Parliament moves to protect consumers from exploitative agreements
Empowering courts to intervene in unfair contracts strengthens protections for small businesses, consumers, and other parties who have historically been disadvantaged under existing contract rules.
Kenya may see a major shift in how contracts are handled if a new Bill before Parliament becomes law, granting courts the power to strike out agreements that are clearly one-sided or exploitative.
The Law of Contract (Amendment) Bill, 2025, sponsored by Wajir East MP Aden Daudi Mohamed, seeks to protect parties who are at a disadvantage and curb the use of unfair clauses in business and consumer dealings.
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“The principal object of this Bill is to amend the Law of Contract Act to protect parties to a contract against unfair and unconscionable terms,” the Bill’s memorandum explains.
Currently, Kenyan contract law, which largely follows English common law, binds parties to the terms they agree to, with courts stepping in only under exceptional circumstances like fraud, misrepresentation, duress, or undue influence.
If enacted, the law would prohibit contracts from including terms that remove or reduce liability for death caused by negligence. Clauses attempting to avoid responsibility for defective goods or services would also be deemed unenforceable.
The Bill explicitly states, “Where a contract term excludes or restricts liability for loss or damage resulting from negligence, an agreement to the term by a person shall not indicate the person’s voluntary acceptance of risk.”
Consumers will benefit from additional safeguards, while suppliers will be prevented from limiting liability for failing to deliver goods or services as reasonably expected.
Goods intended for personal or household use cannot include clauses that avoid responsibility if they are defective or cause loss due to negligence. Promises or guarantees that defects will be repaired or replaced will be legally enforceable.
The law could have far-reaching effects across multiple sectors, including retail, finance, real estate, and services.
The legislation aims to ensure fairness, accountability, and equitable treatment in all commercial and consumer agreements.
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