Civil Code of Ethiopia: An Overview

Nov 23, 2025 0

In today's globalized world, characterized by unprecedented trade liberalization and rapid advancements in information technology, international business transactions are on the rise. This has led to a growing recognition that national laws can pose barriers to international trade. Consequently, there have been various efforts to harmonize laws governing the sale of goods at the international level.

Ethiopia, however, has neither updated its civil code governing the sale of goods nor adopted any international conventions or principles to regulate international sales. This article examines the compatibility of the Ethiopian civil code with international conventions and principles, focusing on the United Nations Convention on Contracts for the International Sale of Goods (CISG), the UNIDROIT Principles of International Commercial Contracts (UPICC), the Principles of European Contract Law (PECL), and the Uniform Commercial Code (UCC).

The Ethiopian Civil Code

The Ethiopian law of contracts is primarily found in the Civil Code, which comprises 3367 articles divided into five books and twenty-two titles:

Book I: Persons
Book II: Family and Successions
Book III: Goods
Book IV: Obligations
Book V: Special Contracts

The sale of goods is governed by Book V (Title XV) of the Civil Code of Ethiopia, 1960. Article 1676(1) stipulates that the general provisions of Title XII (Book IV, on contracts in general) apply to all contracts, regardless of their nature or the parties involved. It also states that special provisions applicable to certain contracts, as laid down in Book V of the Code and in the Commercial Code, remain unaffected.

Whenever a dispute involving the sale of goods arises, one must first refer to the relevant provisions under Book V (Title XV). Only when these are insufficient should one resort to the general provisions of Title XII on contracts in general.

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International Conventions and Principles

CISG

Adopted by the UN in 1980, the CISG establishes a comprehensive code of legal norms for international sales of goods. It consists of four parts and 101 articles covering the sphere of application, general provisions, formation of contracts, sale of goods, and final provisions.

The CISG's objectives include promoting a new international economic order, developing international trade based on equality and mutual benefit, and removing legal barriers in international trade. It applies only to contracts of sale of goods between parties whose places of business are in different states and provides gap-filling rules.

UPICC

The latest version of the UNIDROIT Principles of International Commercial Contracts (2010) comprises eleven chapters. Its preamble states that the principles set forth general rules for international commercial contracts that are applicable when the parties have:

Agreed that their contract be governed by them.
Agreed that their contract be governed by general principles of law, the lex mercatoria, or the like.
Not chosen any law to govern their contract; these rules may be used to interpret or supplement international uniform law instruments and domestic law.

The principle may also serve as a model for national and international legislators. Both the CISG and UPICC enable the international community to harmonize and modernize international contract law.

PECL

Adopted by the European Union on the recommendation of the Lando Commission, the Principles of European Contract Law (PECL) are very similar to the UNIDROIT Principles. They comprise seventeen chapters. The conditions of application of the PECL (Art. 1) are more or less similar to those of the UPICC.

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Unlike the UNIDROIT Principles and the CISG, which apply exclusively to international contracts, the Principles of European Contract Law are applicable to:

Domestic European contracts as well as trans-European Union international contracts.
Virtually all European contracts, including merchant consumer contracts as well as contracts between commercial parties.

UCC

The Uniform Commercial Code (UCC) is a comprehensive model law on the important areas of commercial law and has nine Articles.

Application of International Instruments in Ethiopia

Even though Ethiopia does not have codified private international rules, general observation can be made about the possible principles and rules that would help courts determine the applicable law based on some of the findings of scholars on the subject and the new draft proclamation on private international law.

There are circumstances where the Ethiopian civil code, CISG, UPICC, PECL and UCC are applied in an international contract of sale in which an Ethiopian national is a party. The application of those documents in Ethiopia with respect to international contract is based on three grounds: 1) freedom of contract, 2) rules of private international law, and 3) lexmercatoria.

Firstly, the courts will have to see if the parties to any international contract have made effective choice of the applicable law. As sale contract is of law where freedom of the parties is given higher value than any other area of law, the appropriate system of law to govern the formation and effects of contracts containing foreign element in principle is left for the parties to choose.

And, the contracting parties may choose either one or more of the above legal instruments. For example, if a company with its place of business in Ethiopia sells to one with its place of business in the People’s Republic of China (PRC), these international instruments applies when both the contracting parties choose it as a governing law.

Just as CISG can be applied when it is chosen by the contracting parties in Ethiopia, UPICC, PECL & UCC can also be applied. However, the parties are not free to choose any law they like. They have to have substantial relationship with the parties and the chosen law should not be contrary to the public policy of the forum.

