It is the use of unfair mental pressure or persuasion upon a party who intends to enter a
contract. This interferes with his ability to make an independent decision and the contract
becomes voidable, however it is expected that the aggrieved acts reasonably fast and
withdraws from the contract in good time otherwise his delay will make it binding. The
origin of undue influence is equity and force or threats amounting to force shall not be
The relationship between parties will be quite friendly as undue influence simply arises
because one of the parties is in a dominant position and he uses that position to acquire
an unfair advantage undue influence shall be resumed to exist in the following
Parent and child
– Employer and employee
– Lawyer and client
– Doctor and patient
– Government officer and civilian
– Guardian and ward (child)
– Spiritual leader and follower
Aucard vs Skinner
The plaintiff joined a protestant sisterhood an in order to show her devotion to the group
she donated most of her property to it. Subsequently she left the group after
disagreement with management and went up 5yrs later to reclaimer property on ground
of undue influence.
Held: although the chances of undue influence were quite high the plaintiff had taken too
long to withdraw from the contract and it was binding she could not legally reclaim the gift.
Elements, characteristics, ingredients, conditions, nature of undue influence.
There must exist a relationship between two or more parties whereby some of them
are in a dominant position.
The dorminant must use their position to acquire an unfair advantage
The weaker must suffer legal injury
Its origin is common law. It is the use of actual or threatened force upon a person who
intends to enter a contract. This interferes with his ability to make an independent
decision and the contract becomes void. Coercion is also known as duress.
There must exist actual or threatened force
It must be aimed at the person and not property but it includes a threat of
imprisonment or confinement.
The threat must make the other party to enter the contract
The threatened party must suffer legal injury.
It is a misconception or erroneous belief about something. Inadvertent slip made not by
design but by mischance and it is either a mistake of fact or law. Mistake of law is not
excusable because it is equivalent to ignorance of law which by itself is no defense.
However mistake of foreign law may be excused. Mistake of fact is actually an operative
mistake because it concerns the happening or not happening of something. Where it is
made in good faith (bona fide) it shall be excused by law and equity shall provide the
remedies of rescission, rectification of documents and specific performance.
Mistake of fact is of 2 kinds i.e
Unilateral or bilateral
Unil ater al mistake
It is one parties mistake where only one of the parties in the contract is mistaken and the
other is not aware the contract remains voidable for the time being until the other party
gets to know where after it is for one who knows to alert the other and they both decide
on what should be done.
Where the party who has knowledge deliberately remains silent such silence amounts to
fraud and the contract shall be void.
Unilateral mistakes usually arise in cases of mistaken identity whereby a person who
intends to transact with a particular party ends up transacting with an imposter who takes
advantage by pretending to be the power and he actually is not. The contract becomes
void upon this discovery.
Case Boulton vs Jones
Jones addressed a letter to his friend a mister Brocklehurst and requisitioned for specific
goods unknown to Jones his friend had long transferred the business to Boulton who
received the letter and sent the requisitioned goods knowing well that Jones had mistaken.
When Jones realized his own mistake he rejected the goods and was sued.
Held: it was evident that Boulton knew that Jones only intended to transact with a
particular person this silence amounted to fraud and the contract was void.
It is simply both parties mistake and it falls into two categories ie common and mutual
It is identical in nature because both parties make exactly the same mistake by thinking in
the same manner only to realize later that their thoughts were wrong and the contract
becomes void. Common mistake may arise in the following;
Mistake on existence of subject matter of the contract- the parties believe that the
subject matter of the contract exists at a particular place or in a particular form. Only to
realize later that this is no longer the case. The contract becomes void.
Case: Coutourier vs Hastie
The contract concerned the sale of corn which unknown to both parties had already been
sold by the ship’s captain in order to avert greater loss because the corn was soon rotting.
Held: the contract was void upon this discovery and only deposit paid could be legally
Mistake on a fundamental fact of a contract
The parties believe that a certain relationship or situation exists regarding them, only to
realize later that this has never been so. The contract becomes void upon this discovery.
Case: Galloway vs Galloway
The parties believing to be husband and wife made a separation agreement whereby the
man promised to pay the lady a specified maintenance fee subsequently they discovered
they were not married lawfully the lady still demanded fee.
