Use all reasonable endeavours

Here the supplier terminated the exclusive distribution agreement.? The contract required the distributor to use "all reasonable endeavours" in several clauses.? The supplier was of the view that the distributor had failed to do so.?

The danger of terminating any sort of contract on the basis of woolly wording is that if successfully challenged the termination would be deemed wrongful and give rise to a claim against, instead of by, the terminating party.

?

Traditionally "all reasonable endeavours" falls mid way between "best endeavours" and "reasonable endeavours".? But what does the expression "all reasonable endeavours" actually mean?

?

In this case the court decided that it meant something like "do everything that a reasonably competent and energetic distributor would do to promote the marketing and sales of the supplier's products in the relevant territory, knowing that the supplier was entirely dependent upon his ... efforts".?

?

In support of the distributor the court did say that given the flexible and commercial nature of the obligation to "use all reasonable endeavours" the distributor should have a "generous margin ?.in the exercise of its own business discretion".

?

So we now know at least that someone agreeing to "use all reasonable endeavours" has a generous margin but must perform energetically!

?

Case: In CEP Holdings Ltd v Steni AS

?

?

Go back

Subscribe to our RSS feed