A “reasonable endeavours” undertaking, and its variants, are common features of commercial contracts. These clauses might be inserted into agreements to balance the interests of the parties where the achievement of the contractual object involves conditions beyond the obligor’s control, for example, the procurement of a third party’s performance. Equally common is the insertion of these clauses into contracts to resolve a negotiation stalemate where one party refuses to promise the absolute achievement of the contractual objective.

Notwithstanding their common usage, the general principles regarding the interpretation and scope of non-absolute obligation clauses remain mired in some uncertainty. In decisions delivered just a week apart, both the Singapore Court of Appeal and the High Court of Australia established general guidelines on the approach to be taken in respect of such clauses. Each case presented different aspects of the uncertainties surrounding non-absolute obligation clauses. In KS Energy Services Ltd v BR Energy (M) Sdn Bhd,1 the Singapore Court of Appeal pronounced on the general approach to a simple “all reasonable endeavours” clause, as well as its relationship with “best endeavours” and “reasonable endeavours” clauses. In Electricity Generation Corporation T/AS Verve Energy v Woodside Energy Ltd,2 the High Court of Australia considered a “reasonable endeavours” clause that was qualified by an explicit provision on how the obligor’s interests are to be balanced against the obligee’s interests. Both cases go some way towards resolving the confusion surrounding non-absolute obligation clauses.