Force Majeure vs Frustration In Kenyan Contract Law: Key Differences Explained
By Daphine Abasa Associate | Real Estate, Banking and Financial Services
By Faith Kabora Advocate | Real Estate, Banking and Financial Services
Introduction
In an increasingly unpredictable world, understanding the legal implications of unforeseen events on contractual obligations is essential. Kenyan contract law recognizes two doctrines that deal with such events: the doctrine of force majeure and the doctrine of frustration. While both aim to address the impact of extraordinary circumstances on contract performance, they are distinct in origin, application, and legal effect. This article explores the key differences between force majeure and frustration under Kenyan law and provides insights on how parties can protect themselves contractually.
What is the Doctrine of Frustration?
The Doctrine of Frustration is a common law principle that operates to discharge a contract where, a party or parties demonstrate that it is physically, legally, or commercially impossible to fulfill their contractual obligations. The event must alter the situation so much that the contract no longer makes sense. The Black’s Law Dictionary has also gone ahead to define frustration of contract in three ways:
- Commercial frustration – an excuse for a party’s non-performance because of some unforeseeable and uncontrolled circumstance, also termed as economic frustration;
- Self-induced frustration – a breach of contract caused by one party’s action that prevents the performance;
- Temporary frustration – an occurrence that prevents performance and legally suspends the duty to perform for the duration of the event
What is the doctrine of Force Majeure?
This is originally a civil law concept contained in the French Roman Doctrine of vis major (greater or superior force such as an act of God) that later found its way in English common law. While it was initially confined to events caused by natural forces, over time its scope has expanded to include both natural and human induced events, the Doctrine of Force Majure basically refers to supervening events for example, floods war, riots that can neither be anticipated or controlled and thus make it difficult for parties to perform their obligations under a contract if such event occurs.
Key differences between Frustration and Force Majeure
| Feature | Force Majeure | Frustration |
|---|---|---|
| Origin | Civil Law Doctrine | Common Law Doctrine |
| Effect | Suspends obligations or renegotiation | Automatic discharge or immediate termination of obligations |
| Needs to be in contract? | Yes | No |
| Threshold | It is usually broadly stated | Strictly applied |
| Examples of Events | Pandemic, war, strike, natural disasters | Death, destruction illegality |
| Notices | Notice must be given | No notice is required |
| Common Use | Commercial Contracts | General Contracts without force majeure clause |
| Burden of Proof | On party invoking the clause | On party claiming Frustration |
Case Law in Kenya
Kenyan courts have provided useful guidance on the application of these doctrines:
The Doctrine of Frustration has been incorporated into the legal system through judicial interpretation. In Kenya Airways V. Satwant Singh Flora the Court of Appeal examined whether the defendant’s employment contract had been rendered void due to his failure to renew his work permit. The court relied on the principles governing the application of the Doctrine of frustration as outlined in Halsbury’s Laws of England (3rd Edition). The court stated:
“…the doctrine of frustration operates to excuse further performance were:
- it appears from the nature of the contract and the surrounding circumstances that the parties have contracted on the basis that some fundamental thing or state of things will continue to exist, or that some particular person will continue to be available, or that some future event which forms the foundation of the contract will take place, and
- before breach performance becomes impossible or only possible in a very different way to that contemplated without default of either party, and owing to a fundamental change of circumstances beyond the control and original contemplation of the parties. The mere fact that a contract has been rendered more onerous does not of itself give rise to frustration.”
With regards to the doctrine of force majeure the Supreme Court of Kenya rendered itself in the case of Kwanza Estates Limited V. Jomo Kenyatta University of Agriculture and Technology and stated:
“A notable aspect of the force majeure doctrine is that while English Common law and American jurisprudence recognize similar principles, courts will enforce the force majeure doctrine only when it is explicitly stated in contracts. Put another way, if a provision is not made contractually by way of a force majeure clause, a party will only be able to rely on the very stringent provisions of the common law doctrine of frustration. Under English law, contractual performance will be excused due to unexpected circumstances only if they fall within the relatively narrow doctrine of frustration. This doctrine will apply by default unless the parties agree on something different in their contract.
A summation of the above distinction leads us to the conclusion that an act of God refers specifically to the natural events that occur and can neither be prevented nor controlled by people. Force majeure applies to contracts to excuse further performance due to both natural disasters and human-caused events such as wars or strikes that prevent a contract from being fulfilled. It must be written into the contract, specifying what kinds of events would apply. Frustration is a common law doctrine which is implied into contracts to allow the discharging parties from further performance due to unforeseen event which makes it impossible to carry out the contract’s main purpose, essentially altering the situation so much that the contract no longer makes sense. “ [Emphasis ours]
Conclusion
While both force majeure and frustration address unforeseen events affecting contract performance, they operate under different legal frameworks in Kenya. Force majeure is a contractual tool that must be explicitly included, while frustration is a common law and statutory remedy. Understanding these doctrines enables individuals and businesses to navigate contractual uncertainties more effectively.