Contractual Liability of the State: A Comparative Analysis

The State is a multi-dimensional being that exists and operates in different spheres with different characteristics. In International Law, State is a sovereign which has the power to dictate the Laws by which it would be bound, whereas in Indian Municipal Law or Domestic Law, the Constitution is Suprema Lex and nothing, not even the State is above it. The Constitution of India prescribes and governs the manners in which the Indian State will interact with external stimuli within which includes the existence and functioning of the State as an individual entity that has the capacity to enter into contractual relations with any public, private, or individual entities in the Indian terrain. As in the case of any other entity, a contract entered into by the Indian Government can be enforced against it, provided all the pre-requisites of a valid contract are fulfilled, alongside the public policy element which is an addition to the existing contractual norms when it comes to contractual liability of the Indian Government. This article analyses the Contractual Liability of Indian Government in context of the Constitutional provisions and judgments rendered by the Constitutional Courts of the Country, as well as compares them to different jurisdictions across the globe.