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FREQUENTLY ASKED QUESTIONS


Civil Law and Commercial Law

CONSULTATIONS AND COSTS

FAQs on the Initial Consultation

Does Koya & Company Advocates charge for the preliminary phone call or email in which the client makes an inquiry?

·       No. The initial introductory call or email that you make seeking legal help is free; and is usually a brief introductory call or email  in which you set out the legal issue and then I subsequently give a preliminary assessment and invite you in for a consultation to discuss your issue/case in more detail.


What happens during the Initial Consultation?

·         This is the forum for the client to describe in detail the legal problem that they need help with.

·      The advocate is focused on listening and asking questions that are relevant to your particular circumstances in order to advise you on the best way forward.

·      If your matter requires more legal analysis and research, the advocate will advise you on the modalities of preparing a legal opinion.


How much time will I get?

·       The initial consultation runs for 1 hour.

·        If the initial consultation goes beyond 1 hour, in addition to the consultation fee, I charge regular fixed hourly fees.


How much will the Initial Consultation cost me?

·       Kes 7,000 for a one-hour video-call consultation with payment made in advance of the scheduled call.

·         Kes 7,000 for a one hour in-person, face to face meeting at my office.


Is there a cancellation fee?

·         Not if you cancel the day(s) before.

·         But in consideration of my clients, if you cancel on the same day as the planned appointment, I charge a cancellation fee of  Kes 7,000 payable prior to any subsequent consultation that we may then arrange.


How should I prepare for the Initial Consultation?

·         Try to ensure that you have the relevant documents on hand at the consultation, that you can present to the advocate e.g., your employment contract if discussing an unfair termination or copy of shareholder's agreement if discussing shareholder rights and liabilities.

·         Feel free to write or type up any questions you may have, so that questions that are important do not slip your mind.

·         The initial consultation is very beneficial as it allows the advocate to listen to your legal matter; elicit the relevant legal analysis of your matter and ultimately helps the lawyer to provide you with the best legal representation.


What happens after the initial consultation?

·         The advocate will advise you on the next steps to be taken.

·         You will need to confirm (either at the meeting or after the meeting) that you wish to engage the advocate to handle your legal matter.

·       Once you agree with the advocate on the scope of work and legal fees, the advocate shall prepare an engagement agreement setting out the terms of the legal provision of services to you, the client.

 

EMPLOYMENT LAW

FAQs on Legal Agreements Entered into with Independent Contractors in Kenya

Who is an Independent Contractor?

An independent contractor is an independent service provider to a client under a contract for services and is not classified as either an agent or employee by reason of entering a contract for services with the Client.

 

How to Ensure an Agreement Clearly Distinguishes an Independent Contractor from an employee?

·         It is in the Client’s best interest to ensure that the contract for service stipulating the relationship between the Client and the Independent Contractor does not raise an inference that the contractor is actually an employee; otherwise, the Client may incur certain statutory liability as an employer.  

·         This is because an employment relationship may be imputed from a wrongly worded contractor agreement; meaning that an implied contract of service can be construed from what is purported to be an independent contractor agreement. To avoid such potentially devastating imputations, the Client should have a lawyer draft the independent contractor agreement .

 

What is the Distinction between Independent Contractor and a Consultant?

A consulting agreement is an agreement between a Client and a special type of independent contractor called a consultant. A consultant is a professional with specialist skill or expertise that enters into a contract for services with a client. The same care should be taken when drafting the consulting agreement to avoid the imputation of an employment relationship between the Client and the Consultant.

 

What is the Distinction between an Independent Contractor and a Casual Employee in Kenya?

A casual employee is an employee in Kenya who is paid daily wages and is employed for not more than 24 hours at a go. An independent contractor differs from a casual employee in that often the casual worker relies on the tools and instructions of the employer in the course of doing his work while an independent contractor generally provides his own tools and determines his mode of work when for the client. Businesses should seek legal advice in determining who is a casual employee versus an independent contractor in order  to avoid wrongly assessing the business’ statutory duties under employment laws and tax laws.

 

Tax payable by an Independent Contractor?

Withholding income tax is payable in Kenya on income earned by consultants and independent contractors. Where the independent contractor is a company or other incorporated entity, they need to pay corporate tax at the rate of 30% for local companies and 37.5% for foreign companies. All independent contractors have legal obligations relating to filing of consulting taxes. Other taxes may be payable depending on the particular circumstances of the independent contractor.

