Friday, March 12, 2021

Acceptance under Ethiopian Contract Law

 Acceptance (Art 1681-1685, 1689(1), 1694) (1893(3)

Acceptance is a positive response to an offer i.e. it is a declaration of intention to be bound by each and every contents of an offer. In short acceptance is a “Yes” answer to all the contents of the offer. Any slightest modification made to the content of the offer is considered as rejecting the offer and making, an alternative offer (Art.1694)

So the offeree must take care in giving response to an offer. He has three alternative answers to an offer, the “yes” answer which means accepting the offer as it was made; the “No” answer which means totally rejecting the offer or “acceptance with reservation” which means having reservation or alternative proposals for some of the contents of the offer. So “where acceptance is made with reservation or does not exactly conform to the terms of the offer” the offeree must remind himself that he is taking the position of the offeror and the offeror then becomes an offeree (Art. 1694). That means the offeree (the current offeror) is bound by the new offer he makes until the time limit he fixes for acceptance expires (Art. 1690(1) or until he reasonably expects the other party to decide on the new offer (Art.1691(1).

Eg.1 Abebe wrote the following e-mail message to Tuffa”


“Dear Tuffa, how are you doing? I am very fine, I am going to sale my Toyota Land cruiser, 99 model automobile to you to birr 30,000. Delivery and payment date is on January 20, 2008 In Addis Ababa”

Tuffa may respond in any of the three ways.

“Thank you, I am lucky to buy your car.”

             “Thank you for your concern, but I do not need any automobile now!”

             “Thank you. I am very much happy to buy your car but the delivery place should be in Awassa”


Acceptance How acceptance is Made


Since acceptance is communication of intention, like an offer, it can be made in all possible ways of communication. So, the offeree can use writing, oral, sign or conduct as a means of communication. The medium of communication never matters. The offeree may use letter, press, telex, email, etc to communicate his acceptance in writing. He may also use telephone, telegram, video, radio, television etc as a medium of oral communication. Signal communication is showing certain publicly known physical gesture such as shaking the hand of the offeror, nodding head or using certain objects publicly used to indicate intention(Art.1688(2). Signal communication usually requires the physical presence of both the offeror and the offeree at the same time and at the same place. 


Communication of acceptance by conduct means performing partly or fully the obligation proposed by the offer or benefiting from the rights proposed by the offeror.


E.g1   If a person who is offered to buy a certain goods comes and takes some or all of the goods or if he pays part or all of the price of goods, such act may be interpreted as an acceptance by conduct.


Generally, an acceptance can be given provided the offeree knows the existence of the offer. Acceptance is declaring agreement which presupposes knowledge of the obligation for which the agreement is given. However; if the offer is public promise of reward the offeree is not known to the offeror; hence whosever performs the promise is considered as if he accept by conduct regardless of his knowledge of the existence of the offer (Art. 1689(1).


Incidentally Art.1689 lacks clarity and may be rewritten as follows:


 Art. 1689 Public Premise of reward

A Promise published in any manner to reward a person who will find an object which has been lost or who will perform certain act shall be an offer.

Such offer shall be accepted where a person brings the object back or performs the act, notwithstanding that he did not know the offer.


Duty to Respond (Art. 1682 -1685)

 

The offeree does not have a duty to give response to the proposal of the offeror. He can respond negatively or positively only if he wants to respond otherwise he may for example read an offer and simply throw it in a dust basket or tear it off by reading only the address of the letter. That means the offeree has the right to remain silent; no one is allowed to disturb his peace. Moreover; if the offeree remains silent there is no assurance that the offer was brought to his attention; he might have not known the existence of offer. Therefore silence shall not amount to acceptance (Art. 1682). It should not be taken as a signal indication of acceptance.


However, in the following cases the offeree has a duty to respond a “no” answer if he does not want to be bound by an offer, otherwise his silence may be taken as a sign of acceptance by the offeror.


a. Duty to accept: - sometimes a law or contract may impose on the offeree the obligation to accept offers made to it. This is mainly when the offeree is a monopoly supplier of goods or provider of services. Some public enterprises are established by law to provide goods and services to the public, hence they are duty bound to accept an offer from the public. For example, Ethiopian Electric Power Corporation, Ethiopian Telecommunication, Water & Sewerage Authorities are expected to accept offer for electric use, telephone line and pipe line. If they do not want to be bound by the offer they have to notify with in time specified in the offer, if any (Art. 1690(1) or within a reasonable time (Art 1691(1). Otherwise their silence is considered as an acceptance (Art.1683).


Private Business Enterprises may also have a contractual relation with state agency to supply certain goods or provide services to the public (see Art.3207-3243 which provides about contract of concession). In such case the concession (the contract between the business Enterprise and state organ) may lay down the content of the contract that will exist between the Business enterprise and the service seeker.


