Lazim Travel (Private) Limited and Others v Alfred Murumbi

The first plaintiff was a travel agency business on the verge of collapse. The defendant, a Chartered Accountant, offered to take over the business and entered into negotiations with the second plaintiff (Mlalazi). The defendant drafted an agreement of sale with a purchase price of US$15,000, which the plaintiffs understood to mean the defendant would settle all existing debts and liabilities rather than make a cash payment. The plaintiffs signed the agreement on 14 December 2009, but the defendant never returned a signed copy. Despite not signing, the defendant took control of the business by opening a new bank account, appointing himself and his wife as directors with shares, and operating the business. However, the defendant failed to settle the first plaintiff's liabilities as contemplated. The second and third plaintiffs, as original guarantors, were sued and had to settle liabilities totaling US$12,480.89. They sought to recover this amount from the defendant, who refused to pay on the basis that he never signed the agreement.

• Whether an agreement of sale was concluded between the plaintiffs and defendant despite the defendant not signing the agreement
• Whether the defendant's conduct after receiving the signed agreement constituted acceptance and performance of the agreement
• Whether silence and conduct following an offer can constitute acceptance and ratification of a contract
• Whether the defendant is indebted to the plaintiffs for the amount of unpaid liabilities

1. The defendant shall pay the plaintiffs the sum of US$12,480.89 with interest at the prescribed rate from 2 December 2010 to the date of full payment; and 2. The defendant shall pay costs of suit.

Where an offeror drafts and sends an agreement to the offeree, and the offeree signs and returns it, the offeror's subsequent silence combined with conduct consistent with performance of the agreement (such as taking control of a business, changing bank signatories, appointing directors, and operating the business) constitutes acceptance and creates a binding contract, notwithstanding the offeror's failure to sign the agreement. In commercial dealings, when according to ordinary commercial and human expectation a firm repudiation would be the norm if an assertion of contractual obligation was not accepted as correct, a party's silence and inaction, unless satisfactorily explained, may constitute an admission of the truth of the assertion and will be an important factor in determining that a contract exists. Contractual obligations, once established through offer, acceptance and conduct, must be adhered to and parties cannot escape liability through technical arguments about formalities.

The court observed that the conduct of the plaintiffs demonstrated honest dealings and a desire to retain their reputation, which explained why as guarantors they found it necessary to clear the liabilities of a concern already in the hands of the defendant. The court noted that although the agreement was not drawn up by a legal practitioner, the defendant's qualification as a Chartered Accountant meant he could not be deemed not to have had the requisite knowledge of the kind of offer he was making. The court commented that the defendant's concessions under cross-examination removed any defence he might have had, and that he failed to prove his assertion that the liabilities were astronomically higher than the US$15,000 he had offered in the agreement.

This case is significant in Zimbabwean commercial law for establishing that a contract can be concluded and binding despite the offeror not signing the agreement where the offeror's subsequent conduct demonstrates acceptance and performance of the contractual terms. It reinforces the principle that parties cannot escape contractual obligations through technical arguments about formalities when their actions demonstrate clear intention to be bound. The case also demonstrates the application of the doctrine of acquiescence through silence, particularly in commercial contexts where business people are expected to respond promptly to assertions of contractual obligations. It emphasizes that courts will look at the totality of parties' conduct and apply the principle that contractual obligations must be adhered to, particularly where one party has acted to their detriment in reliance on the agreement.