Best Efforts vs Reasonable Efforts in Indian Contracts: The Standard You Owe

"Best efforts," "reasonable efforts," and "commercially reasonable efforts" are promises about how hard you must try, not promises that you will succeed. A clause saying a party will use "best efforts" to get a regulatory approval, close a deal, or find a buyer does not guarantee the approval, the deal, or the buyer; it sets a standard for the trying. The mistake most people make is treating these words as interchangeable filler a lawyer inserted out of habit. They are not filler. Indian courts read them as real obligations, and picking the wrong one, or leaving it undefined on something that matters, changes how much you owe. Adira, which publishes this guide and sells contract review and CLM software, has a commercial reason to want you to understand clauses like this one well; the explanation below stands on its own, whatever tools you use.

Plain meaning

Contract lawyers split obligations into two rough types. Obligations of result promise an outcome, full stop: "Seller shall deliver 500 units by 30 June" does not care how hard delivery was; either the units arrive or Seller is in breach. Obligations of effort promise a level of trying, because the outcome depends on something you do not fully control. "Seller shall use best efforts to obtain FSSAI approval for the product" recognises Seller cannot force a regulator's hand; the promise is about the quality of the attempt.

Three phrases dominate Indian and international drafting, usually assumed to sit on a ladder from weakest to strongest: reasonable efforts, then commercially reasonable efforts, then best efforts. That ordering is useful shorthand, not a fixed rule. Indian courts have not laid down a rigid grading system, and even jurisdictions that have tried harder to build one still argue over the details.

Who it protects and what triggers it

An efforts clause protects the party depending on someone else's cooperation to reach an outcome neither side can unilaterally guarantee. The obligor owes the effort; the obligee is entitled to expect it. It guards against an obligor who simply gives up, or does the bare minimum while claiming the outcome was "out of their hands."

It bites the moment the underlying event fails to happen and the question becomes why. If an approval never comes or a deal never closes, the clause decides whether that is bad luck (no breach) or a failure to try properly (breach). Before that point it imposes no separate duty to report or act; it only supplies the standard conduct is measured against once the outcome fails.

What to look for

Four things decide how much an efforts clause actually asks of you, none visible if you only skim for the word "best" or "reasonable."

1. Which phrase, and is it defined. "Best efforts," "reasonable efforts," and "commercially reasonable efforts" are not synonyms. A clause that also lists a few required actions turns a vague standard into something checkable.
2. Whether spend is capped. Does the clause exclude costs "disproportionate to the value of this Agreement," or is spend open-ended? At the high end, "best efforts" has required real money spent, not merely reasonable money.
3. Whether the obligor must act against its own interest. Most authority, including the English cases Indian courts draw on, holds even a "best efforts" obligor need not bankrupt itself. A clause overriding this ("regardless of cost or effect on Obligor's business") is unusually harsh.
4. What evidence of effort looks like. A reporting duty and dated milestones, or nothing beyond the bare phrase? This matters more in India, for reasons the next section explains.

The Indian position: no statutory grading, real obligation

"Best efforts," "reasonable efforts," and "commercially reasonable efforts" are not defined anywhere in the Indian Contract Act, 1872. No Section hands you a checklist for what "best" requires versus "reasonable." What the Act gives you is the general rule that a promise, whatever its content, must be performed. Section 37 states it plainly:

"The parties to a contract must either perform, or offer to perform, their respective promises, unless such performance is dispensed with or excused under the provisions of this Act, or of any other law." Source: Section 37, The Indian Contract Act, 1872 (Indian Kanoon)

Applied to an efforts clause, the "promise" you must perform is the promise you actually wrote. If it promised trying, to a stated standard, then performance means making that effort, and failing to reach the goal despite genuinely trying is not, on its own, a breach. The flip side matters just as much: if the obligor did not really try, "success was always going to be hard" is no defence either.

There is a second, quieter statutory point that shapes what happens if an efforts clause is breached. The Specific Relief Act, 1963, as substituted by the 2018 amendment, lists contracts an Indian court will not specifically enforce, that is, will not order a party to actually go and do. Section 14 includes:

"a contract, the performance of which involves the performance of a continuous duty which the court cannot supervise." Source: Section 14, The Specific Relief Act, 1963 (Indian Kanoon)

An obligation to keep trying over months fits the textbook example of a continuous duty a court cannot supervise. In practice this pushes the remedy toward damages, not an injunction forcing the obligor to try harder from tomorrow. That is exactly why the drafting details above matter: since a court will not supervise ongoing performance, a clean paper trail is often the only real way to prove a breach after the fact.

