Key Elements of Contract Law in Kenya

The foundation of business relationships is the contract. In Kenya, contract law is governed by the Law of Contract Act (Cap 23), which largely mirrors English common law principles. A valid contract must have offer, acceptance, consideration, intention to create legal relations, and capacity.

Common Types of Contractual Disputes

Disputes often arise when one party fails to perform their obligations under the agreement. This constitutes a breach of contract. Common breaches include non-payment for goods or services, failure to deliver goods on time, or delivering defective goods.

Remedies for Breach of Contract

If a contract is breached, the innocent party is entitled to remedies to put them in the position they would have been in had the contract been performed.

• Damages: Monetary compensation for loss suffered due to the breach. This is the most common remedy.
• Specific Performance: A court order compelling the defaulting party to perform their specific obligations under the contract. This is discretionary and usually granted when damages are inadequate (e.g., land sales).
• Injunction: A court order restraining a party from doing something that would breach the contract.
• Rescission: Setting aside the contract and restoring the parties to their pre-contractual positions.

Dispute Resolution Clauses

Modern commercial contracts increasingly include clauses for Alternative Dispute Resolution (ADR) such as mediation or arbitration before resorting to litigation. This can save time and preserve business relationships.

At Larpei & Company Advocates, we draft robust commercial agreements to protect your interests and represent you in enforcing your contractual rights through negotiation, ADR, or litigation.