“Reasonable endeavours” is one of the most commonly used phrases in commercial drafting and one of the least precisely understood. Here is a practical breakdown.
The hierarchy
Endeavours obligations sit on a spectrum:
- Best endeavours — the strongest. Requires all reasonable steps a person of the party’s standing could take, even at significant cost to itself.
- All reasonable endeavours — the middle ground. Requires more than reasonable endeavours but allows the party to weigh its own commercial interests.
- Reasonable endeavours — the weakest. The party need only take steps a reasonable person in its position would consider sensible; commercial interest, cost, and prospects of success are all permissible considerations.
What it does not mean
Reasonable endeavours is not a promise to succeed. A party that genuinely tries and fails has discharged the obligation. It also does not require expenditure that is disproportionate to the benefit, or action that would harm the party’s broader commercial position.
How to draft around it
If you need a specific action, do not rely on the endeavours formula — specify the action and the deadline. “The Seller shall use reasonable endeavours to obtain regulatory approval” is much weaker than “The Seller shall file the regulatory application within 14 days of signing and respond to all queries within 7 days.”
Endeavours clauses are useful where outcomes are uncertain. They are dangerous where outcomes are essential.