If you have ever reviewed a construction contract you are likely to have seen terms such as “reasonable endeavours”, “best endeavours”, or “all reasonable endeavours and you may have had disputes about what these obligations actually mean in practice.
Why Endeavours Clauses Matter in Construction
Endeavours clauses usually appear where a party cannot guarantee a specific outcome but is still expected to take steps to achieve it. For example, a contractor may promise to use all reasonable endeavours to secure site access by a certain date. A developer might agree to use best endeavours to obtain planning permission. A subcontractor may be required to use reasonable endeavours to meet certain programme dates and to avoid delay. These clauses do not create guarantees, but they do impose enforceable duties to act with a certain level of effort.
Reasonable Endeavours
Reasonable endeavours is the least onerous form of obligation. It requires a party to take sensible and proportionate steps to achieve an objective, but it does not require action that is irrational, disproportionate or commercially damaging. For example, if a contractor must use reasonable endeavours to obtain access to a restricted area, they would be expected to make access requests, follow up appropriately, and provide necessary documentation. However, they would not be expected to make payments to third parties or pursue legal proceedings. Courts often interpret reasonable endeavours as requiring one sensible course of action rather than every possible option.
Best Endeavours: A Much Higher Bar
Best endeavours imposes a much greater obligation and requires careful consideration during contract negotiation. It demands genuine, proactive efforts to achieve the objective even where this involves cost, inconvenience or sacrifice of time and resources. If a subcontractor agrees to use best endeavours to complete works by a demanding deadline, they may be expected to bring in additional labour, approve overtime, or re-sequence work, even where doing so affects profitability.
That said, it is not a total obligation and Courts have consistently held that “best endeavours” does not require a party to act to its own financial detriment beyond what is reasonable in the circumstances.
There’s no obligation to:
- sacrifice profitability entirely,
- incur disproportionate costs, or
- take commercially irrational actions.
However, the line is fine. A contractor may need to incur some cost or inconvenience if that would reasonably be expected to help achieve the objective. For that reason, contractors should be cautious about accepting such obligations especially where outcomes depend on third party actions or approvals outside their control.
All Reasonable Endeavours: The Middle Ground
All reasonable endeavours is a hybrid phrase that sits between reasonable and best endeavours. Its meaning depends heavily on context and contract wording. It generally requires more than one reasonable step to achieve the goal, potentially exploring several options, but not to the extent of taking extreme or commercially damaging measures. For example, if a developer agrees to use all reasonable endeavours to obtain utility connections, they would be expected to communicate regularly with providers, submit documentation promptly, and escalate where appropriate. However, they would not usually be required to fund alternative supply routes or begin legal proceedings unless clearly appropriate.
Commercially Reasonable Endeavours: A Practical Approach
Commercially reasonable endeavours is an increasingly common phrase in bespoke or funder drafted contracts. It explicitly limits the obligation to actions that are commercially sensible and proportionate. This wording recognises that the party should not be forced to take steps that would undermine its financial or commercial interests. It strikes a balance between taking meaningful action and maintaining commercial practicality.
How the Courts Interpret Endeavours Clauses
The courts have considered these phrases on many occasions. While decisions depend on specific facts and wording, some general principles can be identified.
- Best endeavours may require expenditure or loss of profit if reasonable in the circumstances.
- Reasonable endeavours usually requires a single, sensible course of action.
- All reasonable endeavours may require pursuing multiple reasonable options but not extreme measures.
Courts focus on the contract wording, the surrounding commercial context, and whether the actions taken were proportionate and practical.
Practical Guidance for Contractors and Subcontractors
- Scrutinise all endeavours clauses carefully and seek to amend or remove any best endeavours wording that creates excessive risk.
- Qualify the obligation where possible, for example by adding a phrase such as ‘provided that this does not require the contractor to incur material cost or delay to other works’.
- Document all actions taken to comply with the clause, as contemporaneous evidence can be crucial in a dispute.
- Be cautious where obligations depend on third parties or approvals outside your control.
Final Thoughts
Endeavours clauses are often overlooked during negotiation but can carry significant implications once disputes or delays arise. In a sector that relies heavily on third party cooperation and external dependencies, clear and realistic wording is vital. For contractors, the main risk is agreeing to obligations that are unachievable. For developers, the focus should be on managing exposure and maintaining flexibility. Understanding the practical differences between reasonable, best, all reasonable, and commercially reasonable endeavours helps ensure balanced risk allocation and reduces the chance of conflict.
How CCC Can Help
At Contract & Construction Consultants, we advise contractors, subcontractors, and developers on the drafting, negotiation, and management of endeavours clauses in construction contracts. Our team reviews contracts to identify onerous obligations, recommends clearer and balanced alternatives, and assists in managing or defending claims where these clauses are disputed. If you face unclear or burdensome endeavours obligations, CCC can help you protect your position and minimise risk.
Contact us for a free initial consultation.