FAQs on the Termination of Employment via Redundancy Process in Kenya

These questions are frequently asked on the redundancy process in Kenya and the attendant answers guide Employers and Employees alike.

 

What is the Definition of Redundancy under Kenyan Law?

Redundancy is the termination of employment at the initiative of the employer, through no fault of the employee and which is brought about by either abolition of the job, superfluity of the job or loss of employment.

 

What is a Fair or Valid Redundancy Process in Kenya?

The law on the termination of employment including the redundancy process is contained in the Employment Act of Kenya and the International Labour Organisation, Convention on Termination of Employment to which Kenya is a signatory. The Employer must issue a notice of intent to declare redundancy outlining the reasons for redundancy (also called a redundancy letter) which runs for  a minimum of 30 days. After the minimum 30 days have lapsed, the employer may then go ahead and issue a termination notice, notifying the employee that their employment will shortly be terminated as per the terms of the employment contract.

 

Should Employers write Up a Formal Redundancy Policy

Certainly, Employers should document a precise, written down redundancy policy setting out clearly all the steps to follow; and documentation they should always prepare and store pursuant to any redundancy. The point here is to avert unfair treatment of affected employees as well as to provide a trail of evidence if the employer is sued by an aggrieved employee. It goes without saying that the policy should strictly be adhered to.

 

When does Redundancy Constitute Unfair Termination of Employment?

Employers set themselves up for unfair termination claims when they fail to follow due process as stipulated in the redundancy laws applicable in Kenya.

Redundancy is unfair when:

1.       The redundancy procedure under law is not strictly followed;

2.       The employee is unfairly discriminated against; or

3.       There are no reasonable grounds to terminate employment due to redundancy, that is, the reasons for redundancy are unfair or not genuine.

 

How Much Redundancy Pay am I Entitled to?

Redundancy pay is calculated based on the formula that you get a minimum of 15 days’ pay for each year worked.

 

Benefits of Redundancy?

Redundancy often benefits employees when macroeconomic conditions in Kenya are such that the Employer Company is unable to turn a profit and therefore cannot sustain the continued employment of certain employees e.g., during this coronavirus period (2020/2021). Redundancy also benefits the employer when the employer is contemplating a business restructuring and it will no longer be efficient or necessary to keep certain job roles within the organizational structure.

 

Seminal Cases on Redundancy in Kenyan Case Law?

Kenya Airways Limited v Aviation & Allied Workers Union Kenya & 3 Others [2014] on the grounds for redundancy and Thomas De La Rue (K) Ltd vs David Opondo Omutelema [2013] on the procedure to be followed during a redundancy.

 

 

LITIGATION

FAQs on How to File a Civil Suit in Kenya

This FAQ is instructive on how to file a law suit in Kenyan Courts; and this comes up a lot especially with both local and foreign clients  seeking to recover debt from defaulting debtors especially in the commercial arena. I strongly advise anyone contemplating to go it alone in court without legal representation not to do so as in simple terms you are likely to lose without a knowledgeable advocate on your side. This FAQ paints a relatively straightforward view of the court process to recover a civil debt in Kenya, but often there are more complex issues at play  so it is in your best interests to hire a lawyer to handle these claims for you.

 

Legal Debt Recovery in Court by your Advocate/Lawyer

  • Often times, it is advisable to obtain a legal opinion on the case from the lawyer to give you an idea of the strength of your legal claim and how persuasive your evidence is and likelihood of winning the court case vis a vis the person you are claiming against.

 

  • The first step is to send a demand letter to the debtor client, giving them around 10-14 days to comply with your demand for satisfaction of the civil debt and during this period the lawyer contacts the Debtor directly to attempt settlement.

 

  • If the demand is not satisfied, we file suit at the court. Note that some courts such as Nairobi have introduced an electronic case management system characterized by e-filing on the Judiciary of Kenya website; while in other courts you still need to file physically at the appropriate court registry. It is crucial to file the matter in the court of appropriate jurisdiction both in terms of geographical location as well as pecuniary jurisdiction.

 

  • Once the matter goes to court, we now have a plaintiff and a defendant. To explain briefly the Plaintiff is the complainant, the Creditor who is owed by the debtor; and the Plaintiff institutes a civil claim for debt recovery against a person in Kenya. The debtor who is sued is the defendant.

 

  • The general instrument the Plaintiff uses to file a legal claim is a plaint accompanied by witness statements and annexures. Nevertheless, it is good to note that there are other specialized applications by which one can institute the claim in court depending on the particular circumstances of the dispute.