Held: the promised sum could not be legally claimed because it was based on a non existent
It is a non identical mistake because each party thinks differently from the other and for
that particular reason consensus and idemdoes not exist the contract becomes void.
Legally parties have no obligation to keep enlightening each other everytime one feels
that the other is mistaken unless the mistake is quite material that it will result into great
loss, if indeed it is material the party with knowledge must alert the other otherwise equity
will regard the silence as fraud and the contract will be void. If it is minor the court is
likely to interpret it as a poor bargain and the contract will remain valid.
Case: Scriven Bros vs Hindely & Co
The defendant made his bid for a lot of tow thinking it was highly priced hemp, on his part
the auctioneer thought that the defendant was either ignorant of the market price of tow
or simply a spendthrift. Meanwhile the plaintiff (owner of the fodder) had realized the
defendant’s mistake but deliberately remained silent hoping to earn so much for something
whose value was so low. When the defendant realized his own mistake he rejected the
goods and was sued.
Held: two issues had to be determined by court ie
a. Between the defendant and auctioneer there was a mutual mistake because each
part though differently from the other
b. Between the plaintiff and defendant there was a unilateral mistake because the
plaintiff had realized the defendants mistake and deliberately remained silent
hoping to earn so much.
This was fraudulent on the part of the plaintiff and the contract was void.
Mistakes which will not affect validity of contracts
A party will not be relieved from his obligation merely because he entered the contract as
a result of a mistake. In the following instances the existing mistake shall be overlooked
by the court and the contract will remain binding.
Mistake of law
Such mistake will not affect the contract because it is equivalent to ignorance of law
which by itself is not defense.
Mistake by a party expressing his intention
Where a person’s intention is expressed by mistake such mistake is his own and it will not
affect the contract.
Case: Higgins vs North Hampton Corporation
The plaintiff contracted to build several houses for the defendant and mistakenly gave the
wrong price. The defendant accepted the price only to be told late that it was a
miscalculation which had to be changed.
Held: the plaintiff’s mistake was his own and the contract remained binding on him because
a valid offer and acceptance had been tendered.
Mistake on the meaning of a trade description
Where a party does not understand the meaning of a particular trade or business term and
he does not seek guidance he shall bind himself to all matters regarding that transaction.
Mistake of judgement
This is also known as error of judgement where a person makes poor judgement in
analyzing the market price or value of a commodity. His mistake shall not affect the
contract if he voluntarily decided to rest on that decision. The court will simply regard it
as a poor bargain and the loser must pay the price for his ignorance.
Mistake by a party concerning his ability to perform a task
Where a person promises to complete a task within a specified period or manner and he
late fails to do so, he cannot plead the excuse of having miscalculated his ability and the
contract will be binding on him.
Parties are at liberty to select their favourable terms of contract and the court shall
enforce such terms as long as they are legal and clear. Statements made by a party with
an intention to convince the other to enter a contract shall be known as representations
and when they turn out to be false or untrue they become misrepresentations.
Generally persons have no obligation to make statements to one another but in the event
that person decides to make a statement he imposes upon himself the legal obligation to
refrain from making a false or untrue statement because legally whatever a person says
voluntarily can and shall be used against him, if it turns out to be false or untrue.
Elements of misrepresentation.
i. It must be misrepresentation of fact and not of law of opinion
Misrepresentation of law is not excusable because it is equivalent to ignorance of law.
Misrepresentation of opinion is not actionable because it falls under a person’s freedom
of expression. However where the opinion is expert opinion and it turns out to be false or
untrue the misrepresentation may be held liable in negligence or fraud. This is based on
the fact that experts ought to remember that their opinion is highly regarded hence they
must be extra careful before they make any expert opinion.
Case: Bisset vs Wilkinson
A person advertised his firm for sale and upon being approached by a prospective
purchaser who wanted to keep sheep on the firm the seller informed the purchases that
he had never used the firm for sheep rearing but in his opinion an estimate of 2000 sheep
will do. The firm was purchased and 2000 sheep brought on it but they could not be well
accommodated. The purchaser then sued for fraud.
Held: this was simply misrepresentation of opinion and the purchaser ought to have made
up his mind as well. The claimfailed.
|The fact misrepresented must be a material fact ie one which is most important
and relevant to the entire contract ie it should not be a mere puff.
|It must have been relied upon by the aggrieved party and influenced his
The aggrieved must suffer legal injury.
