Exploding pipes, exploding prices: High Court rules on 'reasonable endeavours'

In the recent case of Woodside Energy Ltd v Electricity Generation Corporation, the High Court considered the construction of a contractual clause requiring a party to 'use reasonable endeavours' to supply supplemental gas and found that a party's contractual obligation to use 'reasonable endeavours' to deliver a product under a supply agreement did not require it to forgo its own business and commercial interests.

Facts

Electricity Generation Corporation, trading as Verve, is a statutory corporation responsible for generating and supplying electricity to a large area of Western Australia.

Verve entered into a long term gas supply agreement with various gas suppliers including Woodside Energy. Under the supply agreement, Woodside was obliged to provide gas up to a maximum daily quantity and to 'use reasonable endeavours to make available' a supplemental maximum daily quantity of gas.