 

  • Court filing fees are payable depending on the value of the claim up to a maximum of 70,000 Kenya Shillings which is roughly USD 700. The Registry Staff at whichever Subordinate or High Court, applying the Schedule of Fees, will advise on the precise filing fees once they have assessed the plaint.

 

  • Kenya has an adversarial legal system whereby parties are pitted against each other and the judge or magistrate is an impartial arbiter who determines but does not investigate the case himself/herself. The Civil Procedure Act and the Evidence Act are the main laws guiding civil law suits or proceedings in Kenya.

 

  • Thereafter you serve the court documents on the Defendant and serve the summons to enter appearance on the Defendant. If the Defendant files a Defence, the matter will go through pre-trial modalities and then the suit shall be set down for hearing. At the hearing in court, witnesses are heard, cross examined and re-examined.

 

  • Thereafter parties file written submissions setting out how the law applies to the facts in question (relying both on statute and case law) which may be highlighted in court if the court so directs.  Here is where having an astute lawyer will make you - the client- more likely to win your case.

 

  • Thereafter judgement is made and often costs of the suit are payable by the losing party.

 

  • Once judgement is made, the judgement creditor shall extract the court order which must be obeyed and cannot be ignored as they are an exercise of judicial power by the Kenyan Courts. Thereafter if the client wins and the debtor fails to pay, the court order is enforceable by attaching the assets of the judgement debtor.

 

REAL ESTATE/ CONVEYANCING

FAQs on the Process of Buying Land in Kenya

What Due Diligence Should I Undertake?

·         It is imperative to conduct a land search at the land’s registry in the location where you want to buy land; the point here is to confirm the ownership of the land you intend to buy.

·         The land registry search is either conducted online via the ecitizen platform or you can lodge the application for search at the Lands office in the locality where you intend to buy the land . This land search will also reveal encumbrances on the land such as charges, mortgages where the land is used as security for a loan or caveats which prohibit anyone from dealing with or otherwise disposing of the land.

·          Further, if you are buying land from a developer company or a company that sells land, your lawyer needs to conduct a company search on the Seller company to see that the company indeed exists and that it is in good legal standing.

·         Also go ahead and instruct a licensed surveyor to survey the land, its boundaries and ensure it aligns with the deed plan/index map at the Ministry of Lands. The surveyor’s fees are assessed based on the acreage of land the client is buying.

 

Purpose of the Agreement for Sale?

·         Thereafter the Seller and his Advocate will draft the Agreement for Sale setting out the terms of the sale and one should play close attention to details such as whether the land is freehold or leasehold; whether it is agricultural land or not; the reversionary interest in the land etc.

 

How Much Money should I Deposit as the Purchase Price?

·         This depends on the Agreement of Sale and ordinarily amounts to 10% of the purchase price.

·         The deposit is paid to the Seller upon signature of the agreement of sale.

 

What Happens on Completion? Handover the Requisite Land Transfer Documents and Payment of Full Purchase Price

·         On Completion, the advocate of the Seller shall deliver to the advocate of the Buyer the original title, transfer document, lands rates clearance certificate, stamp duty valuation form, land rent clearance certificate, consents e.g., spousal consent etc. in order to facilitate registration of the transfer of the land.

·         On the other hand, the Buyer pays the remainder of the Purchase Price.

 

Is Stamp Duty Payable on Land Purchase/Transfer in Kenya?

·         The Buyer then pays stamp duty on the land assessed on the value of municipal land at a rate of 4% and the value of rural land at a rate of 2%.

·         Thereafter the application is lodged at the Lands Registry for registration of the transfer against the title.

·         The transaction is completed and the Buyer receives a certificate of title outlining whether the land is leasehold or freehold.

 

 

FAQs on the Process of Buying a House/Apartment in Kenya

Real estate in the form of houses and apartments is considered a favourable asset  for investment in Kenya especially in the main cities of Nairobi, Mombasa, Kisumu and in tourist areas like Malindi, Lamu, Nanyuki, Naivasha and Diani. Below, I outline the frequently asked questions I receive at Koya and Company Advocates, when I am taking my clients through the process of buying a house or apartment in Kenya.

 

What Due Diligence Should I Undertake?

·         It is imperative to conduct a land search at the land’s registry in the location where you want to buy land; the point here is to confirm the ownership of the land you intend to buy.

·         The land registry search is either conducted online via the ecitizen platform or you can lodge the application for search at the Lands office in the locality where you intend to buy the land . This land search will also reveal encumbrances on the land such as charges, mortgages where the land is used as security for a loan or caveats which prohibit anyone from dealing with or otherwise disposing of the land.

