Reasonable endeavours, diligence/facilitation

When action by one party is necessary to facilitate or enable performance by the other Courts infer duties to take such action and promote the duties through requirements which ensure that such actions are carried out timeously or otherwise reasonably. In Hick v Raymond and Reid, Lord Watson ruled that where there was no time specified for cargo discharge by the consignee, the law implies a rule of “general application” that unloading “shall be performed within a reasonable time”.^[1] In Sparks v Biden, above, HHJ Davis-White QC decided that a term requiring the Defendant to market and sell the houses within a reasonable period of time should be implied.^{[2] [3] [4]} The best developed law in these cases is to be found in engineering and construction contracting. ' Vinelott J, citing the MvD rule, implied a term into the 1963 JCT form, which requires significant interaction (see the partial list in 2.7 below), and ruled: “the building owner would do all things necessary to enable the contractor to carry out the work ... the Courts have not gone beyond the implication of a duty to co-operate whenever it is reasonably necessary”. The term was implied on the basis of a “fourth” category’, which seems to mix implied-in-law and “implicit in the contract”.

Keating, paraphrasing Lord Simon in Luxor (Eastbourne) v Cooper?⁰ says: “the employer impliedly agrees to do everything that is necessary on his part to bring about completion of the contract”. Construction contracts will be interpreted to include obligations that site must be handed over in a reasonable time,⁷ possibly immediately,⁷' and drawings and instructions provided in a reasonable time.⁷

Where cash is to be paid, money must be given at a time to allow it to be counted.^7, John Stannard lists cases in which a receiver of goods must be given enough time and the right facilities to inspect them; otherwise there will be neither tender nor delivery.⁷⁶ In Croninger v Crocker the New York Court found “little doubt that time should be given the tenderee for such examination before sunset and by daylight”. The principle is ancient; in 1597, in Withers v Drew, a distinction was drawn between matters requiring personal attendance (such as payment of rent) and those not; “things done in the night, where personal attendance of another is not necessary, are good”. What is reasonable changes over time; in Proudfoot v Montefiore an agent was held obliged to use the novel “electric telegraph” to communicate efficaciously with his principal.⁷

In the US there are some contracting contexts where Courts will infer obligations on employers to use best endeavours in coordination of contractors.⁸⁰

In shipping cases obligations to act reasonably to facilitate the other’s performance have been long inferred. In Ford v Cotesworth Blackburn J ruled that in the joint act of cargo “each party shall use reasonable diligence in performing his part”, saying

• (LexisNexis Butterworths 2003) says that construction of the architect’s obligations would procure the same result.
• 70 Luxor (Eastbourne) Ltd v Cooper (n. 22 above) at 39.
• 71 Stephen Furst and others (eds), Keating on Construction Contracts (Sweet & Maxwell 2006) at 3.052.
• 72 Arterial Drainage Co. v Rathangan Drainage Board (1880) 6 LR Ir 513, Alfred A Hudson and IN Duncan Wallace, Hudson’s Building and Engineering Contracts (11th edn, Sweet & Maxwell 1995) at 4.133-4.146 citing Roberts - “there must be an implied term that the site will be handed over to the contractor within a reasonable time”. John E Stannard, Delay in the Performance of Contractual Obligations (OUP 2007) at 5.90-91.
• 73 Freeman r Hensler (1900) JP 260.
• 74 Roberts v The Bury Improvement Commissioners (1870) LR 5 CP 310 (Exchequer). This includes nomination of specialist contractors - Hudson at 3.148.
• 75 Wade’s Case (1601) 5 Co Rep 114A.
• 76 Stannard, Delay, at 4.07-4.13.
• 77 Croninger v Crocker 62 NY 158.
• 78 Withers v Drew (1597) 78 ER 913. In Oakdown Ltd >’ Bernstein & Co. (1984) 49 P & CR 282; the Court dismissed as "ridiculous” an argument that posting cash through a letter box at midnight on Good Friday was tender.
• 79 Proudfoot v Montefiore (1367) LR 2 QB 51I.8B&S5I0 (QB) Cockburn CJ at 519.
• 80 H. E. Crook Co., Inc. v United States 270 US 4 (1926) (Supreme Court) cited in Hudson and Wallace, Hudson 1970 (n. 14 above) at 1.189.

that this obligation was implied by law.^[5] Lord Esher mentions reasonable/ reasonably three times in the passage from Harris v Best quoted above.

In numerous eases the Courts have determined which party should obtain an import or export licence where these are required for performance^{[6] [7] [8]} and have inferred obligations which ensure that each party has the necessary information to make the applications.^[9] Best endeavours obligations, or a duty to take “all reasonable steps”, have been inferred where an export licence is required.^[10] Where a party is entitled to a bill of lading the bill must be delivered “forthwith” or as soon as it can conveniently be delivered.^[11] In an Australian case, a purchase “subject to finance” was read as requiring reasonable efforts to obtain finance.^{[12] [13]} That obligation was construed rather than implied.⁸

In international trade payment may be secured through documentary credits which guarantee payment by a bank on production of “conforming” documents such as bills of lading and/or invoices. In Garcia v Page & Co. Ltd, Potter J held as a matter of construction (Morris LJ referring to “true construction”) that: “the buyer must have such time as is needed by a person of reasonable diligence to get that credit established”. ⁸ This goes beyond strict necessity. The seller could ship without the credit and sue for the price (not always a practical proposition where the buyer is based overseas) but the absence of the credit relieves a seller of its obligations.⁸ As Todd observes, the “advantages ... are mutual. The seller [obtains] sure knowledge he will be paid ... The buyer can use a credit to raise funds.”^[14] Denning LJ ruled in Pavia &Co. v Thurmann-Neilson, without using implied-in-fact language: “the seller is entitled, before he ships the goods, to be assured that, on shipment, he will get paid”. He subsequently modified this to “the buyer must provide the letter of credit within a reasonable time before tire first date for shipment”.

