance does not invalidate a clause if it can be given some practical effect.
3. If the circumstances are appropriate it is quite possible for a best endeavours clause to commit the Promisor to his own financial or commercial detriment.  In this case for example if Blackpool Airport was going to do anything for Jet2, it was going to have to operate after 9pm and before 7am; and if the clause was to have any meaning then it necessarily followed that Blackpool Airport was going to have to accept some damage to its own financial and commercial interests.  Jet2.com was therefore successful in its claim for damages.

Comment

This case did not examine the difference between “best endeavours” and simple “reasonable endeavours” although it is useful to note that the phrase “all reasonable endeavours” is likely to be regarded in future as being equal to “best endeavours”.

The case also reinforces the modern view that a promisor undertaking to use “best endeavours” accepts the risk that doing so will cause him financial or commercial pain.

For more information, help or advice please call Rob Langley on 0191 211 7975 or email[email protected].