A contract in Kenya is an agreement between two or more individuals or organizations that is enforceable by law. It outlines what each party must do and what they can expect from the others.
Contracts play a crucial role in our everyday life, more so in a Kenyan context; they help people conduct business, employ persons, or purchase items safely.
Here is everything you need to know about contracts in Kenya
What Makes a Good Contract?
There are parts that every good contract needs to function correctly. What should Contracts in Kenya entail?
Names of People Signing
Name all of the people who are agreeing to the contract. This is people, companies, or groups. For instance, in employment contracts in Kenya, the two parties are the worker and the employer.
What Does The Contract Cover?
Explain what the deal covers. Is it a service, like constructing a house, or a good, like selling maize? Get specific about amounts or deadlines.
Rules and Responsibilities
Note what each individual is responsible for doing. In construction contracts in Kenya, for instance, it’s defined as the completion by the builder and payment by the client.
Payment Information
If cash is involved in the arrangement, specify how much, how it will be paid, and when. In Kenya, monthly salaries may be displayed in fixed-term contracts.
Signatures
Everybody needs to sign to agree. In Kenyan contract law, this makes the contract binding.
Extra Parts of a Contract That Help
How to Address Arguments
This part tells them what will happen if people disagree. Will they hash it out or end up in court? It is a common practice in Kenya’s government contracts.
How to Close the Deal
Describe when or how the contract can end. For instance, if workers fail to perform, their probationary contracts in Kenya might lapse after three months.
A Rule That Keeps Secrets
Contracts sometimes require a provision to keep things secret, as with business deals.
Force Majeure
Allow for items no one can control, like floods or strikes.” This is especially useful in construction contracts in Kenya, where weather can halt work.
Following the Law
Our contracts in Kenya are governed by Kenyan law. The primary legislation is the Law of Contract Act, which states that every contract must consider anything of value, such as money or labor. No contract exists without this; you aren’t getting paid without a valid contract.
What Makes a Good Contract?
A contract isn’t just about what’s in it, it’s also about how it’s drafted. 5 Main attributes of firm Contracts in Kenya.
Easy to Understand
The words should be simple. And everyone who signs it should know what it means. Employment contracts in Kenya, for instance, often fall short when workers don’t understand complex rules regarding pay or hours.
Covers Everything
A Good contract thinks ahead. It responds to “What if the job isn’t done?” or “What if somebody pays late?” According to a 2023 study by the Judiciary of Kenya, incomplete contracts account for roughly 20 percent of all court cases in Kenyan contract law.
Fair to Everyone
The rules should be equal. If the one side has all the power, the other can disobey it. This is a massive problem with oral contracts in Kenya because people fight. After all, nothing was written.
Can Be Enforced
The contract has to hold up in court if it comes to that. This means creating contracts according to Kenyan law and avoiding ambiguous phrasing.
Adjustable When Needed
Sometimes, things change. A firm contract could permit updates. For fixed-term contracts in Kenya, your employer can append a clause indicating that the time will be extended if you and your employer agree.
Types of Contracts in Kenya
Different types of contracts in Kenya Here are some common ones:
Oral Contracts in Kenya
These are spoken deals, not contractual ones. They’re legal under Kenyan contract law if there’s evidence, like witnesses. However, they create problems; nearly a third of contract disputes in Kenya point to oral agreements.
Employment Contracts in Kenya
These are for hiring workers. They describe how long the job is, how much it pays, and what it entails. According to the Employment Act of 2007, all employers must issue their workers a written contract within 2 months of hiring them. It also helps protect the employees from unfair termination and discriminatory practices.
Kenya Probationary Contracts
These are probationary offers and short-term deals to try out a worker. They typically run for three to six months. If the worker performs well, the contract can turn permanent.
Fixed-Term Contracts in Kenya
This type has a beginning and end date, like a one-year job. They’re also standard in construction contracts around Kenya, where project timelines are defined.
Government Contracts in Kenya
Those are contracts with the government, like building highways. They are governed rigidly by the Public Procurement and Asset Disposal Act 2015. According to the National Treasury, the Government spent over Ksh 500 billion on such contracts in 2022.
Construction Contracts in Kenya
These include building projects. They want specifics on materials, timelines, and payments. The Kenya National Bureau of Statistics said Kenya’s construction sector keeps increasing, growing the demand for robust contracts.
What Is an E-Contract?
E-contracts are contracts in electronic form, for example, when you sign up for a service online. The Electronic Transactions Act of 2009 recognizes e-contracts as legal in Kenya. This is achieved through e-signatures, which facilitate parties to finalize agreements at distance, and with minimal issues. E-signatures also simplify the process of making and executing e-contracts, which are the basis of modern digital contracting.
Contracts Law in Kenya
In Kenya, there are several laws governing Contracts:
- Law of Contract Act– Gives us the basics: There is an offer, acceptance, and value.
- Kenya Employment Act– Employment contracts in Kenya.
- Government Contracts– Governs contracts made by the government in Kenya.
- Electronic Transactions Act- Validates e-contracts.
Some laws keep contracts fair and workable. Violating them may result in court cases or fines.
