Reasonable, best and all reasonable endeavours: What’s the difference?

In most commercial contracts, you will find clauses requiring the parties to comply with obligations including phrases such as “best endeavours,” “reasonable endeavours,” and “all reasonable endeavours.” These terms are used to allocate risk and clarify each party’s level of responsibility. However, despite their common use, they are frequently misunderstood and their meanings are not defined in legislation, but instead have developed through the common law.

This lack of clarity can leave businesses exposed to unexpected obligations, disputes, and even costly litigation. In this article, we break down what each standard actually requires and what can happen if they are used incorrectly.

What do these different endeavours clauses require?

Although they may appear similar, the courts have consistently held that each type of endeavours clause carries a different level of obligation. In simple terms, these clauses determine how far a party must go to achieve a particular contractual outcome.

Here is what each one means in practice:

Reasonable endeavours

• At the bottom end of the spectrum sits the least demanding obligation. This obligation generally requires a party to pursue one reasonable course of action that is sensible and proportionate, and which does not compromise their own commercial interests, rather than exhausting all possible options. Commercial considerations, such as cost and the likelihood of success, can be taken into account when determining what a reasonable course of action would be.

All reasonable endeavours

• This obligation sits in the middle, being more onerous than ‘reasonable endeavours’ but less clear in scope. It requires taking multiple reasonable steps, possibly requiring a party to exhaust all reasonable courses of action, but without stretching to the most burdensome or extreme measures. In practice, courts often view it as closer to ‘best endeavours’ unless the contract specifies otherwise.
• When interpreting these clauses, courts always consider the commercial context and assess what would be reasonable in the circumstances. They will also ask whether the steps taken would realistically have achieved the intended outcome. Equally, the precise meaning will depend on the contract’s wording and context.

Best endeavours

• This is the highest level of commitment – the most onerous and stringent. It requires a party to take all reasonable steps to achieve the objective which a reasonable person, acting in their own interests and desirous of achieving the result, would take. All reasonable steps will be required to be taken even if doing so involves additional time, effort, or expense. However, it would not require a party to take steps which would be financially ruinous or against their own interests.
• The expectation is broad: essentially, “leave no stone unturned,” provided the steps remain broadly reasonable.

A practical example

Imagine a key supplier suddenly fails in the supply chain of an online business:

• A reasonable endeavours clause might require the business to trial one alternative supplier;
• An all reasonable endeavours clause may require approaching multiple potential suppliers;  but
• A best endeavours clause could require the business to explore every reasonable avenue to secure a replacement, potentially involving extra time, cost, or negotiation.

Best practices and common pitfalls

Given their significant differences, these clauses should never be used as interchangeable filler wording. When drafting commercial contracts, it’s important to:

• Define what “reasonableness” means in the specific context;
• Avoid vague or open‑ended obligations;
• Set clear cost and time boundaries; and
• Outline any concrete steps a party must take to show compliance.

Summary

Even well‑drafted clauses can cause problems if they don’t reflect the commercial realities or the parties’ actual intentions. Before finalising the contract, both parties should consider what the clause means to them and whether any assumptions are being made.

How can Ellis Jones help you?

Ellis Jones have a specialised Dispute Resolution team available to assist with any disputes arising in respect of a contract. If you are party to a contract or are considering the validity of a contract prepared for you, we can help. Should you wish to discuss this further, please do not hesitate to contact our specialist Dispute Resolution experts on 01202 525333.