Best endeavours: Its enforceabilty and its scope

In Jet2.com Ltd v Blackpool Airport Ltd [2012] EWCA Civ 417, [2012] All ER (D) 24 (Apr) the Court of Appeal dismissed an appeal from the decision of Judge Mackie (on which see our October 2011 issue, pp11-12) and, in doing so, considered the nature of the obligation that is assumed by a party who agrees to use best endeavours. In relation to the enforceability of such an obligation, it was held that it should usually be held to be enforceable unless the object intended to be procured by the endeavours is too vague to be itself a matter of legal obligation or the parties have provided no criteria on the basis of which it is possible to assess whether best endeavours have been, or can be, used. In relation to the extent of the obligation that is assumed, it operates to qualify the pursuit of self-interest and the extent to which it permits a party to have regard to its own financial interests will depend very much on the nature and terms of the contract in question.

The facts

The claimant, a low cost airline company, operated an airline service out of an airport owned by the defendants. The issue between the parties related to the ability of the claimant to operate a service out of the ‘normal’ hours of operation of the airport (which were between 07.00 and 21.00 in winter and 06.00 and 20.00 in summer). The agreement did not expressly impose an obligation on the defendants to operate the airport outside of normal hours, but nor did it contain a restriction on opening hours. However, it was known that low cost airlines were in the habit of operating flights outside normal operating hours. Over the years, the practice had developed whereby the claimant’s flight schedules did operate outside of these normal hours and the defendants did not raise an objection to this practice. But the defendants began to experience greater financial difficulties and on 22 October 2010 they told the claimant that, with effect from midnight on 29 October, they would not accept departures or arrivals outside normal hours. Judge Mackie held that this ‘sudden and unilateral’ decision on the part of the defendants amounted to a serious breach of contract. The defendants appealed to the Court of Appeal but their appeal was dismissed.