Types of misrepresentation
Innocent misrepresentation – this is an untrue statement made innocently with an honest
belief in its truth and without intention to deceive. Damages shall not be awarded in this
case because the misrepresentator did not aim to lie. The only remedy available shall be
rescission if it is possible to return the parties to their original position.
Innocent misrepresentation usually arises where a party who anticipates the occurrence
of a positive situation makes a binding statement based on his anticipation only to be
disappointed late when what he anticipated falls to occur.
Case: Derry vs Peek
In order to boost its capital the defendant company floated a prospectus stating that it
was currently dealing in a steam power trams yet they were actually dealing in horse
pulled carriages but had applied to the registrar of companies to allow change of
objectives and fully believed that application would succeed. The plaintiff relied on the
information and purchased the companies’ shares only to be disappointed later when the
registrar rejected the defendant application and the plaintiff then realized for first time
the company was still dealing in horse pulled carriages. The plaintiff sued for fraud.
Held: even though information in their prospectus was untrue the defendant had not aimed
on deceiving the public because there was an honest belief that the registrar would allow
change of objectives. The claim failed and all that could be granted was rescission.
Negligent misrepresentation- this is an untrue statement made hurriedly negligently or
recklessly without intention to deceive but without taking necessary precaution to verify
the truth even though the maker of such statement has the required capacity to enable
such verification. Its origin is equity and it usually affects experts. Its basis is that
experts and person with relevant facilities/capacities shall be in position to influence the
general public with their statements hence thy must make proper verification before
giving their expert opinion otherwise they’ll be liable in negligence. Contracts in this
category shall be void and remedy is rescission and damages for negligence.
Case Hedley Byrne vs Heller and Partners
The plaintiff advertising company offered to advertise for a firm on credit basis but on
condition that the firm proved it was credit worthy. The firm then instructed its bankers
(defendant) to advice the plaintiff on its financial status. The defendant on its part
hurriedly and without verification made an undertaking to the plaintiff that the firm was
credit worthy and good for business. Had the defendant taken time to peruse the records
it would have realized that the firm was facing cashflow problems and as risky to deal with.
The plaintiff relied on the information and transacted on the firm only to be disappointed
when the firmwas unable to settle its account for services rendered. The plaintiff sued
the defendant for fraud.
Held: even though the defendant’s bankers had not intended to deceive they had acted
hurriedly, negligently and unprofessionally without verifying the truth and were therefore
liable in negligence.
Fraudulent misrepresentation- this is a false statement made knowingly with a deliberate
intention to deceive and without belief in its truth. It is a serious civil and criminal offence
which simply amounts to deceit. Hence severely punishable contracts in this category are
void and the remedy is rescission plus damages for deceit.
Case: Bartholomew Nyorabu
Patronilla vs Ndyamukama
The defendant had sold land which she described in the agreement as forty times sixty
paces yet it was actually 40×60 feet upon purchasing the land the plaintiff realized the
irregularity and immediately sued for fraud.
Held: the defendant was indeed liable for fraud because she knew paces were different
and longer than feet and she simply intended to take advantage.
The general rule of law is that “no cause of action shall arise out of an illegal
“Ex Turpi Causa Non Oritur Actio”
“Ex dolo malo Oritur Actio”
This simply emphasizes that the law of contract shall not support illegality, hence where
the purpose of the transaction is illegal the entire contact becomes illegal and void ab
intio. This is due to the fact that the objective underlying such transaction was opposed
to the law and the law cannot therefore stand by it.