How to Win Government Contracts in Kenya
Looking to work with the government? Here’s how:
PPIP- The registrant has to go on the Public Procurement Information Portal to Sign up
Check Notices- Open bids will be available on the portal or in newspapers.
Bid- Compile your bid with the necessary documentation, including tax clearance certificates.
Obey the laws- Follow timelines and specifications. In Kenya, more than 10,000 businesses applied for government contracts in 2023, but only 40%, because they had followed the process, were awarded these contracts, according to the Public Procurement Regulatory Authority.
Guidelines For Writing Good Contracts in Kenya
We are the best one on the way of making firm Contracts in Kenya:
Contact a reliable Lawyer in Kenya– They understand Kenyan contract law and can assist you.
Begin with a Template- Start with a contract template and fill in the applicable information.
Check It Twice- Go over it with everyone signing to avoid mistakes. The 2022 survey by the Kenya Chamber of Commerce found that 18% of businesses lost money due to not reviewing contracts well.
Are Digital Contracts Valid?
In Kenya, it is indeed legal to contract digitally. They are treated like paper if signed electronically and comply with the law. That is great for quick exchanges, such as impulse buying and hiring remote labor.
Why Contracts Matter in Kenya
Contracts keep things clear. Without them, so people take issues, and businesses forfeit money. Good contracts and avoid wasted time and trouble.
Employment Contracts in Kenya
In Kenya, employment contracts are agreements between a worker and an employer detailing the terms of a job. They come in different types:
Permanent contracts
They do not have an end date. As long as the worker resigns or is fired in a legally compliant manner, they stay employed. They involve pay, hours, and benefits such as leave.
Fixed-Term Contracts in Kenya
These have a defined period, such as six months or one year. They’re typical for projects like construction contracts in Kenya. A contract runs out of time unless there is a renewal.
Probationary Contracts in Kenya
These contracts test a worker for a shorter period, typically three to six months. And, if they perform well, they could get a permanent position.
Casual Contracts
According to the Employment Act, workers engaged in casual work for over three months should be provided with proper contractual agreements.
Forty-five percent of employees in Kenya are on fixed-term and probationary contracts, especially in farming and building.
What are the requirements for a valid contract in Kenya?
To ensure that Contracts in Kenya are valid under Kenyan contract law, they must comply with the following rules:
Making an Offer
Someone offers something (a job, for example), and the other accepts it.
Neither side will have figured out the actual value yet, but they will exchange something of agreed-upon value, like work for pay.
Legal Intent
The individuals signing must intend for the contract to be legally binding.
Capacity
The people signing it need to be able to understand it, adults over 18 who aren’t drunk or mentally ill.
Lawful Purpose
The contract can’t be for anything illegal, such as stealing.
Simple Rules
The terms should be clear.
The Law of Contract Act governs these requirements. If any of them are missing, the contract is not valid.
Conclusion
Contracts are tools of trust and order in Kenya. They must be readable, complete, fair, enforceable, and sometimes adjustable. So regardless of whether you are writing oral contracts in Kenya, employment contracts in Kenya for employees, or government contracts in Kenya, the rules remain the same: make it clear and legal. Spend the time to write them well; it’s worth it for peace and success.
FAQs
What Is the Law of Contracts?
In Kenya, contract law is governed by the Law of Contract Act. The main rules are:
- There needs also to be an offer (one side proposes a deal) and acceptance (the other assents).
- Something valuable, such as money or labor, has to be paid.
- Both parties must prepare for the contract to be legal.
- The signers need to be 18 years or older and have mental capability.
- For legal reasons, the contract has to be worded clearly.
This applies to all types of contracts in Kenya, from employment to government contracts.
What Is the Difference Between a Contract and an Agreement?
An agreement is when people get together and decide, such as agreeing to meet for lunch. A contract is a legally enforceable agreement. For example, a promise to pay for a service is a contract, yet deciding to play football is not. Contracts require value exchange and a legal intention to commit under Kenyan contract law, whereas agreements do not always need these elements.
When Is a Contract Void in Kenya?
In Kenya, a contract is void (not enforceable) if:
- It is for something illegal, such as selling drugs.
- The one who deceives or misleads the second party into signing (fraud).
- It is signed by someone under the age of 18 or someone who is not of sound mind.
- The terms are too vague to be charted.
For example, in Kenya, oral contracts may lapse without evidence of mention. In 2023, the Judiciary of Kenya reported that 10% of contract cases were refused.
In Kenya, who is allowed to enter into a contract?
The following are people who can sign Contracts in Kenya under Kenyan contract law:
- Adults over 18 years old.
- Individuals who know what they’re signing (not drunk or mentally ill).
- Business, more significant corporate entities registered by law.
Children under 18 can’t sign unless they do it for essentials like food or school, and someone over 18 assists them. A 2021 Kenya Business Survey found that contract disputes involving illiterates represented 5% of contract disputes.
Are contracts formed digitally also valid?
Yes, in Kenya, they are, as long as they follow the exact requirements as paper contracts set out in the Kenya Information and Communications Act.
