Law of Contract (Amendments) Bill, 2025
The Law of Contract (Amendment) Bill, 2025, proposes to place significant limits on how parties can use contracts to walk away from responsibility. It seeks to enforce that the freedom of contract does not mean freedom to be unfair.
Kenya’s Law of Contract Act is famously sparse. It has for decades deferred to inherited English common law principles, rules that are designed for a different economy, with different power dynamics which when applied to the Kenyan context has resulted in the use of unfair and unconscionable terms. The Bill, then exists not only as a consumer protection reform bur as a deliberate step toward building a homegrown standard of contractual fairness that reflects Kenyan realities rather than Victorian-era English legal philosophy. This is not a technical tweak. It is a statement of direction.
What are the proposed changes?
Here are the six things the Bill proposes:
- The reasonableness test
Courts will no longer simply enforce exclusion clauses because parties agreed to them. They will now have to ask: was this clause objectively fair and reasonable given the circumstances at the time? That shifts significant power from the drafter of the contract to the judge.
- Negligence causing death
If your negligence causes someone to die, no contract clause, however carefully worded, will protect you. The Bill makes this an absolute rule with no exception. It is one of the most straightforward and significant provisions in the Bill.
- Abolition of volenti non fit injuria
Currently, putting your signature on a document can be taken as voluntary acceptance of whatever is in it including risk of injury or loss. The Bill proposes to put an end to that abolishing the volenti non fit injuria common law principle requiring an additional clause for acceptance of risk.
- Consumer contracts get a stronger shield
If you are a consumer, suppliers will no longer be able to use contract terms to avoid liability for breaking the contract, deliver something completely different from what was promised or simply not perform at all. Some limited exclusions may still apply, but only if they pass the fairness test.
- Guarantees creating supply chain liability
If a manufacturer or distributor issues a written guarantee or warranty on a product and it turns out to be defective, the Bill suggests that the guarantee be a direct source of non-excludable liability. This means that one does not need a direct contact with the manufacturer and the guarantee itself is enough. Businesses across entire supply chains, not just direct sellers, ought to be aware of this.
- Implied quality promises cannot be disclaimed
When you buy something as a consumer, the law already implies certain promises such as goods are of acceptable quality, fit for their purpose and match their description. The Bill proposes to impose these promises limiting suppliers to writing them away.
Who should be paying attention?
The Bill affects all legal persons entering into standard-form contracts. The most exposed are consumer-facing businesses, because the Bill’s toughest provisions target exactly that relationship. Commercial contracts are also not immune where the reasonableness test applies.
Remarkable Gaps
The Bill’s intentions are sound, however, there are significant silences that deserve scrutiny
- What does ‘reasonable’ actually mean?
The Bill introduces a reasonableness test but provides no criteria in its application. Courts will therefore have to build this from scratch which means real uncertainty for businesses and individuals alike in the application of the test.
- Who counts as a ‘consumer’?
The Bill’s strongest protections apply to consumers, but the term is not defined. This may need to be defined before enactment as the boundaries of protection remain unclear.
- Lack of a transitional provision
The Bill contains no transitional provisions as to its application on existing contracts. If it passes, there is need to define its application, whether it is only to the yet to exist contracts or the extent it applies to contracts in place.
The Bigger Picture
Kenya is not alone in contextualising the Law of Contract Act. Other countries such as the United Kingdom, Australia and South Africa all have statutory controls on unfair contract terms. What is notable here is the explicit acknowledgement that Kenya’s inherited contractual frameworks have been used to produce unfair outcomes and that domestic legislation is the tool to address that.
Freedom of contract has always had limits, making the lines more clear through this Bill is a conversation Kenya has needed to have for a long time.