"Evergreen" clauses are those provisions of a contract which allow for the continued supply of goods or services until such time as notice of termination is given. 

In a recent judgement the High Court reminded contracting parties that not only are evergreen clauses enforceable, but that proper notice of termination must be given.  The outcome of this judgement was that Marks and Spencer plc was ordered to pay maintenance fees totalling £135,844 (excluding VAT) to DataDirect Technologies Ltd, a subsidiary of Progress Software Corporation.

Summary

In the recent decision of Rhodia International Holdings Ltd v Huntsman International LLC [2007] EWHC 292 (Comm) the Commercial court came to the conclusion ‘as a matter of language and business common sense’ that there is a difference between ‘best endeavours’ and ‘reasonable endeavours’. 

This is comforting for those of us who regularly use these two terms in contracts to impose or accept two different levels of obligation or responsibility.

Therefore, according to Rhodia International:

• there is a distinction between best endeavours and reasonable endeavours, with each lying at the opposite ends of the spectrum,

• ‘all reasonable endeavours’ is either equivalent to ‘best endeavours’ or (more likely) in between the two, and

• where you have to use ‘reasonable endeavours’ but specific steps are provided for then those specific steps have to be undertaken even if this prejudices your commercial interests; but if no steps are specified then you do not need to prejudice your commercial interests.