High Court Updates "Reasonable Endeavours": Commercial Interests Vs An Obligation Owed


Electricity Generation Corporation v Woodside Energy Ltd; Woodside Energy Ltd v Electricity Generation Corporation [2014] HCA 7 (5 March 2014) -


- The High Court has, by a 4:1 majority, held that Woodside Energy Ltd and other gas suppliers in Western Australia (the Sellers) did not breach their obligation under a Gas Supply Agreement to use "reasonable endeavours" to make additional quantities of gas available to the Electricity Generation Corporation t/as Verve Energy (Verve).

- The Court has reaffirmed its approach to the interpretation of commercial contracts that such contracts should be given a business-like interpretation on the assumption that parties intended to produce a commercial result.

- Viewed in this light, contractual obligations framed in terms of "reasonable endeavours" do not oblige a party to forego or sacrifice their business interests.

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Topics:  Australia, Breach of Contract, Oil & Gas

Published In: General Business Updates, Energy & Utilities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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