The existence of mutual assent between and among contracting parties is the basic requirement for contract formation in all jurisdictions. However, there is diverging view with regard to how this mutual assent of the parties shall be determined. While some jurisdictions principally employ “meetings of minds” (subjective theory of contract) standard to ascertain the existence of mutual assent, some other jurisdictions emphasize on “meetings of declarations” (objective theories of contract). A few jurisdictions strike a balance between these two opposite theories and adopt a dialectic approach to the problem. This study argues that, though Ethiopia is a civil law country, there are elements of Angle- American principles in addition to its continental traits. Hence,it concludes that the Ethiopian law of contract formation follows the German dialectic approach as opposed to its mother legal system.

Keywords: Ethiopia, subjective approach, objective approach