Back To Basics – Best Efforts v Reasonable Efforts v Commercially Reasonable Efforts

While drafting and negotiating commercial or investment contracts, we often encounter the phrases 'best efforts', 'reasonable efforts' and 'commercially reasonable efforts'.

Even though these phrases are not defined in the Indian Contract Act, 1872, or any related statute that governs the broader world of contracting principles in India – and there isn't enough jurisprudence that has emerged on their distinctions from Indian judicial pronouncements – their routine use is intended to reflect the differential standards of efforts to be employed in order to perform the corresponding obligation.

• Best efforts:
• • Highest standard of effort that a party needs to make
  • The party should have tried all possible ways to fulfil the associated obligation for which such efforts have been drafted, even if such effort causes hardship or includes difficult steps