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contract drafting checklist
Introduction
Drafting a contract is a meticulous process that requires attention to detail and a thorough understanding of the relevant laws and regulations. In Kenya, contract law is primarily governed by the Law of Contract Act (Cap 23), the Sale of Goods Act (Cap 31), and the general principles of common law. This checklist aims to provide a comprehensive guide to drafting a contract in Kenya, ensuring that all essential elements are covered to create a legally binding and enforceable agreement.
Table of Contents
Preliminary Considerations
Identification of Parties
Purpose of the Contract
Legal Capacity
Governing Law
Essential Elements of a Contract
Offer
Acceptance
Consideration
Intention to Create Legal Relations
Contract Terms
Express Terms
Implied Terms
Conditions and Warranties
Specific Clauses
Payment Terms
Duration and Termination
Confidentiality
Dispute Resolution
Force Majeure
Indemnity and Liability
Execution and Formalities
Signatures
Witnesses
Notarization
Post-Execution Considerations
Storage and Record-Keeping
Review and Amendments
1. Preliminary Considerations
Identification of Parties
Names and Addresses: Clearly state the full legal names and addresses of all parties involved.
Legal Status: Identify the legal status of each party (e.g., individual, corporation, partnership).
Purpose of the Contract
Objective: Clearly define the purpose and objectives of the contract.
Scope: Outline the scope of work or services to be provided.
Legal Capacity
Age and Mental Capacity: Ensure that all parties have the legal capacity to enter into a contract, as per the Law of Contract Act (Cap 23).
Authority: Verify that representatives signing on behalf of entities have the necessary authority.
Governing Law
Jurisdiction: Specify that the contract will be governed by the laws of Kenya.
2. Essential Elements of a Contract
Offer
Definition: An offer is a clear proposal to contract on specific terms, made with the intention that it will become binding upon acceptance.
Clarity: Ensure the offer is clear and unambiguous.
Acceptance
Unconditional: Acceptance must be unconditional and correspond exactly with the terms of the offer.
Communication: Acceptance must be communicated to the offeror.
Consideration
Definition: Consideration is something of value exchanged between the parties.
Adequacy: Ensure that the consideration is adequate and lawful.
Intention to Create Legal Relations
Presumption: There must be a mutual intention to create legal relations, especially in commercial agreements.
3. Contract Terms
Express Terms
Written Terms: Clearly outline all the terms agreed upon by the parties.
Specificity: Be specific to avoid ambiguity.
Implied Terms
Statutory Implied Terms: Be aware of terms implied by statutes such as the Sale of Goods Act (Cap 31).
Common Law Implied Terms: Consider terms implied by common law, such as the duty to act in good faith.
Conditions and Warranties
Conditions: Fundamental terms that go to the root of the contract.
Warranties: Minor terms that do not go to the root of the contract.
4. Specific Clauses
Payment Terms
Amount: Specify the amount to be paid.
Schedule: Outline the payment schedule and method of payment.
Late Payment: Include provisions for late payment penalties.
Duration and Termination
Term: Specify the duration of the contract.
Termination Clauses: Outline the conditions under which the contract can be terminated.
Confidentiality
Non-Disclosure: Include clauses to protect confidential information.
Duration: Specify the duration of the confidentiality obligations.
Dispute Resolution
Arbitration: Consider including an arbitration clause.
Jurisdiction: Specify the jurisdiction for any legal proceedings.
Force Majeure
Definition: Define what constitutes a force majeure event.
Consequences: Outline the consequences of a force majeure event on the contract.
Indemnity and Liability
Indemnity: Include indemnity clauses to protect against specific losses.
Limitation of Liability: Specify any limitations on liability.
5. Execution and Formalities
Signatures
Signatories: Ensure that all parties sign the contract.
Date: Include the date of signing.
Witnesses
Requirement: Determine if witnesses are required.
Details: Include the names and addresses of witnesses.
Notarization
Requirement: Determine if notarization is required for the contract to be enforceable.
6. Post-Execution Considerations
Storage and Record-Keeping
Copies: Ensure that all parties have copies of the signed contract.
Storage: Store the contract in a safe and accessible place.
Review and Amendments
Periodic Review: Periodically review the contract to ensure compliance.
Amendments: Outline the procedure for making amendments to the contract.
Conclusion
Drafting a contract in Kenya requires careful consideration of various legal elements and specific clauses to ensure that the agreement is comprehensive and enforceable. By following this checklist, you can create a well-structured contract that meets the legal requirements and protects the interests of all parties involved. Always consult with a legal professional to ensure that your contract complies with Kenyan law and addresses all necessary aspects.
Answered by mwakili.com