In 1973 Manchester United bought the Scots striker Ted MacDougall from Bournemouth with a proviso that on his scoring 20 goals the final £25,000 instalment of the £200,000 fee (a Third Division record) became payable. They appointed a new manager, Tommy Docherty, whose plans did not include McDougall, who seldom played and who was sold at die end of the season. The 20-goal target was not reached and the £25,000 not paid. On appeal the £25,000 was determined to be due: “Manchester United were bound to afford Mr. MacDougall a reasonable opportunity of scoring 20 goals.”^{[15] [16] [17] [18]} In this case die “something” was that reasonable opportunity. Other impresarios have received the same treatment; Romilly MR found, construing an agreement reviewing its purpose and background, that an actor must “have an opportunity of shewing what his abilities were before a London audience”. As we can see the Courts use a mixture of mechanisms for inferring the duty or its content. In some, the matter is resolved by construction; in others by gap-filling.

To achieve high-level coherence and reflect actual outcomes, one could draft a supplement or explanation of the MvD principle when reasonable diligence or reasonable action is required to make a contract work:

Among the somethings which have to be done is the use of reasonable diligence in, and the undertaking of those things that are reasonably necessary to ensure that each party might properly perform its part of the contract.

• [1] Hick r Raymond & Reid [ 1893] AC 22 at 32.
• [2] Sparks r Biden (n. 62 above).
• [3] See for detailed treatment - Hudson at 3.127 and Sergeant and Wieliczko.
• [4] Merton London Borough Council v Stanley Hugh Leach Limited (n. 19 above) at 200 in (1986) 2 Const. LJ 189. At 123 Elisabeth Peden, Good Faith in the Performance of Contracts
• [5] ford v Cotesworth (n. 5 above) Blackburn J at 134. See also Sunbeam Shipping Co. Ltd p President of India (The “Atlantic Sunbeam”) [ 1973] Vol. 1 Lloyd’s Rep 482.
• [6] Kyprianou p Cyprus Textiles Ltd [ 1958] 2 Lloyds Rep 60.
• [7] Chitty on Contracts, at 14.025, citing AV Pound (n. 118 below) and Kyprianou (n. 82 above).
• [8] Société ¿’Avances Commerciales (London) Ltd i> A Besse & Co. (London) Ltd [1952] 1 Lloyd’s Rep 242, [1952] 1 TLR644 (QBD) Sellers J at 249. See Re Anglo Russian Merchant Traders & John Batt [1917] 2 KB 679 (AC) and Taylor & Co. v Landauer & Co. [1940] 4 All ER 335, 85 Sol Jo 119 (KBD) “steps necessary” at 341. Clive M Schmitthoff and others, Schmitthoffs Export Trade (12th edn, Sweet & Maxwell 2011 ) at 32 says that sellers are more likely to be "sufficiently acquainted” with relevant rules and practices.
• [9] Garcia v Page & Co. Ltd (n. 5 above) at 392 approved in MG Bridge and JP Benjamin, Benjamin’s Sale of Goods (Sweet & Maxwell 2014) at 12.084.
• [10] Trans Trust S.P.R.L. p Danubian Trading Co. [1951 T 507], [1952] 2 QB 297 (AC) Denning LJ at 306. See AJ Bateson, ‘The Duty to Cooperate’ (1960) JBL 187 at 189. See also Nichimen Corporation 1> Gatoil Overseas Inc. 1987 2 Lloyd’s Rep 46.
• [11] Barber v Taylor (1839) 5 Meeson Welsby 527 (Exchequer) - Parke B the bill should be delivered “forthwith”.
• [12] Meehan p Jones (1982) 149 CLR571.
• [13] AF Mason, ‘Contract, Good Faith and Equitable Standards in Fair Dealing’ (2000) 116 LQR 66 at 74-75 says “1 considered that there was an obligation on the purchaser to make reasonable efforts”.
• [14] Paul Todd, Bills of Lading and Bankers’ Documentary Credits (Lloyds of London Press 1998) at 22. See Ali Malek and David Quest, Jack: Documentary Credits: The Law and Practice Including Standby Credits and Demand Guarantees (4th edn, Tottel 2009) at 1.2.
• [15] Pavia &Co. v Thurmann Nielsen (n. 1 above) at 157.
• [16] Sinason-Teicher Inter-American Grain Corpn v Oilcakes & Oilseeds Trading Co. Ltd [ 1954] 3 All ER 468 at 472.
• [17] Bournemouth & Boscombe Football Club Ltd v Manchester United Football Club Ltd 1974 15 No 1531 (AC). At 66 Edwin Peel and Sir GH Treitel, Treitel on the Law of Contract, vol. 13 (Sweet & Maxwell 2011), refers to the case as one of prevention but it seems to require positive cooperation.
• [18] Fechter p Montgomery (1863) 23 Beav 22; (1863) 55 ER 274 at 276. See Kelly v Battershell [1949] 2 All ER 830.