Contracts shall be regarded illegal due to the following;
That they are opposed to public policy
That they are wagering contracts
That they are in restraint of trade
They interfere with judicial administration
Contracts opposed to public policy
a) Contracts containing immoral elements and those promoting immorality ie
Case: Pearce vs Brookes
An immoral lady hired a horse driven carriage for purposes of roaming the city streets and
promoting her business. Subsequently she failed to pay rental fee for the carriage and
Held: the carriage owner could not succeed in claiming for the rental fee because he had
all along known the purpose of which the carriage was being used.
b) Contracts in restraint of marriage
Absolute restraint of marriage is void at law but partial restraint shall be allowed if
Contracts interfering with the sanctity/sacredness of marriage
Marriage is a sacred contract and the law ensures that this institution remains pure in
purpose without limitation to its period. On this basis a marriage contract intended for a
period less than life shall be void and unenforceable.
c) Marriage brokerage contracts
Under common law marriage is defined as the union of one man to one woman for life in
exclusion of all others. For this reason where a person who is already lawfully married
enters a new marriage contract without dissolving the existing one such new contracts
shall be void and unenforceable and it will amount to an offense known as bigamy. An
exception exist under African customary law and Islamic law wherein polygamy is
permitted but strict traditions requires that the man discloses to the wife his intention to
Case: Wilson vs Carnley
The defendant who was already lawfully married entered another marriage contract with
the plaintiff’s spinster, whereby he promised to marry her upon the death of his sick wife.
Subsequently the wife died and the defendant suddenly changed his mind by refusing to
honour his promise.
Held: there was no breach in the refusal because at the time the new contract was being
made the defendant did not possess contractual capacity.
d) Contract to commit crime
e) Contracts to commit tort
f) Contracts to commit fraud
g) Contracts promoting corruption in public life
h) Contracts promoting conflict and enmity between states
A wager is a promise to pay money, transfer property or undertake any other task upon
the happening of an uncertain event.
It involves betting and gambling and it is based on speculation and the desire to enrich
oneself eg betting over the results of a sport, playing cards for money, playing dangerous
games such Russian Roulette.
The state will on a number of occasions licence similar transactions due to their social
economic benefit as long as such transactions are reasonably safe. However they can
only be carried out under the supervision betting control and licencing board and once
this is done the transaction becomes valid. Eg Kenya Charity Sweepstake, Toto 649,
NB; a wager is different from an insurance contract because wagers concerns
speculation and the desire to get rich quickly by applying the least effort while insurance
is a contract of indemnity based on the scientific proof determined through application of
actuarial science. It aims to reduce the loss suffered by an unfortunate individual who has
taken an initiative to share in the loss of others by purchasing an insurance cover.
Contracts interfering with judicial administration
This runs against the process duly established by law and they include the following;
Maintenance –it is promotion of ligation, where the provider of financial assistance does
not have any interest in the case and he is simply motivated by malice. Such transactions
encourage conflict in society and the law cannot support them.
A lends B money to enable B file a case against C simply because C is his business rival.
The court cannot assist A in recovering,
If A is B’s relative
Where lending was on humanitarian grounds
Where A is an interested party (A has “locus stand”) right to be heard eg a cotenant.
It arises where a person assists another with money or evidence for a case on condition
that the proceeds from judgement will be shared between the parties. It is a behavior
which compromises professionalism hence falling under professional misconduct. It is
legally condemned through various statues including the Accountants act cap 531 and the
Advocates act cap 1 6.
Contracts in restraint of trade
This is a contract whereby a party known as covenantor agrees with another known as
covenantee to restrict such others liberty in future to carry on business or employment
with 3rd parties who are not party to the covenant. Restraint shall be regarded justified
where it aims to protect interests of both parties. Contracts in restraint of trade shall
cover the following;
Employment contracts– an employer is entitled to protect his business against unfair
competition from his present or past employees.
Sale of business- a person who sells his business shall be entitled to sell it with its
goodwill. The agreement may therefore contain a clause which prohibits the purchaser
from commencing similar business in a particular area or period.
Sales agreements – they are also known as trade agreements a person may contract to
deal with a specific trader or business entity only for his services and goods.
The test to determine reasonableness of a restraint shall be based on the following;
The area of restraint must not be excessively wide or vague
Duration of restraint must not be excessively long or vague
Restraint should not cover activities which are irrelevant to the interests
protected and it should not be absolute restraint of a person’s right exercise his
Restraint must not aimat stopping legitimate competition and it should not run
against public policy.
Discharge of contract
There are six primary modes of discharging a contract
By operation of law
This is the main mode of discharging a contract. Precise performance means absolute or
total performance of one’s obligation and it enables the party concerned to be completely
discharged and freed from further performance. Equity enables parties to be discharged
from further performance even when they have not precisely performed their task. These
instances are the exceptions to precise performance and they are six in number. The
concerned persons are therefore entitled to compensation on quantum Meruit basis.
