Government Contracts

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TABLE OF CONTENTS

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1. Introduction……………………………………………………………………………………………3

2. Contract………………………………………………………………………………………………..3 3. Government Contract………………….………………………………………………………………3

4. Contracts and Government Contracts…………………...……………………………………………..4 5. Formation of Government Contracts…………………..…………………….………………………...5 6. Doctrine of Executive Necessity in Government Contracts………...………………………………....6 7. Doctrine of indoor management in Government contracts……….………………………………….8 8. Implied Contract with Government……………………………………………………………………8 9. Principles underlying Government Contracts………………………..………………………………10 10. Contractual Liability………………………………………………………….………………………12 11. Art. 299 of the Constitution and Sec. 65 of the Contract Act 1872……….…………………………12 12. Art. 299 of the Constitution and Sec. 70 of the Contract Act 1872………………………………….13 13. Other provisions of the Indian Contract Act 1872………………………...…………………………14 14. Judicial Review in Contractual Matters…………………………………...…………………………15 15. Lifting the Corporate veil in Government contracts…………………………………………………16 16. Tax Clearance for Government Contracts…………………………………..………………………..17 17. Challenges to Government Contracts………………………………………..……………………….17 18. Conclusion……………………………………………………………………………………………18 19. Bibliography…………………………………………………………………...……………………..20

Introduction

The subject of government contracts has assumed great importance in the modern times. Today the state is a source of wealth. In the modern era of a welfare state, government's economic activities are expanding and the government is increasingly assuming the role of the dispenser of a large number of benefits. Today a large number of individuals and business organizations enjoy lot of benefits in the form of government contracts, licenses, quotas, mineral rights, jobs, etc. This raises the possibility of exercise of power by a government to dispense contracts in an arbitrary manner. It is axiomatic that the government or any of its agencies ought not to be allowed to act arbitrarily and confer benefits on whomsoever they want. Therefore there is a necessity to develop some norms to regulate and protect individual interest in such government contracts and thus structure and discipline the government discretion to confer such benefits

Contract
A contract is an agreement enforceable by law which offers personal rights, and imposes personal obligations, which the law protects and enforces against the parties to the agreement. The general law of contract is based on the conception, which the parties have, by an agreement, created legal rights and obligations, which are purely personal in their nature and are only enforceable by action against the party in default. Section 2(h) of the Indian Contract Act, 1872[2] defines a contract as "An agreement enforceable by law". The word 'agreement' has been defined in Section 2(e) of the Act as ‘every promise and every set of promises, forming consideration for each other’ Contract is a promise enforceable by law. The promise may be to do something or to refrain from doing something. The making of a contract requires the mutual assent of two or more persons, one of them ordinarily making an offer and another accepting. If one of the parties fails to keep the promise, the other is entitled to legal recourse

Government Contract

A Government contract is a species of the genus contract and is governed by the same law of contract, the Indian Contract act 1872. However Government contract is a class by itself having its special and completely distinct considerations. In loose sense any contract to which Government is a party is a Government contract. As has already been discussed in the introduction Government contract is given protection because the contract involves public...
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