Q. With reference to Contracts exercised by the Union government, consider the following statements:
1. They must be executed by such person or in such manner as the President may direct or authorize.
2. President is not personally liable in respect of any contracts executed in his name.
Which of the above given statements is/are correct?

[A] 1 Only

[B] 2 Only

[C] Both 1 and 2

[D] Both 1 and 2

Answer: C
Notes:

Exp) Option c is the correct answer

Under the exercise of its executive power, the Union or a state can enter contracts for the acquisition, holding and disposal of property, or to carry on any trade or business, or for any other purpose. But the Constitution lays down three conditions which must be fulfilled by such contracts:

  • They must be expressed to be made by the president or governor, as the case may be;
  • They must be executed on behalf of the president or governor, as the case may be; and
  • They must be executed by such person or in such manner as the president or governor may direct or authorize. Hence, Statement 1 is correct.

Statement 2 is correct: The president or the governor is not personally liable in respect of any contract executed in his name. Similarly, the officer executing the contract is also not personally liable. This immunity is purely personal and does not immunize the government from contractual liability, making the government suable in contracts.

 

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