A named case: Manika Sett v. Sett Iron Foundry

Because Indian statute is silent on grading effort standards, and reported case law is thin, the Calcutta High Court's decision in Smt. Manika Sett v. Sett Iron Foundry and Ors. (A.P. No. 80 of 2020, decided 28 July 2022, Saraf J.) is worth knowing, even though the dispute was not a commercial "best efforts" clause. It arose from an arbitration application under Section 11(6) of the Arbitration and Conciliation Act, 1996, over a partnership deed whose dispute-resolution clause said "every effort should be made by the partners to settle the dispute by arbitration" before going to court.

The question was whether "every effort" was narrower or wider than "best effort." The court held "every effort" is "much wider in nature in comparison to the phrase 'best effort'," so the duty to attempt arbitration first had to be read broadly. To reach that, the court reached for English authority, quoting Rhodia International Holdings Ltd. and Rhodia UK Ltd. v Huntsman International LLC [2007] EWHC 292 (Comm), an English Commercial Court decision on a "reasonable endeavours" clause:

"An obligation to use reasonable endeavours... probably only requires a party to take one reasonable course, [while] an obligation to use best endeavours probably requires a party to take all reasonable courses."

Read the judgment on Indian Kanoon. The takeaway is not the "every effort" ranking itself; it is the method. With no developed Indian doctrine, the court reached directly for English precedent. That makes this the practical Indian test right now: reasonable efforts asks for one reasonable course; best efforts asks for all of them a determined party could realistically take.

Red flags

Normal	Red flag	Why it matters
Efforts language for something outside your full control (a regulator's decision, a third party's consent)	Efforts language for something within your own control, like paying an invoice on time	Turns a plain, keepable promise into an argument over what "best" meant
The clause names a few illustrative actions and dates	A bare "best efforts" or "reasonable efforts," on a critical obligation, with no elaboration	No benchmark for enough; since courts will not supervise performance, disputes become one word against another's
Spend is capped, or excludes costs disproportionate to the deal	No cost ceiling, or a duty to spend "any amount necessary"	Left open, "best efforts" can require real, uncapped spending
An efforts duty is paired with a hard backstop (a walk-away date, a fee) if the outcome fails	No fallback for a deal-defining outcome; both sides are stuck indefinitely	Efforts is a process obligation, not a result guarantee
A reporting or cooperation duty is spelled out	No reporting mechanism; the obligee learns effort was inadequate only after the deadline passes	With specific performance largely unavailable, records are often the only real enforcement tool
The efforts standard is used consistently for similar obligations	"Reasonable efforts" here, "best efforts" for a near-identical duty nearby, no apparent reason	A court can read the difference as deliberate, a higher standard agreed without notice
The obligor need not act against its own legitimate interest	The clause overrides this, requiring action "regardless of cost or effect on Obligor's business"	Pushes even "reasonable efforts" toward an unconditional guarantee
"Commercially reasonable efforts" is defined once and used consistently	Used as though it obviously ranks below "reasonable efforts," when that ranking is disputed	Relying on an assumed hierarchy is riskier where Indian courts have almost no domestic guidance

Bad clause versus better clause

Bad: "Seller shall use best efforts to obtain all governmental approvals required for the transaction."

What is wrong: no list of what "best efforts" requires, no cost cap, no deadline, no duty to keep Buyer informed, and no fallback if approvals never come. If the deal collapses two years later, both sides argue from scratch, with nothing written down about what Seller actually did.

Better: "Seller shall use best efforts to obtain the approvals listed in Schedule 3, including filing all applications within 15 Business Days of this Agreement, responding to any regulatory query within 5 Business Days of receipt, and providing Buyer a written status update every 30 days. Seller's obligation does not require incurring costs exceeding INR 25,00,000 in aggregate, or accepting a condition materially more onerous than in the draft applications at Schedule 3. If the approvals are not obtained within 180 days, either party may terminate this Agreement by written notice, and Clause 19 (Termination) shall govern the consequences."

What changed and why: naming the approvals and milestones turns "best efforts" into facts a court can check, since ongoing performance itself will not be supervised. A cost ceiling caps the open-ended exposure. The reporting duty creates a contemporaneous record instead of a reconstruction two years later. The 180-day backstop supplies the certainty of outcome an efforts clause cannot give on its own.

