Alternative payment during force majeure: what reasonable endeavours covers

Alternative payment proposals during a claimed force majeure event often sound practical, especially where both sides want supply and cashflow to continue. The harder question is whether the proposal actually helps the contract be performed on its existing terms, or instead asks one party to accept a different bargain. Under English law, that distinction matters when assessing what a reasonable endeavours proviso requires.

For contracts governed by English law in England and Wales, the leading point from RTI v MUR Shipping is that a commercially sensible substitute is not automatically something the other party must accept. A step that still produces the agreed payment may need serious consideration, but a change in currency or another departure from the agreed payment obligation raises a different issue: possible non-contractual performance and, in some cases, a voluntary variation.

Contractual performance and a proposed substitute

A force majeure clause is a contractual mechanism. The wording of the clause, the payment terms and the facts causing the disruption determine what it requires.

The key practical question is whether the proposed step would allow the party to perform the contract according to its existing terms, or whether it would replace those terms with something different. That is the line the Supreme Court focused on in the RTI Ltd v MUR Shipping BV judgment.

In that case, the contract required payment in US dollars. The suggested workaround was payment in euros, with conversion and loss protection intended to leave the recipient in the same financial position. The impediment described in the judgment was banking delay affecting US dollar payments, not a ruling that payment itself was legally impossible in every sense.

The Supreme Court held that, absent clear wording in the contract, reasonable endeavours to overcome the force majeure impediment did not require acceptance of that non-contractual substitute. The point of the reasonable endeavours proviso was to support continuation of contractual performance, not different performance.

That does not create a rule for every clause in every contract. It is a strong statement of principle for this kind of wording, but the actual clause, surrounding terms, and facts still control.

Why the distinction between enabling payment and changing payment terms matters

In practice, parties often blur two very different ideas.

The first is a step that enables the agreed payment to happen. For example, if the contract already allows payment to a different nominated account, or a practical step could remove a processing obstacle while still resulting in payment in the agreed currency under the agreed obligation, that may fall within efforts to maintain contractual performance.

The second is a change to the bargain itself. Moving from the agreed currency to another currency, changing the settlement route, splitting invoices in a new way, or treating a different transfer mechanism as full discharge may all amount to non-contractual performance unless the contract already permits them.

That is why it is risky to say, "there is no real loss, so the substitute must be accepted". The Supreme Court rejected the idea that a no-detriment substitute automatically answers the reasonable endeavours question. English commercial contracts place weight on certainty, agreed rights, and the ability to insist on the promised form of performance.

This is not a licence to refuse every workaround. A step that genuinely enables the agreed performance still needs consideration. But a permitted option is not automatically an obligation to use it: read the rights and duties together, rather than assuming that commercial flexibility gives up the right to the agreed payment.

Clear intention to give up an agreed right

Reasonable endeavours is directed to steps that could secure continuation or resumption of contractual performance. If the contract says payment must be in a particular currency, the core question is what reasonable steps might enable payment in that currency under the contract. It is not automatically about whether another arrangement would be commercially equivalent.

The judgment also said a party should not normally be treated as having given up a valuable contractual right unless the contract makes that clear. Importantly, the court did not limit that to express words only. Paragraph 44 allows clarity to arise either expressly or by necessary implication.

So you should avoid two extremes. One is assuming that reasonable endeavours always compels acceptance of a substitute if the economics match. The other is assuming the contract must contain a special express sentence before any departure from strict performance can ever be required. The wording and structure of the actual agreement still matter.

What to record when an alternative payment is proposed

If one side proposes a temporary payment change during a claimed force majeure event, the discussion record often matters as much as the proposal itself.

• Identify the exact contractual payment obligation said to be affected, including currency, timing and discharge wording.
• Describe the obstacle precisely. Is the issue delay, routing, account access, documentary requirements, or something else?
• Separate steps that may enable the agreed payment from steps that would change the agreed terms.
• Check whether the contract already permits any flexibility, such as nomination of accounts or agreed operational procedures.
• Record the proposed temporary solution, including who bears conversion risk, transfer charges and any shortfall.
• State whether the recipient will treat the alternative payment as full satisfaction of the invoice or only a provisional arrangement pending reconciliation.
• Note timing, evidence to be provided, and how the parties will return to the original payment terms once the issue ends.

