ADVOCATES TRAINING PROGRAM 2024/2025

ATP 107: CONVEYANCING

CLASS C FIRM 14
COMPLEX AGREEMENTS

INTRODUCTION

A contract or an agreement is a legally binding document between two or more parties that
outlines the terms and conditions of their relationship. It typically includes details such as the
obligations of each party, the duration of the agreement, payment terms, and what actions can be
taken if one party fails to fulfil their obligations. Contracts and agreements are used in various
situations, such as business deals, employment relationships, and rental agreements, to ensure
that all parties involved understand their rights and responsibilities.

Ingredients of a valid agreement:

1. Offer
2. Acceptance
3. Capacity
4. Legality
5. Consideration
6. Intention

Although an agreement does not confer the legal rights of a property on any of the parties, it is
used to define the rights applicable to the parties, their liabilities and duties etc.

An agreement in conveyancing is used for the following purposes;

 1. To meet the conditions of the law on the sale and purchase of land. It is a requirement
that all agreements for the sale of land be prepared in writing.
2. It defines the various terms and conditions for the sale and purchase of land.
3. It gives the contact information of the parties involved.
4. It provides all the details that appertain to that conveyancing transaction.

LEGAL FRAMEWORK

Law of Contracts Act Cap 23 - English law shall apply to agreements as in accordance with
this act.

Electronic Transactions Act - plays a crucial role in facilitating the use and enforceability of
smart contracts in Kenya. Consequently, smart contracts, which are digital and automated, can be
deemed legally enforceable in Kenya, provided they meet the requirements of a valid contract,
such as offer, acceptance, consideration, and intention to create legal relations.

Section 83J of the Kenya Information and Communication Act (KICA) - provides that save
for statutorily exempt contracts, a contract shall be valid and enforceable even when the contract
is formed electronically.

Internationally, the United Nations Convention on Contracts for the International Sale of
Goods (SISG) has been recognized as the most successful attempt to unify a broad area of
commercial law at the international level. The self-executing treaty aims to reduce obstacles to
international trade, particularly those associated with choice of law issues, by creating
evenhanded and modern substantive rules governing the rights and obligations of parties to
international sales contracts.

COMPLEX/LONG-FORM AGREEMENTS

Generally, an agreement will contain five parts namely: the parties, particulars of sale, special
conditions, general conditions and execution in compliance with the Law of contract Act 23,
section 3(3). However, a long form /complex agreement will have certain features that are
different or more detailed as compared to a short/simple agreement. These are;

1. Length -it is more detailed and complex and therefore longer

 2. Details – It contains a comprehensive description and explanation of all the rights and
duties of the parties to the agreement.
3. Title will only be conveyed when the entire purchase price has been paid
4. The purchaser makes payments in the same way he would if the property were financed
by way of a mortgage
5. The agreement could be a conditional sales contract.

Common features of a long form/complex agreement

1. Parties

These are the parties to the agreement (in this case vendor and purchaser). Their
addresses are properly stated for the purpose of issuing a notice to either party.

2. Description of the particulars

This is a description of the subject property. The physical and legal description of the
property is given. In a complex agreement, an encumbrance also constitutes part of the
property description and is therefore included as part.

Section 59 of the Land Registration Act states that the seller has an obligation to obtain
the written consent of the chargee prior to selling any property. This is further stipulated
in the case, Innercity Properties Limited vs Housing Finance and 3 others HCCC no.
E030 of 2020 where Justice Majanja held that; the interested parties claim was that they
purchased their apartments from the plaintiff and that they have paid the purchase price
and are in possession thereof…they have not shown that they have a legal claim against
the bank, as the bank is the chargee, it must give consent to the plaintiff to sell the
property.

Generally, the standing is that any property being sold should be free of encumbrances,
and where not, it should be precisely pointed out in the agreement, Law Society of Kenya
(herein referred to as LSK) Conditions of sale, condition 4.

3. General conditions

These terms, without specific terms, apply generally to the pen contract. For example, the
LSK conditions of sale is an assembly of the general terms and conditions.
 The terms apply to fill gaps in a contract and cover a variety of matters e.g. deposit and
forfeiture or notices and completion, etc.

4. Special conditions

These are the terms which are peculiar and specific to and relevant to the contract in
question. They are conditions that apply sui generis to each agreement and thus form a
separate part of an agreement. These can include issues of vacant possession, variation of
general conditions, fixtures and fittings, etc.

Examples of this could be where the property is sold subject to a mortgage or where a
sale agreement is conditional upon the vendor receiving duly sealed letters of
administration or probate.

5. Deposits

Deposits are part and parcel of the purchase price. They act as earnests or guarantees on
the part of the purchaser to complete the transaction and entitle the purchaser to a lien
over the land once paid. LSK Conditions of Sale, condition 5.3

6. Completion

Parties to a contract must perform their contractual obligations by the due dates as set by
the contract, thus reducing unnecessary delays. This was further held in Barclays vs
messenger [1989] 3 E.R. 492, where a contract provided that if the purchaser should fail
to pay the balance of the purchase price on a given date, the agreement would become
null and void.

In Sagoo vs. Dourado [1983] KLR 365, the court of appeal however held that time will
not be considered to be of essence in a contract unless;

a) Parties expressly stipulate that conditions a to time must be strictly complied with
b) Nature of the subject matter show that time should be of the essence
c) A party subjected to unreasonable delay gives notice to the other making time of
the essence.
7. Notice to complete
 In long/complex agreements this is usually explicitly stated so as to not have a doubt that
the giver will rescind agreement if notice is not honored. This is provided for under
condition 8 of the LSK Conditions of Sale.

8. Completion time

This section includes the duties of the vendor and the purchaser and are also outlined
under the LSK Conditions of Sale, condition 4.

9. Miscellaneous provisions

These include other provisions such as the governing laws, notice requirements and rights
to terminate an agreement.

CONCLUSION

Complex agreements cover more issues with more specificity and nuance. Because of its nature,
it helps cut off potential issues down the road on a project that one might not have anticipated at
contract signing. There is no statutory requirement for the format of a sale agreement unlike
short form agreements which leave one open to implied provisions by the court. If all the
elements of a transaction will not happen simultaneously and therefore the asset will not be
transferred, and payment made for the asset at the same time then one should use this type of
agreement. There is no requirement to use a complex format when drafting an agreement. Such
use is optional and will depend on the requirements of a conveyance.