·         Further if you are buying land from a developer company or a company that sells land, your lawyer needs to conduct a company’s search on the Seller company to see that the company indeed exists and that it is in good legal standing and that the land it intends to sell to you is not encumbered or otherwise disputed

 

Purpose of the Agreement for Sale

·         Thereafter the Seller and his Advocate will draft the Agreement for Sale setting out the terms of the sale and one should play close attention to details such as whether the land is freehold or leasehold; whether it is agricultural land or not; the reversionary interest in the land etc.

·         Pay particular attention to your duties as a shareholder of the management company that will be taking care of the entire housing development or estate. Pay close attention to the duration remaining on the leasehold (most land in the cities is held on a long-term leasehold basis  as opposed to freehold).

 

How Much to Deposit as Purchase Price?

·         This depends on the Agreement of Sale and ordinarily amounts to 10% of the purchase price.

 

What Happens on Completion: Handover the Requisite Land Transfer Documents and Payment of Full Purchase Price?

·      On Completion, the Completion documents consisting of the original title, transfer document, Land rates clearance certificate, stamp duty valuation form, land rent clearance certificate, consents e.g., spousal consent are handed over in order to facilitate registration of the transfer of the apartment/house.

·         On the other hand, the Buyer pays the remainder of the Purchase Price.

 

Is Stamp Duty Payable on Land Purchase/Transfer in Kenya?

·         The Buyer then pays stamp duty on the land assessed on the value of municipal land at a rate of 4% and the value of rural land at a rate of 2%.

·         Thereafter the application is lodged at the Lands Registry for registration of the transfer against the title.

·         The transaction is completed and the Buyer receives a certificate of leasehold (rarely a certificate of freehold if buying in the city).

 

 

INTELLECTUAL PROPERTY LAW

FAQs on Trademark Registration Locally & Internationally and Trademark Infringement

What is a Trademark?

A trademark is a word, phrase, or logo or a combination of all 3 that identifies the source of goods or services. It distinguishes a brand as being particular to a business. There are different types of trademarks for instance: certification trademarks, service marks, collective trademarks etc. A word, number, 3D object, logo or a combination of these preceding elements are all examples of trademarks in Kenya.

 

What are the Governing Trademark Laws in Kenya?

In Kenya, the main law governing trademarks is the Trademark Act (CAP 506). Kenya is also a party to the WIPO Madrid Convention.

 

What is the Value of Trademarks? What kind of Protection do Trademarks Afford your Business?

In a nutshell, trademarks prevent economic damage to your business. Trademarks protect the goodwill and reputation of your business’s brand. A trademark avoids confusion in your customers when it comes to competing goods and services by making it clear to customers that indeed you and not anyone else is the source of your goods and services and that they can rely on your trademark as a reliable signifier of your brand as the actual source of the goods and services. It’s also the basis to protect your goods and services from low quality counterfeits as only the registered owner of a brand can provide goods and services as being tied to a particular mark.

 

What is the Trademark Registration Procedure in Kenya?

Trademark Search

You need to do a trademark search prior to beginning the application process. Only after you get preliminary advice from the Kenya Industrial Property Institute (KIPI) that indeed the search shows that the trademark in fact has no registered proprietor can you proceed to lodge the trademark application forms.

Trademark Forms

After you receive the search results showing the mark is not registered you can go ahead to prepare the requisite statutory forms and one of the essential forms here is TM27. When it comes to filing the application I strongly advise businesses to have an authorized agent, namely an advocate to prepare and lodge the application at KIPI to avoid making mistakes that will prove costly (even as far as denying you the envisaged trademark protection in good time). A lawyer will further advise you on the best trademark protection coverage you can get especially in terms of the description of your goods and services and the applicable trademark classes.

 

What is the Trademark Registration Procedure at WIPO/ARIPO?

Once you have the basic registration of the mark in Kenya and your business is operating beyond Kenya’s borders - that is internationally or multinationally- you may want to protect your brand in those foreign markets where the business is operating. To do this,  you can easily make an application via  WIPO or ARIPO or other regional specialized international organisations that protect intellectual property. Through these WIPO and ARIPO offices, your application will be presented to the national intellectual property offices of the particular markets and subsequently your trademark will be protected in the specified countries. I strongly advise you to reach out to Koya & Co. Advocates to advise and guide on these international trademark applications to avoid immense costs if one does not file the application in the correct manner.

