08 December 2011 Written by  Wondwossen Wakene

Administrative Contracts and Other Forms of Contracts: General Overview

Administrative Contracts and Other Forms of Contracts: General Overview

Because of the need to carry out its functions, government, via its branches, will embark upon different activities which inevitably will invite the interplay of its branches and the private sector. These branches other wise known as administrative agencies assist government to properly take its tasks of service provision among other things. It is therefore while these agencies carry out their functions that they use the law of administrative contracts to their ends. The ends are public services, the means administrative contracts.

If this is so, administrative contracts are contracts under the strict sense of the law but only an” administrative” one (see for example Art. 1676(2) cum Art.1675 of Ethiopian civil code with Art.3131 of the same).

But this nature of the contract i.e. being an administrative contract makes the same different from the beginning to the end from other types of contracts that we know.

Our inquiry therefore will be what is there in administrative contracts? What grain of difference does the qualification administrative add over non-qualified contracts?

One basic addition by the qualification is associated with prerogative matters. Because administrative agencies favorably enjoy the presumption of acting on behalf of the public and because public interest is overriding enough to put aside even basic principles of the law the agencies will enter into an arrangement where the platform is squarely fitted to their play than to the other contracting party.

When talking about administrative contracts, hence, one is talking about a contract where the two parties are unequal. Being a contract between unequal parties from the onset, at the end of the day, it will end up entitling parties in unequal manner.

If this is so, how should we define administrative contracts? Well as noted earlier the general contract title of the civil code is applicable to this case because of Articles 1676, 3131 and Art. 1675.


Definition

Art.1675

“A contract is an agreement whereby two or more persons as between themselves create, vary or extinguish obligations of a proprietary nature”.

Administrative contracts do share all of the above elements. The differences, however, extend beyond the requirements of Art. 1675 far in to the requirements of Art.3132 which  partly reads as: “A contract shall be deemed to be an administrative contract where”


a)    It is expressly qualified as such by the law or by the parties; or

b)   It is connected with an activity of the public service and implies a permanent participation of the party contracting with the administrative authorities in the execution of such service.

Let us examine the elements of Art.3132: “Expressly qualified as such by the law or the parties

According to this expression, a contract (remember Art.1675) will be an administrative contract if the law expressly qualifies it as an administrative contract. To this end, the law clearly enumerates what can be considered as administrative contract. But what if the law expressly disqualifies a contract to be an administrative contract? Both instances are the experiences of Ethiopia. Let us begin with the first. In the civil code we have such articles as Article 3207 and 3244 which expressly qualify contracts as administrative contracts. As to the second instance, we have the Mining Proclamation No.52/1993 which disqualifies contracts concluded by the administrative authorities with other parties under Art. 55(2).

The second implication of Art.3132 (1) is that parties may qualify expressly a contract as an administrative contract. An issue worth raising at this juncture will be ‘are all contracts administrative contracts merely because they are qualified as such by the parties? ’

Among other things, a contract qualified as such by the parties on face value cannot be considered as an administrative contract unless one of the parties is an administrative authority.

For one other reason to be consequently discussed i.e. for content consideration a contract merely qualified as an administrative contract by the parties will not also be an administrative contract. What about a contract that involves an administrative authority but not qualified as such by the parties?  Stated otherwise are all contracts that make one of the parties an administrative authority administrative contracts? René David says

As a French legal scholar and as I think it fit, in our classification of law, public law should be distinguished from private law. Especially it is important to separate civil law from administrative law…contracts made by public officials have this [special trait] which enable us call them administrative contracts and treat them separately from civil law.[emphasis]

This, as it may, the civil code proceeds to say-“ … Connected with an activity of the public service and implies a permanent participation of the party contracting with the administrative authorities in the execution of such service

The previous element is more or less concerned with the form of the contract, meaning the name the parties give to their contract when they first form it. The form it takes confers the contract a special nature.

