Demystifying contractual terms for charities: Using endeavours – what does it mean to undertake to try to do something?

Helping charities understand obligations and best, all reasonable, and reasonable endeavours in legal terms.

Background: “I only said I would try to do it…!?!” best endeavours, all reasonable endeavours and reasonable endeavours

How often do you promise to try to do something (e.g. to try to pick up the children from school on time), knowing that when you inevitably fail to do that thing, you can fall back on the argument that you only promised to try? I am guilty of that all the time, which inevitably results in me (the promissor) having an argument with the promisee (usually my partner) as to what “try” means in this context. Try can mean a number of things – from simply having a go, to doing everything in your power to ensure the thing you have promised, is done.

Contracts usually use the expression “to use endeavours” to denote when a party’s obligation to do something, is qualified or watered down to an obligation to try to do that thing. The extent of the party’s obligation to try (e.g. to simply have a go, or to do everything in their power) can be tailored accordingly. For example, in the context of a contractual obligation on behalf of Party A to obtain and provide certain information to Party B…:

1. “Party A shall obtain and provide the information to Party B” – this is an absolute obligation on Party A. If it fails to so obtain and provide, to any extent and whether it was within its control or not, it will be in breach of contract.

2. “Party A shall use best endeavours to obtain and provide the information to Party B” -  best endeavours is the most onerous alternative down from an absolute obligation. It does not impose a strict obligation on the promisor (Party A) to achieve the objective, but it does not mean second best endeavours. It is an obligation to take all steps that a prudent and determined person acting in their own interests and desiring the result would take. The promisor must do all in its power to bring about the result, even if that means subordinating its own interests (which include commercial interests). That may include incurring expenditure, or litigating, to achieve a best endeavours obligation.      

3. “Party A shall use all reasonable endeavours to obtain and provide the information to Party B” - all reasonable endeavours is commonly adopted as a compromise between best endeavours (above) and reasonable endeavours (below). In reality, the interpretation of all reasonable endeavours can be uncertain. In the circumstances, it may, but does not always, require the promisor (Party A) to sacrifice its commercial interests. (Note: one way to clarify this would be to amend the obligation to Party A using all reasonable, but commercially prudent endeavours. This would enable the promisor (Party A) to consider its own commercial interests alongside those of Party B, but it is required to take all reasonable steps to obtain and provide the information, provided those steps are commercially prudent.)

4. “Party A shall use reasonable endeavours to obtain and provide the information to Party B” - reasonable endeavours is the least onerous alternative to an absolute obligation. Reasonable endeavours requires the promisor (Party A) to take a reasonable course of action to achieve the objective, even if other – more onerous - courses of action are available. It would not normally require measures that would be harmful to the promisor's commercial interests.     

Recent developments

A force majeure clause is a reasonably common contractual clause which essentially frees the parties to a contract from liability or obligation when an extraordinary event or circumstance beyond the control of the parties (such as a war or pandemic) occurs, preventing the parties from performing the contract.

In RTI Ltd v MUR Shipping BV [2024] UKSC 18, a shipowner invoked the force majeure clause under a charterparty when the charterer’s parent company was sanctioned by the U.S., arguing that the sanctions would prevent payment in U.S. dollars as required by the contract. The charterer offered to make payment in euros instead and cover all currency costs, but the shipowner refused to accept that offer.

The contract included a force majeure clause containing a reasonable endeavours proviso – a party could not rely on a force majeure event (in this case, the imposition of sanctions on a party) if that party could have avoided it by the exercise of reasonable endeavours. The shipowner invoked that force majeure clause.

In this case, the court found that reasonable endeavours did not require the shipowner to accept payment in euros, because the shipowner was not obliged to accept non-contractual performance. As such, reasonable endeavours obligations still need to be aimed at the relevant contractual obligation.

What does this mean for charities?