 

What is Trademark Infringement?

·         The trademark owned by a business is infringed by any person who, not being the proprietor of the trade mark or a registered user thereof using by way of permitted use, uses a mark identical with or so nearly resembling it as to be likely to deceive or cause confusion in the course of trade or provision of any services in respect of which it is registered.

·         Another important point to note is that under S15A of the Trademarks Act, the Registrar of Trademarks will not register an unregistered mark with an unconnected proprietor where the mark has a well-known status globally or nationally, whether or not the owner of the mark is operating in Kenya. There are various legal issues pertaining to this under the Paris Convention.

·         Get in touch if you need more information on this.

 

What if you Don’t Own the Mark being Infringed upon - Meaning you Have not Registered it?

While you will have no cause of action for breach of trademark under the Trademarks Act; one can still seek recourse by bring a civil law suit for the tort of passing off whereby you sue the defendant for presenting his goods and services as being your goods and services or purporting to connect your goods and services to those that the defendant provides, thus imperiling the reputation of your business; and protects the goodwill of your business from misrepresentation and mis-association.

 

What are the Remedies in Trademark Infringement or Passing Off Action?

The most valuable remedy here would be an injunction filed under a certificate of urgency to halt the damage to your business’ brand and you would also seek a permanent injunction. Secondly, you would seek to obtain damages for the harm already caused to your brand.

 

FAQs on the Process of Registering Industrial Designs

When Should you Register an Industrial Design?

Ideally, industrial designs should be registered before they are published or publicized to the world. This determines the priority of ownership of the design where there are competing creators.

 

Where Can I Register my Industrial Designs in Kenya in Order to Protect my Intellectual Property?

Registration involves filing an application at the Kenya Industrial Property Institute, (KIPI). The application consists of:

a.       A completed application form.

b.       Specimens of the design

c.       Drawings, photographs of the article and an indication of the kind of products for which the industrial design is to be used

d.       Description of the novel features of the design

e.       Application fee as Stipulated in the Schedule of Fees in The Industrial Property Act

 

What Does the Registration Process Entail? Advertisement and Issuance of Certificate of Registration of the Industrial Design?

After filing for registration, the industrial design shall be published in the Kenyan Gazette to allow for any objections. The publication runs for 60 days. If there is no objection by any other person claiming ownership of the industrial design, the design shall be registered and a registration certificate issued.

 

What is the Duration of Registration and Renewal?

Total timeline to complete the registration process is 3-8 months.

The certification of registration confers protection of design for 5 years, thereafter you need to renew the registration every 5th year.

 

What are the Costs of Registering an Industrial Design in Kenya?

The number of unique designs you wish to have registered to determine the professional legal fees and government fees payable.

 

 

 

 

FAQs on the Registration of Copyright in Kenya

What is the Importance of Copywriting your Work?

Copyright prevents infringing copies being made of artistic work; it allows the creator of the work to be monetarily compensated for their creative, innovative and artistic work through royalties (which is a percentage of the price at which the artistic work is resold) and licensing fees.

 

 

What is a Copyright Licence?

·         The owner of the work needs to allow the display or publishing, performance, recording or resale of work through a licence.

·         A licence can be exclusive to one licensee or to many sublicensees. For instance, computer software is licenced to each person who buys the software, that is a sub-licensee.

·         Parties agree on the duration of the term under which the licence will be valid and if not the Copyright Act has clauses on the term of the licence.

 

Can I Sell/Dispose of my Copyright?

A copyright owner can transfer ownership of his copyright to another person via an assignment. Such an assignment is only valid when registered with KECOBO.

 

How long does Copyright last in Kenya?

Different types of work run for the particular duration stipulated in law; for instance, copyright in artistic work registered in Kenya ends 50 years after you, as the creator die.

 

What is Copyright Infringement?

This is the display or publishing, performance, recording or resale of work by a third party without a licence from the owner of the copyright.

 

Also, Important to Know What Does Not Constitute Copyright Infringement

·         Copyright does not prohibit doing of any of these acts e.g., publishing, performance etc by way of fair dealing for the purposes of scientific research, private use, criticism or review, or the reporting of current events.

·         Copyright does not prevent caricature where a third party makes satirical fun of the artist’s work, or if the work is used in a broadcast, for instance tv or radio broadcast.

 

Are there Mechanisms for the Enforcement of Copyright in Kenya?

