OFFER AND ACCEPTANCE – CONCLUSION OF DISTANCE SELLING CONTRACTS
Croatian Civil Obligations Act (Official Gazette 35/05, 41/08, 125/11, 78/15, 29/18, further in text: the Act) regulates the rights and obligations of the offeror and the offeree when giving and receiving an offer, as well as the form and methods of submission of offers and acceptance of offers.
Today, the most communication between business partners and contracting parties takes place electronically. Therefore, the question arises when such correspondences, or agreements on the stipulation of the contract, actually constitute an offer and acceptance of the offer, and at which time the parties are deemed to have concluded the contract.
The Act states that the contract was concluded electronically when the contracting parties agreed on the essential elements of the contract. What are the essential elements of a contract will depend on the type of contract. For example, the essential elements of the sales contract are the object of purchase and the price; the essential elements of the service contract are the determination of the works and the price, while the lease contract must define the object of the lease and the amount of the rent, etc.
For the conclusion of a contract, it is important that the parties have declared their intent, which can be expressed by word, the usual signs or other behaviors (conclusive acts) from which the existence and content of the intent can be deduced, and the identity of the declarant. The law explicitly regulates that a declaration of intent can be provided by various means of communication, for example by e-mail, fax, message, etc.
The offeror is deemed to have made an offer when he proposed the stipulation of the contract to a specific person or several unspecified persons, and if his offer contains all the essential elements of that contract. Even when the parties only agreed on the essential components of the contract and agreed that the subsidiary points would be resolved later, it is considered that the contract was concluded. The offeror is bound by the offer given, unless this obligation is expressly excluded or does not come from the circumstances of the deal. The fixed-term offer obliges the offeror until the deadline expires.
The other important moment in the stipulation of a contract is the acceptance of the offer, since it is considered that at the time of acceptance of the contract the contract was concluded. The offer was accepted when the offeror receives the declaration of acceptance of the offer or payment of the price, when the item is shipped or when something else has been executed in correlation with the offer received, prior practice or other customs that can be considered as acceptance. In principle, the tacit acceptance of the offer is excluded, and it exists only in exceptional cases, for example when there is a permanent business connection between the parties.
It is important to note that for certain types of contracts (for example real estate sales or leases) the law requires the mandatory written form. However, in situations where the parties have not stipulated the contract in valid form, but have agreed on the essential ingredients of the contract and have already performed all or at least the majority of the obligations taken, it is possible, in accordance with art. 294. of the Act, to obtain the validation of such a contract. It means that each contracting party, in order to protect its rights, can request in a judicial proceeding that the judge ascertains that this contract is valid and produces legal effects. This mainly concerns real estate sale contracts, since it is not possible to transfer the ownership of a property in the land register without a contract in written form, thus no acquisition of property is possible.
The Supreme Court of the Republic of Croatia has already, in a certain number of cases, brought decisions that validate contracts not stipulated in due form, of which we mention some examples:
– “Taking into consideration that the parties have largely fulfilled the obligations deriving from the lease contract concluded orally (the plaintiffs have transferred the possession of the house to the defendants, the defendants have lived in the house for a certain time at no cost, and then paid the rent), this oral agreement is considered legally valid on the basis of article 73 of the Law.” – The Supreme Court, Rev-234/00-2
– “The real estate purchase contract can be validated despite the absence of the prescribed form, if the contractual obligations of each party have been voluntarily executed, completely or in large part.” – The Supreme Court, Rev-1701/01
Finally, it is emphasized that the rights and obligations of consumers in relation to distance contracts are regulated by another law – the Consumer Protection Act, given that the legislator believes that the consumer is the weaker contractual party who must be more protected. Therefore, the aforementioned does not apply to consumers, which are subject to specific rules regarding the submitting and acceptance of offers.