When the term “best endeavours” features in a construction contract it’s not simply enough that the contractor has an obligation to complete the works on time, it may for instance impose a duty to re-programme the works either to prevent delay or to reduce delay when necessary.
Despite the courts having grappled with this term for many years, there is no single definitive authority on its meaning. And even though it is found in the most widely used family of off the shelf contracts, the JCT suite, among others, no definition is provided. Contractors and contract administrators are left in a quandary. It is of great significance of a contractors right to an extension of time, and to what extent a contractor must take steps to fulfil a best endeavours obligation is fact based, meaning it would be necessary to consider the particular circumstances of each situation as it unfolds. Projects don’t always go well, and through no fault of the contractor, the works may be far behind programme with no defined date in the future. But all the blame is being laid at its door. A contractor will have to contend with two possible situations. Not meeting the completion date, and at the same time defending a possible claim that it’s not proceeding with best endeavours. In addition to determining just how far it needs to go financially, while attempting to avoid committing commercial suicide. But it’s not all doom and gloom. A contractor is entitled to take into account all relevant commercial considerations, and to weigh up the likelihood of succeeding in the endeavour before taking any particular course. In particular, an entitlement to look first and foremost, if not only, to its own interests in determining whether any particular action should be taken at all weighed against the chances of achieving the desired result. Liability will of course play a big part. One very important exception to this is that where the contract expressly specifies that certain steps have to be taken as part of the exercise of best endeavours, those steps will have to be taken, even if that could be said to involve the sacrificing of the contractor’s commercial interests. Final thoughts An undefined best endeavour obligation creates uncertainty as to what exactly is required of a contractor. As with any obligation, the more precise the endeavours clause in a contract, the less likely it is to lead to interpretation disputes. To achieve greater certainty, it might be preferable to specify in the contract the steps a contractor is required to take (or not take) in order to comply with the obligation.
0 Comments
|
Dr. Andrew MilnerDBEnv, LLM, MSc, BSc, MRICS, MCIArb Archives
February 2023
Categories |