The statutory body in charge of enforcing copyright in Kenya is the Kenya Copyright Board -KECOBO. KECOBO also organizes the collection of royalties for artists and fines/penalises persons and businesses that infringe on copyright. If you want to get in touch with this organization, you can find the contacts on Kenya Copyright Board website.

 

How Can I Register Copyright in my Work?

The Kenya Copyright Act 2001 and the regulations thereunder set out the process of registration of the various categories of works that can be copyrighted; for instance, you may be interested in learning how to copyright an app in Kenya. The Schedule of Fees also guides creators on the cost of copyright registration in Kenya. Creators of works also have the option for E Registration.

 

CONTRACTS

FAQs on the Validity of Contracts in Kenya

Are oral contracts valid in Kenya?

Yes, oral contracts are valid contracts. In fact, the Law of Contract Act of Kenya provides that the contracts that need to be in writing are those related to the disposition of land or an interest in land. On the other hand, when it comes to enforcing certain contracts in court, you should adhere to the requirements on writing as stipulated in the specific statutory law.


Variation of contracts in Kenya?

Variation of a contract should be by mutual agreement to be valid. A major variation of a contract without mutual agreement renders the contract voidable at the option of the counterparty whose agreement was not sought. A variation without mutual agreement may be ratified by the said counterparty.


What are the basic principles of contracts in Kenya?

There should be an offer, mutual acceptance and exchange of consideration for a contract to be valid. Further, while oral contracts are valid, make sure that the subject matter of the contract does not fall under the statutory types of contracts that need to be in writing, such as the disposition of an interest in land.


Freedom of contract in Kenya?

Parties enter into contracts on the basis of an agreed bargain and the onus is on each party to agree to terms most favourable to them.  This means that ‘buyer beware.’ The law does not enter into contracts to rewrite contractual agreements, but aims to enforce the terms of the contract as documented.


What is the governing law of contracts in Kenya?

Sources are:

                                 i.            The Law of Contract Act of Kenya;

                               ii.            Legal Precedents under Case Law;

                             iii.            The Law of Contract Act of India of 1872 in its repealed form;

                             iv.            Contracts in certain sectors are governed by the particular statute controlling that sector. For instance, an employment contract is governed by the rules under the Employment Act of 2007.

FAQs on the Breach and Enforcement of Contracts in Kenya

How do I prove a verbal contract?

Verbal/Oral contracts can be proved by extraneous evidence e.g., conduct, exchange of invoices and receipts, bank transfers, WhatsApp communication, email correspondence etc.


Remedies for breach of contracts in Kenya?

Include: Damages, Rescission, Specific Performance, Restitution.


Are general damages for breach of contract payable in Kenya?

Yes. The purpose of general damages in Kenya is restitutionsuch that the claimant is to be put as far as possible in the same position he would have been if the breach complained of had not occurred.


Are special damages payable in Kenya?

Yes. These are damages for breach of contract arising from consequences of a breach which would not be foreseen as a natural/probable consequence of a breach of contract and must be strictly proven.


What is ‘specific performance’ of a contract?

This is a limited remedy granted by courts where damages alone would not be adequate compensation for a breach of contract; and the court therefore orders that the contract be performed by the party in breach.


What is a plaint for breach of contract in Kenya?

A plaint sets out the facts of the breach to be litigated upon in court and the remedies sought; and it is filed alongside witness statements and accompanying annexures.


Breach of contract cases in Kenya?

1.       Kenya Industrial Estates Ltd v Lee Enterprises Ltd NRB CA Civil Appeal No. 54 of 2004 [2009]eKLR on general damages

2.       Bid Insurance Brokers Limited v British United Provident Fund [2016] eKLR on oral contracts.


What constitutes frustration of  a contract  in Kenya?

Frustration of a contract discharges the obligation of a party to perform a contract when there is a supervening event that amounts to a frustration under law. E.g., if there is an employment contract to be performed in Kenya by a foreigner and the foreigner fails to obtain a work permit from the Kenyan government, then that contract is frustrated by a supervening event outside the control of the parties discharging them from the contract.


A frustrating event is an outside event or extraneous change of situation  that takes place without blame or fault on the side of the party that releases a party from the duty to perform a contract.


However, mere hardship in performing your obligations under law does not impute frustration. E.g., the fact that your business has collapsed and you are unable to repay a loan is not frustration.


A force majeure event stipulated in a contract is also a frustrating event.


Are illegal contracts enforceable in Kenya?

Courts will not enforce a contract arising out of a transaction which is illegal. For instance, a contract between parties that is used to facilitate money laundering; or an agreement to share proceeds of corruption between parties etc.