Substantial performances – it arises where a party has made an effort to fulfil his
obligation and task accomplished is material and more than half the entire assignment.
Partial performance- it arises where a party has made an effort to accomplish the
assigned task but the extent of work done is immaterial and less than half the entire
Divisible contract- it arises where the contract can be split into various parts and the
party has only managed to accomplish some of the parts.
Prevention of performance by defendant – the plaintiff is prevented from performing his
obligation by the defendants behavior eg where such defendant fails to pay the required
deposit for commencement of work or he fails to supply the required working material.
Tender performance – arises where a party is willing and able to accomplish a task but
the other party refuses to accept performance for no apparent reason.
Tender of payment – a valid legal tender of payment is made by a party as earlier agreed
but the other willfully waives or rejects to accept the money. The party paying shall be
discharged from further obligation.
Discharge by agreement
A contract can be discharged by agreement simply because the same contract was formed
through an agreement. However it is legally advisable that a new agreement to discharge
an existing contract be evident in writing and signed by the concerned parties so as to
avoid future disputes. Instances of discharge by agreement.
By waiver- it is also known as surrender and it arises where the contract is still executory.
It is deliberate abandonment of one’s right in the contract and if done consciously the
other party is completely realized from further obligation. The document drawn by parties
as evidence of the waiver shall be known as a deed of release or a consent.
By novation –it is substitution of the main party to the contract with a third party who
ends up performing the exact which was to be performed by the main party.
By accord and satisfaction
Discharge by breach
Breach arises where a party fails to perform his promise. Every breach attracts legal
remedy and the consequences will depend on whether it is breach of condition or
warranty. Instances of discharged by breach.
Miscalculation– it arises where a party fails to perform his obligation even though he made
an effort but he had miscalculated his ability.
By renounciation/renunciation- it is deliberate refusal by a party to fulfll his obligation. At
times the refusal may be disguised through and unjustified excuse eg where a party who
had previously agreed to be paid a specified sumas consideration suddenly changes his
mind and insists that such amount is insufficient.
By self disablement – a person who was full qualified and able to accomplish a task
suddenly involves himself in an activity which makes it impossible for himto fulfill what he
has promised. The aggrieved party shall retain the right to wait until moment of
performance and then sue under actual breach or take chances and immediately sue under
Case: Hochester vs De la tour
A person was offered and he accepted a job as a tour guide which was to start late in
June. In early May the prospective employer informed the successful applicant that his
services would no long be required. The applicant sued immediately upon receiving this
Held: breach of contract is either actual or anticipatory in nature. The claimsucceeded
because it was filed basing on anticipatory breach.
By operation of law
– By lapse of time
– By death of a party
– By bankruptcy or insolvency
– By substitution or alteration of the subject matter of the contract without the
other party’s knowledge or consent ref karsale vs Wallis.
Discharge by merging
Legally it falls under discharge by agreement but it can also stand on its own because it is
both a mode of discharge and formation of the contract. It arises where more than one
transaction eventually merge into a single contract. On many occasions contracts
commence with oral pronouncements which are later transformed into a written
agreement when the written ie signed by the concerned parties the oral is legally
discharged and it merges into the new written contract.
Discharge by frustration
Frustration arises where a person inability to accomplish a task is due to reasons beyond
their control. This is governed by the doctrine of frustration also known as doctrine of
subsequent impossibility or supervening impossibility.
Instances of frustration.
Distraction of subject matter of the contract
By an act of God ie vis major/force majeur- these are forces or events not controlled by
human efforts eg earthquakes, floods, thunderstorms, elnino, Katrina, tsunamis, la nina.
By an inevitable accident – this should be the kind of accident which cannot be controlled
by ordinary skills otherwise a party shall be held liable in negligence.
Case: Taylor vs Caldwell
A person hired a hall for a music concert and a few days before the first concert was
scheduled the hall was burnt down.
Held: the contract was discharged by frustration and the plaintiff could recover the
deposit and other relevant expenses incurred.
By death legal & physical incapacity of a party eg severe sickness. Ref Robinson vs
By non-existence of state of things or events necessary for performance eg lack of rain,
change of weather, non occurrence of specified events.