How it interacts with related clauses

An efforts clause rarely stands alone; it usually sits next to clauses that decide what happens depending on whether the effort succeeds.

• Conditions precedent. Efforts clauses often attach to conditions precedent in M&A and financing deals, where a party must use best efforts to satisfy a condition (regulatory clearance, a consent) before closing. Conditions precedent decides what happens if the condition is not met by the long-stop date; the efforts clause decides whether the trying party can be blamed.
• Force majeure. Easy to confuse, but different work. Force majeure excuses non-performance caused by an event outside either party's control. An efforts clause never excuses non-performance; it defines what "performance" requires when the outcome is not fully controllable. "We tried our best" is not force majeure.
• Limitation of liability. A breached efforts clause can cause a large, hard-to-quantify loss. Check whether the liability cap on the rest of the contract also caps damages here, and whether that fits how consequential the outcome was.

You do not need a lawyer to spot the gaps in a plain efforts clause. You can mark up whether a "best efforts" promise has a cost cap, a deadline, and a reporting duty, free, using Weave.

US and global contrast

US courts, particularly in Delaware, have tried harder than Indian courts to build a graded hierarchy: reasonable efforts, then commercially reasonable efforts, then best efforts. Even there the case law is inconsistent, and commentators on Delaware "efforts" jurisprudence argue the ladder does not hold up cleanly.

Two older US cases are still cited often. In Bloor v. Falstaff Brewing Corp., 601 F.2d 609 (2d Cir. 1979), the Second Circuit held a "best efforts" obligor could not stop trying once profit maximisation became inconvenient; the standard was an "average prudent" business, not its own strained finances. In Gilson v. Rainin Instrument, LLC (W.D. Wis. 2005), the court held "best efforts" has diligence at its core, more exacting than ordinary good faith.

England, whose case law Indian courts have themselves imported, as in Manika Sett above, draws a similar line: "best endeavours" requires every reasonable course a determined party would take, short of ruining its own business; "reasonable endeavours" needs only one. None of this is Indian law by itself, but it is persuasive reasoning Indian courts have shown willingness to reach for.

FAQ

Is "best efforts" enforceable in an Indian contract? Yes. Nothing in Indian law treats it as vague filler. Under Section 37 of the Indian Contract Act, 1872, it is a real promise that must be performed, and a court can find it breached if the obligor did not genuinely make the required effort, even though the outcome was never guaranteed.

What is the difference between "best efforts" and "reasonable efforts" in India? Indian statute does not define either term. Based on reasoning imported from English case law, most recently the Calcutta High Court's 2022 decision in Manika Sett v. Sett Iron Foundry, "reasonable efforts" likely requires one reasonable course of action, while "best efforts" requires all the reasonable courses a determined party could take.

Does "best efforts" require a party to spend money it does not want to spend? Generally no; an obligor need not act wholly against its own commercial interest or spend itself into serious harm even under "best efforts." But without a cost cap written into the clause, this line is unclear, and worth negotiating rather than assuming.

Can I get a court order forcing someone to try harder under an efforts clause? Unlikely. Section 14 of the Specific Relief Act, 1963, excludes specific enforcement of a contract "involving the performance of a continuous duty which the court cannot supervise," which describes an ongoing efforts obligation well. The realistic remedy in India is damages, not an order compelling further trying.

What does "commercially reasonable efforts" mean, and is it weaker than "reasonable efforts"? It is usually understood as a cost-benefit lens on top of a reasonable-efforts standard, but whether it ranks above or below plain "reasonable efforts" is genuinely disputed, even abroad. Do not rely on an assumed ranking; define what the obligor must actually do instead.

Should I ever use an undefined efforts clause for a critical obligation? No. Pair it with a defined list of required actions, a cost ceiling, a reporting duty, and a hard backstop date with a stated consequence, as shown in the rewritten clause above.

This guide explains what "best efforts," "reasonable efforts," and "commercially reasonable efforts" generally require under Indian law, and the statutory and case-law reasoning Indian courts use to interpret them. It does not tell you whether a specific efforts clause in your contract has been satisfied, or what a court would decide on your facts, that depends on the wording, the industry, and what the obligor actually did, and is not legal advice. Talk to a lawyer before you rely on, or sign away, an efforts standard on an outcome that matters to you.