Government As A Contracting Party.pptxxxx

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1. Government As A Contracting Party

2. Government Contract A Contract in which the Central Government or a State Government is a party to the Contract is called a “Government Contract.”

3. Basic points of Government Contract It is not possible to communicate it orally . It is a mandatory rule that it should be in written form . For government contracts, there should be at least one government party, like the State Government or the Central Government .

4. Constitutional Provision in Respect of Government Contracts Under Article 298 of the Indian Constitution , under the exercise of its executive power, the Union or a state government can enter into contracts for the acquisition, holding, and disposal of property, or to carry on any trade or business, or for any other purpose. Article 299 of the Indian Constitution states how the government contract is made and who will be liable in case of breach of the government contract.

5. Simple Interpretation of Article 298 It states that the government can enter into contracts as a contracting party . It also states that the government can sue and can be sued if any conflict happens.

6. Simple Interpretation of Article 299 If a contract is made with the central government, it should be expressly made by the president. If a contract is made with the state government, it should be expressed in the name of the governor. The president will not sign the contract; he will authorize an IAS or SDM to sign that contract. The president will give proper manner on how the contract should be made .

7. Case Laws Air India Ltd. v. Cochin International Airport Ltd. (2000 ) Facts : Cochin International Airport Ltd. had entered into a contract with Air India for the use of certain facilities at the Cochin airport. However, due to a change in government policy, Air India terminated the contract before its expiry and Cochin International Airport Ltd. sued Air India for breach of contract . Judgment: The Kerala High Court held that the contract was not binding on Air India as it had been made subject to certain conditions and limitations imposed by government policy under Article 298 of the Constitution. The court held that the government had the power to modify or cancel the contract and Air India was therefore not liable for breach of contract.