Government Contracts

Every contract must comply with all requirements of the Indian Contract Act, and a contract with
Government is no exception. However, governemnt contracts raise issues and problems which do not,
and cannot, arise issues and problems which do not, and cannot, arise in contracts between private
individuals. If strict requirments are not prescribed by law for such contracts, clandestine contracts
made by public servants may become very common.

Article 299 of the Constituion of India, therefore, prescribes a specific procedure enabling the agents
of the governemnt to make conracts in order to bind the government. Art. 299(1) of the Constitution
lays down that all contracts made in the exercise of the executive power of the Union or a State shall
be expressed to be made by the President or the Governer, respectively. They are to be executed on
behalf of the President or Governer by such persons and in such manner as may be prescribed. Art.
299(2) then provides that neither the President not the Governor, nor the person actually executing
such a contract becomes personally liable under such a contract.

Prior to India's independence, a similar provision was contained in S. 175 of the Government of India
Act, 1935, which provided that such contracts shall be made in the name of the Governer- General,
and executed on his behalf in the prescribed manner and by the authorised persons