In the absence of effective choice by the parties, the following options may be forwarded:

LEX LOCI CONTRACTUS i.e. the law of the place where the contract is concluded;
LEX LOCI SOLUTIONS i.e. the law of the place the contract is performed;
The law of the state with which the contract has substantial connection or otherwise termed as the “proper law of the contract”.

But, it should be born in mind that not all the matters affecting the contract are governed by one system of law. It is possible that different particular aspects of the contract could be governed by different laws. For instance, CISG, UPICC, PECL, UCC and the civil code provisions may govern different aspects of a single contract.

By applying the rules of private international law, if the applicable law is the law of the contracting state, the CISG will be applicable subject to the fulfillment of its pre-condition. e.g. if French and Ethiopian parties choose French law as the law of the contract, the CISG would normally apply because France is a contracting state notwithstanding the fact that Ethiopia is not a contracting state.

In cases where CISG is applied by the Ethiopian courts, UPICC & PECL can also be used in order to supplement the CISG. Besides, they may choose via an expression of lexmercatoria by an arbitral tribunals in Ethiopia.

Finally, as per Art. 1713 of the Ethiopian civil code, the contracting parties are bound not only by express terms of their contract but also by such incidental effects as may be attached to it considering trade usage, custom, and good faith i.e. CISG, UPICC, PECL, & UCC can be referred to.

Functions and Features

The functions of the civil code governing sale of goods are: facilitating transaction, regulating market, filling contractual gaps, encouraging optimal cooperation and performance. In addition to this function provided under the civil code, the CISG, UPICC, PECL & UCC are designed among other things to facilitate and promote international trade by making uniform laws, which result in legal certainty and predictability.

In relation to their feature, unlike the civil code & CISG which are considered as hard laws because of they represent a legally binding enforceable regulations, the UPICC and PECL are considered as soft laws because they merely suggest the goals that have to be achieved.

In relation to their scope of applicability, the UPICC does not apply to domestic contracts rather it is intended to operate globally, which are broader in scope and more detailed in provisions than the CISG. Similarly, while the Ethiopian civil code, UCC & PECL are of a narrower geographic focus than CISG & UPICC, they covers a wider area of law.

The PECL is applicable to contracts entered into by parties who belong to Member States of the European Union whereas the UPICC and the CISG are applicable universally. The civil code too apply to domestic contracts unless the parties choose for its international applicability. UCC is also applicable for contracts of sale of goods made between two or more traders of US state except Louisiana or for international contract via choices of contracting party.

The international contract of sale of goods is mostly concluded via the exchange of offer and acceptance. In respect to offer and acceptance, the section of the civil code which governs contract of sale of goods is silent. So, as per Art. 1676(1) of the CC, the general contract provisions of offer and acceptance will apply for the contract of sale of goods.

In relation to the formation of a contract the following are the basis of comparison.

Silence as Acceptance

The European principles of contract law under section 2, Art. 2:204(2), specifies that silence or inactivity does not in itself amounts to acceptance. This principles of contract also incorporated under Art. 18(1) of CISG, under Art. 2.1.6 (1) of the UNIDROIT principles of commercial and under Art. 1682 of civil code of Ethiopia.

However, even though all the above legal instruments incorporate the principle that silence does not amount to acceptance in black and white term, the Ethiopian civil code includes a little bit different thing in this regard. Unlike the above international commercial instruments, the Ethiopian civil code incorporates exceptional grounds that make silent will amount to acceptance.

Silence may amounts to acceptance if;

There is pre-existing business relations or clear contractual relation has already been established, which enables to believe that the parties are aware of the extent of the obligations.
Where the proposal is for making a subsidiary or complementary contract to the original contract, and the offer is made in a special document.
An offer is made to persons who are required by law or by the terms of a concession granted to them by the government to conclude certain contracts on terms stipulated in advance like supply of electricity and telecom service here in Ethiopia.

But we cannot find such kinds of exceptional grounds that show the possibility of silence may amount to acceptance in international instruments like CSIG, PECL and UPICC. Therefore, it is possible to say that the Ethiopian civil code is unique in this regard.

Form of Contract

The civil code (Art. 1719), CISG (Art. 11), UPICC (Art. 1.2), and PECL (Art. 1:102) make clear that contracts need not be in writing to be enforceable. This is in contrast to UCC (§2-201), which requires contracts for the sale of goods in excess of $500 to be in writing.

Besides, under the UPICC (Art. 3.1.2) a contract can be modified or terminated by the parties in any form. This is contrary to the provisions of the civil code (Art. 1722), CISG (Art. 29(2) & PECL (Art. 2:106)), which states that a written contract shall be modified only in writing.

Whereas, the UPICC, PECL & UCC take consensualism has an effect on both the formal existence of contracts as well as their substance, the CISG limits the relevance of consensualism to question of the form of legal acts.