A breach of contract is when one party to the agreement fails to fulfill its obligation under a legally binding contract. Whether oral, written, or implied, this could be a supplier failing to deliver goods, a service provider not meeting a deadline, or a party breaching agreed terms in Kenya.
The definition of a breach of contract focuses on a breach of the promise, which is the essence of the contract that leads to damages and/or injury to the innocent party.
Contracts are fundamental in business, employment, real estate, and personal dealings. Thus, you need to know your rights and the available remedies for breach of contract under Kenyan law.
For instance, a landlord who breaches the terms of the covenant of quiet enjoyment by failing to repair a leaking roof can cause a rental property to become uninhabitable, generating havoc in tenants’ lives.
In the same way, a breach of contract in the workplace, such as an employer failing to pay wages or an employee abandoning their duties, can result in expensive disputes.
Identifying a breach of contract early allows you to address the issue through negotiations or legal recourse proactively.
Here is everything about a breach of contract, the types, how to navigate a breach of contract and how to get help from a breach of contract attorney.
Types of Breach of Contract
Breaches are also different in their scope and impact, and Kenyan law categorizes breaches into several groups, each with its implications:
Material Breach of Contract
This material breach defies the contract’s meaning, like a contractor walking away from a half-built house.
A material breach of a contract usually serves as grounds to terminate the contract and seek substantial damages for breach of contract.
For example, the breach may be considered material if a vendor delivers faulty goods vital to your business.
Minor Breach
This could be a small problem, such as delivering goods a couple of days late, which does not ruin the contract’s value. Although you can still sue for damages for breach of contract, the contract is usually still in effect.
Anticipatory Breach
When one side indicates they will not meet their obligations ahead of time, like a caterer who cancels days before an event. This enables you to prepare a breach of contract claim or explore other options.
Fundamental Breach
One that’s so extreme that it allows the non-breaching party to terminate the contract altogether, highly similar to a material breach but emphasizing the contract’s complete disintegration.
A breach of contract attorney can help clarify what category your case falls under and whether the dispute is, in fact, complex.
Legal Framework Governing Contracts in Kenya
In Kenya, contracts are regulated by a comprehensive legal framework, notably the Law of Contract Act, Cap 23, which sets out the essential elements for a valid agreement.
This is complemented by common law principles from English law tailored to the Kenyan circumstance.
There are other specific statutes for certain contracts, such as the Sale of Goods Act (Cap 31), applicable for business contracts, and the Employment Act (2007), regarding labor contracts.
For instance, quitting without notice would be a breach of the employment contract by the employee. It could violate the Employment Act’s provisions, which result in penalties or claims.
For a contract to be valid, it must have:
- An offer
- Acceptance of the offer
- Consideration (something of value that is exchanged)
- Must be mutual
Without these, companies can find it challenging to enforce dress contracts.
Courts place a high value on the enforcement and honor of valid contracts, but when a breach of contract has occurred, they will provide remedies to make things right.
For example, in a breach of contract by landlord case, tenants may apply for court orders requiring repairs to be made or for compensation.
Given the complexity associated with this framework, especially when commercial disputes or breach of work contract issues (concerning rights under statutory law) are at play, enlisting a breach of contract attorney is often necessary when navigating this framework.
Some communities recognize customary contracts, which are also recognized by Kenya’s judiciary, as long as they are rooted in the principles of the constitution. Explaining how it works is crucial because it’s so layered, but that’s also its strength and flexibility.
Common Causes of Breach of Contract
Financial Stress
A party that cannot fulfill obligations or a business that is not paying suppliers. This is common in breach of contract examples based on small enterprises.
Involuntary
Using vague, ambiguous, or poorly defined terms, such as violating a job contract where job duties are unclear, results in unmet expectations.
Negligence
Failure to use due care, like the landlord not fixing structural issues, is a breach of contract by the landlord.
Intentional Nonperformance
A party purposefully ignores terms, such as when a contractor takes a deposit and never gets to work, resulting in a breach of contract lawsuit.
External Disruptions
If written into the contract, things like strikes or natural disasters could be excused via “force majeure” clauses.
Knowing the cause allows the company to determine if legal rights should be pursued or other options, such as renegotiation.
An employee’s breach of his employment contract due to unforeseen personal issues might be something that can be resolved amicably, such as through mediation.
