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What are the grounds for termination of a contract in Kenya?
What are the grounds for termination of a contract in Kenya?
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Maurice
said:
Contract termination involves ending an active contract before it is entirely performed per terms and conditions. Below are conditions under which a may be terminated:
i. If the contract or its performance becomes illegal due to changes in laws or regulations, the contract may be terminated on the grounds of illegality
ii. If one party to the contract becomes insolvent or files for bankruptcy, this can be grounds for the other party to terminate the contract.
iii. Frustration of Purpose: If an unforeseen event occurs that makes it impossible to achieve the purpose of the contract, the contract may be terminated on the grounds of frustration of purpose.
iv. Both parties can agree to terminate the contract if they mutually decide that it's in their best interest to do so.
v. A contract may be terminated in the event of unforeseen and uncontrollable circumstances that make it impossible or impractical to fulfill the contract. For example, war or natural calamities.
vi. If one party fails to fulfill their obligations or breaches the terms and conditions of the contract. This referred to as a breach of contract.
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Winfred
said:
A contract is said to be discharged or terminated when the obligation created by it ceases to bind the parties who are now freed from performance. A contract may be discharged in the following ways;
I. Express Agreement:
It occurs if the parties thereto expressly agree to discharge the contract. Their mutual promises constitute consideration to support the termination. Express agreement may be bilateral or unilateral.
II. Discharge by performance
A contract is discharged by performance if both parties perform their mutual obligations as agreed.
III. Discharge by impossibility or doctrine of frustration
A contract is said to be frustrated if performance on the obligation is rendered impossible, illegal or commercially useless by unforeseen or extraneous circumstances for which neither party is to blame. Circumstances in which a contract may be frustrated are; Non-occurrence of an event, Destruction of subject matter, Illegality, Death or permanent Incapacitation.
IV. Discharge by breach of contract-Breach of contract does not terminate a contract but gives the innocent party an opportunity to treat the contract as repudiated or as existing.
V. Discharge by Operation of law.
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