July 23, 2010

Commercial Agreements – No need to use endeavours!

Commercial agreements often contain an obligation to use reasonable endeavours. In a recent case the High Court considered the implications of an obligation to use all reasonable but commercially prudent endeavours.

The obligation to use endeavours can be divided into a number of categories, firstly starting with the most stringent; the obligation to use best endeavours, then all reasonable endeavours and finally reasonable endeavours.

In this case the court found that the obligation to use all reasonable but commercially prudent endeavours did not require the obligator to sacrifice its own commercial interests. It is therefore not the equivalent of best endeavours which can require the obligator to ignore its own commercial interests, but was not the equivalent of reasonable endeavours. This case illustrates the practical importance of seemingly small differences in the words of contractual obligations.

June 3, 2010

Closed Material Procedure - Fair and Open Justice

The Court of Appeal has ruled that it is not for the court to decide, in the absence of any statutory power or agreement between the parties to order a closed material procedure. A closed material procedure allows parties to comply with their disclosure obligations without disclosing material which would be contrary to the public interest, for example national security, in open court.

The Court of Appeal found that it was a fundamental principle that a litigant should be able to see and hear all the evidence which is seen and heard by the court - the principle of fair and open justice.