Steps to Take When Facing a Breach of Contract
So, how do you proceed if you encounter a breach of contract? Follow these steps:
Check the Contract
Verifying the terms, responsibilities, and any dispute section or penalties for breach of contract. That resolves whether it’s a material breach of contract or something insignificant.
Written Evidence
Collect documents such as emails, receipts, contracts, or photos. Photos of property damage (to support a landlord breach of contract claim).
Notify the breaching party.
Give written notice that they were not in compliance and demand that they comply or pay a penalty. A formal letter can resolve disputes caused by a breach of contract complaint.
Consider Negotiation
It is worth doing so if differences in opinion can be discussed amicably directly or through a mediator. This is especially true in case of minor breaches or potential for continued collaboration with a valuable client.
Seek Legal Advice
Breach of contract cases can be complex, like nuances involving labor, where legal representation from a breach of contract attorney is crucial.
File a Lawsuit
If the issue goes unresolved, you can file a breach of contract claim in court, asking the court to provide remedies, including damages or specific performance.
For one, confidentiality must be weighed against protecting evidence and statutory timelines, like the six-year limitation period against bringing a claim for breach of contract in Kenya under the Limitation of Actions Act.
Legal Remedies for Breach of Contract
Kenyan courts offer various remedies for breach of contract to compensate for the damage caused:
Damages for Breach of Contract- Payment of damages for losses, which can include:
Compensatory Damages– Generally lost money (money you paid for goods not delivered)
Liquidated Damages- Fixed sums predetermined with the contract as damages for breach of the contract.
Specific Performance- An order of the court for the breaching party to perform their duties, frequently applied to unique and rare contracts, such as land purchases.
Injunction- An order prohibiting further violations, like preventing a competitor from using proprietary data.
Rescission- A remedy that cancels the contract and restores the parties to their status before entering the contract (usually for a material breach of contract).
Restitution- Compensating the innocent party for any benefits received, such as the return of forehanded deposits.
A breach of contract lawyer can evaluate which outcome is appropriate for your case while trying to balance the cost and the outcome.
The Role of Mediation and Arbitration in Contract Disputes
A breach of contract doesn’t always require court battles. Mediation and arbitration, both forms of alternative dispute resolution (ADR), provide an effective and economical solution:
Mediation
You are a neutral third party that helps reach an agreement through conversation. This works well for disputes where tenant-landlord relationships won’t be ruined, like landlord breach of contract in petty maintenance issues.
Arbitration
Each party gives up the right to go to court in exchange for a binding decision by an arbitrator, which is frequently found in almost every commercial contract with ADR clauses. It’s speedier than court and a good fit for complex breach of contract claims.
Most contracts, especially business contracts, often contain ADR clauses to prevent time-consuming breach of contract complaints. Unlike public court records, these options also save time and money while keeping things private.
How to Protect Yourself from Breach of Contract
Avoiding a breach of contract is better than fixing one. Adopt these strategies:
Write detailed contracts
Specify terms, deadlines, and fines for contract violations. Ambiguity makes for disagreement, like in breach of work contract disputes involving unclear deliverables.
Add Alternative Dispute Resolution (ADR) Clauses
To ensure any disputes are resolved in mediation or arbitration, include this language at the front end of the contract.
Perform Due Diligence
Investigate the other party’s trustworthiness, particularly in high-stakes transactions such as real estate or corporate partnerships.
Compliance Monitoring
Monitor performance at regular intervals, e.g., verify if employees are adhering to terms to avoid breach of employment contract by the employee.
Seek Legal Review
Work with a breach of contract attorney to review contracts for enforceability and compliance with Kenyan law.
Use Written Agreements
These deals don’t have to be snowball-sized; written agreements help track more matters than verbal shares.
Adopting a proactive approach is much more beneficial, even when the contract creates a defensive mechanism.
Final Words
A breach of contract could affect your business, employment, or personal life, but the legal system in Kenya has strong mechanisms to deal with it.
Whether it’s addressing a material breach of contract, a breach of contract by the landlord, or a breach of work contract, knowing your options is key.
You can resolve disputes effectively if you pursue remedies for breaching the contract, such as damages or specific performance, or mediate/arbitrate the issue.
Complex breach of contract laws can be challenging to wade whether you decide to file to bring about a breach of contract claim or whether you’re looking to settle, and working with a breach of contract attorney can help with that.
