Often, as deals are negotiated a seller or purchaser is put under obligations to get a matter dealt with. This is often phrased as a reasonable endeavours obligation. An important court decision on the phrase 'reasonable endeavours' shows such an obligation does require greater consideration that it may previously have been given.
Regularly, a reasonable endeavour is seen as a compromise by the party giving to commitment to do something. Thus, when they can't deliver the view is the other party will be let the point drop as it is then non-essential.
Endeavours obligations are frequently litigated. To avoid the court making a value judgement this case raises the fact that various components should be taken into account. For example, whether attempts to fulfil the reasonable endeavour obligation should be recorded, whether the same result can be reached another way, whether the obligations have an expiry date and if there any consequences for failure to achieve the result?
Now this case has been heard, compromising on a reasonable endeavours needs to be looked at more closely and anyone offering it needs to understand the obligation carries teeth.
High Court finds enforceable a reasonable endeavours requirement to obtain senior debt facility