The law governing contracts and their binding nature is important to contract law. When an employer makes a job offer and the employee accepts, it creates more than just a preliminary agreement; it has legal implications.

"Employers expect employees who accept offers to follow through with loyalty and respect for the agreed terms. However, some employees accept job offers and then do not show up to finalise the contract. This raises the question of whether employers can take legal action for any losses incurred due to this no-show. This article explores how job offers become legally binding, referencing court decisions that outline what employers can do if an employee fails to honour the offer."

An offer, once accepted, forms a legally binding agreement. According to section 5 of the Law of Contract Act (CAP 345 R.E 2019):
“an offer may be revoked before its acceptance but not afterwards. Once the offeree (the employee) communicates their acceptance, a valid contract is established.”

Case study: Mbeya Urban Water & Sewerage Authority vs Lilian Sifael (Civil Appeal No. 300 of 2022) [2024] TZCA 64 (20 February 2024) “Once an acceptance has been made and communicated, it amounts to a binding contract”.

In this case, the appellant advertised a position for Financial Manager on 24th October 2015. The respondent applied and was interviewed on 13th February 2016, ranking second in the process. Consequently, the top-ranked candidate was offered the position, while the respondent was offered a different role as Senior Revenue Officer in the Commercial Department, via a letter dated 25th February 2016. The respondent accepted the offer on 29th February and planned to start work on 9th March 2016. However, upon reporting to work, she was asked to wait, and after approximately thirty-six days, she received a letter dated 14th April 2016, revoking her employment offer. The issue was whether there was a binding contract between the parties.

The court reiterated that an employer-employee relationship was created the moment the Employee accepted the offer. Despite the absence of a signed contract, the court found that the Employee’s acceptance established a binding contract.

• Employers should know that when a job offer is accepted by an employee, it creates a legally binding contract, even if no formal
  written contract has been signed.
• This means that once an employer sends a job offer and the employee communicates their acceptance, a binding agreement is in
  place. Neither the employer nor the employee can back out of this agreement after acceptance.
• If either the employer or the employee fails to follow through with the terms and conditions of this agreement, it may be
  considered a breach of contract.
  

• Employers are not without remedies when an Employee violates the terms of an accepted offer. A breach of contract allows Employers to seek damages for losses incurred due to the Employee’s failure to honour the terms.
• When an Employee breaches a contract, Employers may claim compensation for the direct financial losses suffered. The Court typically assesses damages based on the Employer's proven losses, including the cost of hiring a replacement, disruptions caused to business operations, and loss of profits resulting from the breach.
  

Employers should ensure that every step they take, including recruiting, is properly documented. They need clear policies and must adhere to legal standards to understand what constitutes an accepted offer and what forms a binding contract, especially regarding who has the authority to terminate employment contracts.

During recruitment, employers should closely monitor all steps to protect everyone’s rights. We, the Association of Tanzania Employers (ATE) are here to support our members (employers) at each stage to ensure everything is done correctly and in line with the law. This example shows how important it is to communicate clearly, follow proper procedures, and understand the law to avoid costly legal disputes.

Legal Humor

Rival conversation of legal counsels during the case of Rigachi Gachagua v State Law Office & 4 others [2024] KEHC 12436 (KLR)

Adv Githu Muigai: If you would, please sit down. I as a senior counsel am speaking.

Adv John Khaminwa: I will not sit down. I started practising law when you were breastfeeding