E.g. Addis Ababa City Administration and Cleaner Private Limited Company agree as follows;

Art. 1 Addis Ababa City Administration shall pay Birr 2,500,000 to the Company at the beginning of each fiscal year.

Art.2 The Company shall give toilet service at a distance of 1km in every Asphalted road.

Art 3. The Company shall provide toilet papers to the service seekers.

Art.4 The Company may charge only ten cents for one time use of the toilet service.


This contract may be taken as a concession contract as it defines the obligation of the company and the service seekers in advance. So, the offer of the service seeker is limited only to declare his intention to be bound by the contract whose object was already defined, by the government. In short the offer of the service seeker contains only his intention to be bound and his request to the offeree to agree to be bound. So if such offer is made the silence of the offeree will be taken as an acceptance.


In addition to those bound by law or concessions, a person may have a contractual obligation to accept an offer made to him as per his contractual obligation. This is in line with Art 1711 and Art. 1957.  So in such case also silence is taken as acceptance. So such offeree has an obligation to respond to the offeror if he does not want to be bound by the offer.


N.B.  The literal meaning of Art.1683 is that once offer is made, acceptance is automatic. Sub Article 1 declares that when a party is bound by law or concession to accept “no acceptance shall be required”. This is further strengthened by sub – art 2 which states that “the contracts shall be complete upon the receipt the offer” thereby implying that the offeror can claim performance of the contract once the offer is delivered to the offeree. 


However; such interpretation seems to be illogical for the following reasons:

Contract depends on agreement of contracting parties. There is no contract without consent. The level of consent may be highly limited but should not totally be avoided. So the offeree should at least be given the chance to study whether or not the offer has been made as per his legal or contractual obligation. So the mere reception of the offer may not complete the contract and the offeree should be given the chance to say “ok” or “No” for the offer. So Art. 1683 (2) indicates date of conclusion of contract only so far as the offer was not rejected.

                  

The offeree may lack resource to accept the contract. For example, many customers may apply to Ethiopian Telecommunication to get telephone line but the corporation may not have resource to meet the demand..

                  

The offeree may have legal or contractual or legal authority to stream line offerors. In principle, Ethiopian Electric Power Corporation has to supply electric power service to every person who demands the service. But when offerors are many, the Corporation may give priority to investors.

      

The offeree can refuse to perform his contractual or legal obligation In such case the offeree may be responsible for breaking its legal or contractual obligation for not accepting the offer but it is difficult to conclude that it automatically accepts offer declared to it.


Therefore Article 1683 should be understood as imposing an obligation to respond to an offer. Such conclusion is in line with Art. 1682 and 1684 i.e. Art 1683 is an exception to the right to remain silent. So Art.1683 should be amended as follows.

Art. 1683-2 Duty to Accept


Where an offeree has legal or contractual duty to accept an offer the offer shall be deemed to have been accepted unless the offeree rejects the offer with in time specified in the offer or where no time is specified within reasonable period. 


B .Preexisting Contractual Relation Silence may also amount to acceptance where

the content of the offer is to vary, supplement or complement preexisting contractual relation (Art. 1684 (1). Variation of a contract means changing, modifying or avoiding some of the provisions of the contract. Variation of contract itself is a contract and hence needs consent of parties. So, one of the parties may offer such variation. For example, in a sale contract, the buyer may offer to change the delivery date. Supplementary or subsidiary contract is a contract that may exist independently but that help to facilitate the implementation of preexisting contract. E.g. you bought a cloth and the seller offers you to tailor the cloth; you bought goods and the seller offers you to provide transport service; Photocopier proposes to bind the paper it has photocopied; a contractor who builds the house proposes to construct a fence for the same building. Completing a contract means some of the issues not settled in the preexisting contract be agreed up on again. For example parties in a sale contract agreed to be bound by the sale (Art 1695) but not determined place of delivery. Any party to such contract may make an offer concerning place of delivery. If the offer is accepted it complements or completes the preexisting contract. Complementary contract is subordinate on the main preexisting contract.

 the offer is made in writing. In principle offer can be made orally, in writing, by sign or conduct depending on the preference of the offeror. But silence can be interpreted as acceptance only if the offeror uses written form of communication that is addressed directly to the offeree (Art 1684(2).

the offer should be written on special document (Art 1684 (2). The document that contains the offer should contain nothing else than the offer. So offer written on the back of an invoice should not be deemed to have been accepted by silence (Art.1685). Moreover, offer should be written on a paper. E-mail is not a document. 

The offer contains warning that silence amounts to acceptance. The offeror should also expressly indicate in his offer that he considers the silence of the offeree as acceptance after expiry of time limit indicated in the offer Art. (1690(1) or reasonable period (Art.1691 (1) (Art 1684 (2)

So if the above four conditions are fulfilled both the offeree and offeror can   claim that silence amounts to acceptance

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