In whose name all the contracts of Government of India are concluded?

December 6, 2009 November 4, 2017
The answer of this question lies with article 299 of the Indian Constitution and Indian Contract Act 1872.
The Indian Contract Act, 1872 does not prescribe any form for entering into contracts. A contract may be oral or in writing. It may be expressed or be implied from the circumstances of the case and the conduct of the parties. However the position is different in respect of Government Contracts. A contract entered into by or with the Central or State Government has to fulfill certain formalities as prescribed by Article 299 of the Indian Constitution.

Government Contracts the provisions of Article 299(1) must be complied with, but that does not mean that the provisions of the Indian Contract Act have been superceded. This article provides :

1. All contracts made in the exercise of executive power of the union or a state shall be expressed to be made by the President or by the Governor of the State as the case may be, and all such contracts and all assurances of property made in the exercise of that power shall be executed on behalf of the President or the Governor by such person and in such manner as he may direct or authorize.

2. Neither the President nor the Governor shall be personally liable in respect of any contract or assurance made or executed for the purpose of any enactment relating to Government of India hereto before in force , nor shall any such contract or assurance on behalf of any of them be personally liable in respect thereof.

In this way Article 299 has laid down three conditions which the contracts made in the exercise of the executive power of the Center or a State must fulfill to be valid –

  1. The contract must be expressed to be made by the president or the Governor as the case may be;
  2. These contracts made in the exercise of the executive power are to be executed on behalf of the President/Governor as the case may be; and
  3. The execution must be by such person and in such manner as the President or the Governor of the case as the case may be, may direct or authorize.
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