Whenever states are parties to any contract, the courts attempt to distinguish such contracts with that of contracts entered between private individuals or parties. In that, private contracts concern personal interest; state contracts concern public good and public interest and is expected to act reasonably and not with freedom of discretion.
In such cases, the higher court apply which of the following doctrine?
In such cases, the higher court apply which of the following doctrine?
Answer & explanation
Correct answer: option 2
The courts have often used the principle of reasonableness in most cases that involve state action. The realm of contract law offers an example. Whenever states are parties to any contract, the courts attempt to distinguish such contracts with that of contracts entered between private individuals or parties. In that, private contracts concern personal interest; state contracts concern public good and public interest and is expected to act reasonably and not with freedom of discretion