Meaning of “all reasonable endeavours” confirmed

KS Energy Services v B R Energy [2014] BLR, 658, Singapore Court of Appeal

Facts

BR Energy contracted to supply KS Energy Services with a special type of oil rig.  Instead promising specific completion by a set date, they promised to use all reasonable endeavours to procure that the rig was constructed and ready within 6 months from the agreement.  It failed to do so, and the parties could not agree what “all reasonable endeavours” meant.

Singapore Court of Appeal Held

1. Although the parties had used the expressions best endeavours and all reasonable endeavours at different points in the agreement, the two phrases meant the same thing.  In other words, an obligation on a party to do all that it reasonably could to enable the desired event to occur.
2. The approach of the English Court of Appeal in Jet2.com v Blackpool Airport (2012) was followed.
3. A reasonable endeavours obligation probably requires a party to take one reasonable course, not all of them, whereas an obligation to use best endeavours probably requires a party to take all the reasonable courses he can.  All reasonable endeavours therefore means the same as best endeavours.

Comment

1. Draftsmen often think they can compromise with each other when negotiating contracts by agreeing on all reasonable endeavours as a half way house between best endeavours and reasonable endeavours.  This shows that they are wrong to do so.

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