Case Krell vs Henry
A guest book into a particular hotel room with a specific aim of having a clear view of the
coronation of King Edward the 7th subsequently the king fell ill and the ceremony had to be
Held: the guest was not bound to remain in the hotel roomnay much longer because the
purpose of hiring it had been frustrated.
By charge of law and subsequent illegality
By statutory authority or government interference – this is governed by the principle “the
interest of state (population/majority) is the supreme law ie “sallus populi suprema lex”
there are instances where the state shall impose a ban or restriction of certain activities
in the interest of public welfare and national security eg during declaration of war
between states or when an epidemic strikes.
Effects of frustration
When frustration occurs parties are likely to suffer great loss and inconvenience. Equity
provides the following rules to reduce loss.
i. All money paid before frustration is refundable
ii. All money owed before frustration is not payable
iii. Parties recover costs and expenses incurred before frustration
iv. However receives the higher benefit should compensate the other on quantum
– To make direct legislation
-To amend the law
-Represent electorate in
-Check on the working of
the executive and judiciary
under the systemof checks
|President, ministers Ps
Enforce the law
Represent the state
international through the
Make law under subsidiary
Check on the working of
the judiciary & legislature
Interpret the law
Guardian of the constitution
Make law under judicial
Check on the working of
legislature & executive under the
systemof checks & balances
The main organs of government are the legislature, executive and judiciary
They are established by the constitution in accordance with the following;
Executive- it is established under chapter 2 of the Kenyan constitution. It is headed by the
president as head of state and government. Other principal offers include;
Prime minister– who shall be chief among all ministers as the person incharge of coordinating government affairs and ministers.
He shall be deputized by two ministers known as deputy prime minister.
Vice president– who shall be an assistant to the president an da minster with other
Cabinet ministers– specifically assigned particular ministries. They shall be assisted by
The Attorney General- who shall also be a cabinet minster with the responsibility of
advising the president and cabinet on legal matters.
Permanent secretaries, commissioners etc – the primary function of the executive is to
enforce the law and co-ordinate government functions.
Parliament – it is established under chapter 3 of the Kenyan constitution and popularly
referred as the legislature. It is headed by the speaker of the National assembly. Other
principle officers in parliament shall be;
Mps representing the various constituencies and special interests. This Mps include the
president and attorney general who is simply ex-official as a legal advisor to parliament.
Clerks of the national assembly- parliament is charged with the responsibility of setting
the required legal procedures to be undertaken in the house authority to
prologue/adjourn and dissolve the sessions.
The Judiciary- it is established under chapter 4 of the Kenyan constitution and it is also
popularly known as Judicature. It is headed by the chief justice who shall be regarded as
the senior most legal practitioner in the state.
Other principal offers include;
Appellate and puisne judges –chairmen and other legal practitioners
Registrars-filing and administration of cases
The judiciary comprises of the court of Appeal, high court and subordinate courts. Also
included is the judicial service commission which is charged with the responsibility of
laying down regulation and handling grievances arising in the judiciary.
The primary function of the judiciary is to interpret the law and prescribe punishment.
Define separation of powers and highlight its importance
Government comprises of 3 branches ie legislature, executive and judiciary whereby each
branch has specific functions to perform.
The doctrine of separation of powrs is a constitutional concept which aims at political and
economic stability through observance of the rule of law. It emphasizes that each organ
must work separate and independent from interference by the other organ. The
importance of applying this doctrine is;
It prevents the rise of dictator shiop and safeguards the individuals liberty to the extent
that the individual is then able to enjoy his rights and freedom.
It checks against misuse and abuse of power and in so doing it helps to protect national
resources and ensure fair distribution of the same. It enables specialization of the
functions of each government organs and improves productivity and efficiency in
Independence of judiciary and factors which favour independence
The judiciary is the law interpreting organ of the government. The term independence of
judiciary is a constitutional concept which actually falls under the doctrine of separation
of powers. Its objective is to ensure political and economic stability through observance
It emphasizes that each one of the government organ should keep off interfering with the
functions of the judiciary. This shall then enable citizens to enjoy their rights and freedom.
Factors favouring independence of judiciary
Security of tenure
Separation of judiciary from the legislature and executive
Provision of special privileges (immunity fromprosecution)
Respect of the rule of subjudice.