KENYA SCHOOL OF LAW – 2008

PART IV-A

SALE AGREEMENTS

An agreement to sell land is basically a contract. Consequently compliance with the basic tenets of the
Law of Contract is necessary and so is compliance with the provisions of the Law of Contract Act (Cap
23) Laws of Kenya. A good and enforceable agreement will thus not only exhibit offer,
acceptance,capacity, consideration and certainty (see: Michira –vs- Gesima Power Mills Limited , 2004, 2
E.A. 168) in the terms but must also be in tandem with the provisions of Section 3(3) of Cap 23. In the
latter case the sale agreement must be in writing, signed by both parties and their signatures attested to.
The terms of the agreement need not however be in one document. Terms may however be incorporated
by reference (eg. the Law Society Conditions of Sale being made to apply). Sections 54 and 55 of the ITPA
also has certain implied terms which in the absence of contrary agreements apply to open contracts. The
Sectional Properties Act however dictates particular matters which must be in the Sale Agreement where
a sectional unit is being sold. The agreement must of course also not be tainted with any illegality as the
maxim ex turpi causa non oritur action will be invoked.

In general an ordinary Sale Agreement will contain five parts namely: the parties, particulars of sale,
special conditions, general conditions and execution.

Parties: This is self-explanatory. The parties to the contract as well as their addresses must be properly
stated in the contract. The address is crucial in the event that there will be need to issue a notice to either
party.

Particulars: This entails a description of the subject property. Both the physical and legal description of
the property are given in the particulars of sale. Encumbrances, if any, also constitute part of the
property definition. Occasionally, fixtures and fittings will form part of the particulars of sale. Finally
the consideration (purchase price) will be part of the particulars.

Special Conditions: These are those terms which are peculiar or specific to and relevant to the contract
in question. They will involve issues of vacant possession, deposit, fixtures and fittings, remedies in the
event of default, contract being subjected to a mortgage facility, variation of general conditions, etc etc.

General Conditions: These are terms which in the absence of any specific terms apply generally to the
open contract. They came from implied terms which have been complied together from common law,
equity as well as conveyancing practice generally. Section 55 of the ITPA contains examples of such
general terms. Likewise the LSK Conditions of Sale now in its third edition is an assembly of the general
terms and conditions. The general conditions apply also to fill up gaps in a contract and cover a variety
of matters eg. regulating right to rescind, preparation and content of transfer, possession and grant,
deposit and forfeiture, notices and completion. The Sale Agreement will always be drawn by Vendor’s
Advocate (see Salim –vs- Okongo, 1976 KLR 42, LSK Condition 24).

Note: Fixtures and fittings – Case Law- Melluish –vs- BMI (No. 3) Ltd 1996 AC 456
- Ellitestone –vs- Morris 1997 1 WLR 687
- Leigh –vs- Taylor 1902 AC 157

The answer to the question whether a structure or an item has become a part and parcel of the
land itself depends on the degree of annexation as well as the object of annexation and the test is
objective.

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 Deposits - LSK Condition 3
- Stakeholders & Agents as Holders
- Universal Corporation –vs- Five Ways Properties
1997 1 All ER 254 (on return)
- Workers Trust –vs- Dojap Investments 1993 2 All ER 370
(forfeiture)

Deposits are not only part of the purchase price but are also earnests or guarantees on the part of
the Purchaser to complete the transaction. They entitle the Purchaser to a lien over the land once
paid.

Completion - LSK Conditions 2 & 4

- Barclay –vs- Messenger 1989 3 All ER 492
(time of the essence)

Notice to complete - Efficacy & Validity: must be explicit and leave no

doubt that giver will rescind agreement if notice is not
honoured. Giver must be ready able and willing to
complete.
- LSK Condition 28

Completion time - Duty of Vendor: to deliver

(i) Vacant possession and
(ii) Completion documents.
What is vacant possession? Property must be:
- Free from physical impediment
- Free from any form of occupation

- Duty of Purchaser: to inspect completion documents,

authorize release of deposit and deliver balance of
purchase price.

Hand outs - Steps commonly taken by Buyer’s Advocate

- Steps commonly taken by Vendor’s Advocate
- Checklists – acting for Vendor
- acting to Purchaser
- Model Sale Agreement Clauses (class discussion)
- J. M. Kibuchi on LSK Conditions of Sale.

JLO, May 2008

louis @ swiftkenya.com

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