Testing The Waters Of ´All Reasonable Endeavours´

The NSW Court of Appeal recently considered the meaning of the common contractual term 'all reasonable endeavours' in its decision in Waters Lane and Anor v Sweeney and Ors. This case is significant in its discussion of the difference between 'all reasonable endeavours' and 'best endeavours'.

Background

The Sweeneys (respondents) were the owners of a large rural property near Campbelltown in Sydney, which Waters Lane (appellant) wanted to rezone and develop for residential purposes, including the construction of a retirement village. The parties had entered a Heads of Agreement which included a clause that required Waters Lane to use 'all reasonable endeavours' to satisfy certain conditions by a Sunset Date of 9 March 2006. Waters Lane had the unilateral right to extend the Sunset Date on notice, but never exercised this right.