Here we are concerned with the content of the contract, that is its object which determines the nature of the contract. Based on the object and the manner of meeting their object together with the type of the parties and their manner of participation in executing the object of the contract, we have another mechanism of distinguishing administrative contracts from ordinary contracts.

The object: this is one of the ways which is helpful to distinguish administrative contracts from the rest of the contracts. Art.3207 (1) identifies one of the objects as an activity of a public service”. In turn we have to consider what a public service is in our law.

 

Public service

Any activity which a public community has decided to perform for the reason that it to be necessary in the general interest and considered that private initiative was inadequate for carrying it out shall constitute a public service.

According to Art 3207(1) two reasons make “any activity” a “public service” without which the activity cannot be considered so. What are these reasons? One of these reasons is necessity. This necessity should be the need of the general interest. So any thing necessary and considered as such by a public community to the general interest will fulfill the first requirement of Art. 3207(1). The second reason is inadequacy on the part of the private sector. Thus a public service is any activity but which private individuals on their initiative cannot carry out among other things because of financial constraints.

Thus only a contract that has made its object ‘‘an activity of the public service…” will have the chance to qualify as an administrative contract.

Next to this, the manner of participation on the part of the contractor determines the nature of the contract. As such a contract to be an administrative contract should imply a permanent participation of the contractor… in the execution of such service. Let us in turn see what permanent participation is.

Permanent participation

Does permanent under Art. 3132(b) imply bondage? How long should a contract last?

Letting a contract to last forever jeopardizes the basic rights of an individual. Contracts should not be servitudes. Our first consideration therefore should be the individual. Thus we are saying that permanent participation of Art. 3132(b) must not imply the indefinite and forever nature of the relationship. Further “permanent” should imply continuous, uninterrupted, regular and normal participation of the contractor in the relationship and the expansion of a public service.

One other issue worth mentioning is the implication the “or” conjunctive has under Art. 3132(1) & (b). Does the conjunctive make the requirements optional or should we expect the cumulative applications of sub-articles (a) & (b)?

To elucidate, if we are to make the requirements under Art. 3132 optional then we are saying that mere qualification of a contract as an administrative contract will make the same an administrative contract. Sticking to the second extreme will however force us to consider all the elements under Art. 3132 and their affirmative existence to say a contract  and administrative contract. Which one position do you think is reasonable? Why?

No less important is the difference between “administrative agencies’’ and “public enterprises”.  We say this is important because the law prescribes in addition the nature of one of the parties to an administrative contract .As observed above, the law says one of the parties to an administrative contract should be an administrative authority. But what is an administrative authority? Does it also mean public enterprise? Consider Art 2(f) of Proclamation No.430/2005- “Procuring entity means public body, which is partly or wholly financed by Federal Government budget, higher education institutions and public institutions of like nature”.

From this it is possible to infer that at least two things make an entity an administrative body. The first is the source of income of the entity. If the entity partly or wholly derives its income from the government, there is a possibility to consider it a public body which can enter into administrative contracts. On the other hand the purpose of the organ makes it an administrative body.

Comparison: Genre and View Comparison

Here our basic concern will be comparing and contrasting administrative contracts and other types of contracts on one hand, and the common law and civil law on the other hand.

Administrative contracts are similar to other types of contracts because of their formation, validity requirements and the form. On the other hand, administrative contracts are  different  from other contracts because of   their formation, content and execution.

Let us briefly explain the points- But first what do you think are the views of the two legal systems towards administrative contracts?

The common law views administrative contracts just like other ordinary contracts whose consequences will show up to be the treatment of parties as equal members to the venture. No party will enjoy priority. Both are equal parties to and in the case. As a consequent incidence, the common law requires no new or special law governing administrative contracts. There is only one contract law regime that governs all the instances.

These outlooks will naturally lead to the adjudication of cases that involve administrative contracts by the ordinary courts of law.

Perspective change is observable under the civil law system where parties to administrative contracts are unequal, whose case will be governed by a special regime and adjudicated by special tribunals (i.e. administrative tribunals). This is specially the case in France.

Last modified on Wednesday, 02 May 2012 13:05