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Declaration of Intent: A Legal Conundrum?

in Review of Central and East European Law
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Abstract

In the traditional notion of contract formation, the general rule is that formation of contract requires an offer and acceptance to be communicated between the parties. However the Estonian Law of Obligation deviates from this rule and adopts a broader approach to contract formation through the mutual exchange of declarations of intent. The present article examines the ambiguities and legal muddle caused by this approach. A far more difficult issue is the time of receipt of communication since Estonian contract law does not adhere to either the dispatch theory or the receipt principle. Although the Estonian Law of Obligation draws a distinction between oral and other (written) communications, the latter reaches the addressee (or are deemed to be received) only after the recipient has had suffi cient time to review the communication. This may be appropriate for consumer transactions, but difficulties may well arise at the international level in proving effective receipt of a notice.

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