Reliance Defence Scam: A Study in Privity of Contract

Recently, the Reliance Defence scam made headlines when it was alleged that the company had entered into a 'deal' with a few defence officials to gain favour in a tender. But what happened was that these officials used the 'promise' made by Reliance Defence to further their own interests. Now, this is where Contract Law comes in, specifically 'Privity of Contract'. As per Section 40 of the Indian Contract Act, an agreement not made in writing and signed by both parties is not enforceable. Which leads to Section 25: An agreement is a contract if it is made by the free consent of parties concurring entirely at the same time and it is made for a lawful consideration. Here, the officials can't rely on the agreement since it wasn't signed by them. Simple contract law, yet a billion-dollar scam!