Question 1

Does a contract have to be in writing to be enforceable in Kenya?

Accepted Answer

No, not in general. Most commercial agreements can be formed orally or by conduct. The problem is proof rather than validity. A small number of contracts must be in writing or evidenced in writing, including dispositions of interests in land, and certain consumer and credit arrangements. Where a dispute is likely, an oral agreement is a poor instrument to litigate on. See whether a contract must be in writing.

Question 2

How long do I have to sue for breach of contract in Kenya?

Accepted Answer

For most contract claims the limitation period is six years from the date the cause of action arose, under the Limitation of Actions Act. There are shorter periods for some claims and different rules where the claim is based on fraud or where the claimant lacked knowledge. Time can run from earlier than clients expect. We check the position early because a limitation defence can end an otherwise strong claim. See limitation periods for contract disputes and limitation periods for commercial claims.

Question 3

Is a penalty clause in a contract enforceable in Kenya?

Accepted Answer

A genuine pre-estimate of loss is generally enforceable. A clause that operates as a penalty, meaning it is aimed at punishing breach rather than compensating for it, is not. Kenyan courts apply that distinction to the facts, including the commercial context and the relationship between the sum and any likely loss. This is why liquidated damages clauses need to be drafted with the actual risk in mind. See remedies for breach of contract.

Question 4

What is the difference between terminating a contract and accepting a repudiation?

Accepted Answer

They are not the same and the distinction matters. Terminating for breach requires the breach to be sufficiently serious, or the contract to give you that right, and it must be exercised correctly. Accepting a repudiation is treating the contract as at an end because the other side has shown it will not perform. Getting the wrong label, or continuing to perform after a repudiatory breach, can cost you the right to terminate. Take advice before you write the letter. See contract clauses that prevent disputes.

Question 5

Can we agree in the contract to arbitrate instead of going to court?

Accepted Answer

Yes. A written arbitration agreement is enforceable in Kenya under the Arbitration Act 1995, and a valid clause generally means the dispute goes to arbitration rather than court. The clause needs to be drafted with care, because a badly worded clause creates its own dispute about where and how the matter should be heard. We also check whether the seat, the institution and the number of arbitrators are all clearly identified. See drafting an arbitration clause.

Contract Lawyers in Nairobi

What our contract law practice covers

Which law governs contract disputes in Kenya?

When should a business consult a contract lawyer?

Illustrative examples

Talk to an advocate about your contract

Party-and-Party Costs in Kenya

Summary Judgment for Liquidated Claims in Kenya

Contract Clauses That Prevent Disputes