This kind of record does not decide the legal position by itself, but it helps show whether the parties were discussing contractual performance, a temporary variation, or both.

When a temporary variation may be worth negotiating anyway

Even where a party is not compelled to accept non-contractual performance, a negotiated variation may still be the best commercial answer.

That is often true where both sides want continuity of supply, want to avoid escalating arrears, or need a short-term fix while payment channels recover. The legal point from MUR Shipping is about compulsion under a reasonable endeavours proviso, not about whether sensible businesses can voluntarily agree a practical workaround.

Points commonly worth discussing include duration, exchange rate mechanics, bank or platform fees, when payment is treated as received, whether any top-up is needed after conversion, how invoices and credit notes will be reconciled, and the trigger for reverting to the original terms.

You should also think about authority and documentation. The contract may contain requirements about who can agree changes, how notices must be given, or whether conduct could be argued to create a waiver. Those issues are very contract-specific, so a lawyer should check the formalities and any continuing duties before either side relies on an informal arrangement.

How to test an alternative payment proposal against the contract

A useful starting point is to separate operational mechanics from legal substance. Reasonable endeavours is aimed at overcoming the impediment to contractual performance, but whether it requires any particular step depends on the clause wording, the payment machinery already built into the contract, and the facts causing the disruption.

As a practical recommendation, compare the proposal against the payment clause line by line: currency, account details, timing, discharge wording, fees and any nomination or routing flexibility. Then ask whether the proposal still ends with the agreed contractual payment, or whether it asks the recipient to accept a different mode of performance.

Two hypothetical contrasts

Hypothetical proposal 1: the contract requires payment in US dollars and already allows the seller to nominate a replacement receiving account. A sanctions-related banking delay affects one route, so the payer proposes sending the same US dollar amount to a newly nominated account through a different correspondent bank. That kind of step may still be directed at contractual performance, because the agreed currency and discharge obligation remain the same.

Hypothetical proposal 2: the same contract requires payment in US dollars, but the payer proposes paying in euros, with a conversion formula and an undertaking to cover any shortfall. That may be commercially attractive, but it calls for assessment of non-contractual performance and whether the parties should agree a voluntary temporary variation.

In either situation, it is usually worth keeping a clear record as a recommendation: what obstacle is said to exist, why the proposed step is said to solve it, whether the recipient accepts it as full discharge, who bears costs or exchange risk, and when the parties revert to the original payment terms. That kind of record helps show whether the discussion stayed within the contract or moved into a negotiated variation.

What this decision does not let either side assume

The case does not mean a force majeure notice is automatically valid. It does not remove the need to show the contractual trigger, causal link, evidence, and any notice or mitigation steps required by the agreement.

It also does not give a universal right to stop supply, terminate, suspend obligations, or withhold payment. Whether those responses are available depends on the contract and the wider legal position.

Just as importantly, this article does not deal with sanctions compliance advice, or with Scottish or Northern Irish law. The discussion here is limited to English law commercial contracts and the reasonable endeavours issue around alternative payment during a claimed force majeure event.

Key Takeaways

• Under English law, the key question is whether the proposed workaround still achieves payment as the contract requires, or instead substitutes a different form of performance.
• In RTI v MUR Shipping, the Supreme Court held that, absent clear wording, reasonable endeavours did not require acceptance of payment in a different currency from the one agreed.
• A no-detriment or economically equivalent substitute does not automatically answer the reasonable endeavours question.
• Whether a step is required still depends on the actual force majeure clause, payment terms and surrounding facts.
• Clear intention to give up a valuable contractual right may arise expressly or by necessary implication, not only through special express words.
• It is sensible to record the exact payment obligation, the obstacle, any flexibility already allowed by the contract, and whether a proposed workaround is contractual performance or a temporary variation.

If you are weighing up a proposed currency change, a temporary payment mechanism, force majeure notices, or a short-form variation record, Sprintlaw UK's legal team can help review the contract and the practical options. Call 08081347754 or email team@sprintlaw.co.uk.