Impact of COVID-19 on Contractual Relations: How to Mitigate Damages, Renegotiate Contracts and Avoid Disputes (Part I)

These include cessation of movement into and out of four counties, namely Nairobi, Mombasa, Kilifi and Kwale, a nationwide curfew between 7 p.m. to 5 a.m. and travel restrictions with a general embargo on international passenger flights.

Both the pandemic and restrictions imposed by the Government have triggered a large-scale disruption of the Kenyan economy, leading to a slowdown in many sectors, particularly in the tourism, hospitality, trade and transport industries. Given the local and global effects of the pandemic, businesses are grappling with their inability to meet their obligations under existing contracts.

In a series of articles, we analyse the sudden and unexpected impact of COVID-19 on existing contractual agreements and what companies should be doing to mitigate the impact, with a primary focus on the position under Kenyan law. Various legal reliefs or defences to non-performance or delay in the performance of contractual obligations could assist in an economic downturn. In this series, we consider three of these defences: the doctrine of force majeure, the doctrine of frustration of contract and the principle of material adverse change.

Part 1 of the series addresses force majeure.

Should you have any questions on the impact of COVID-19 on your contractual agreements, please do not hesitate to contact Dominic Rebelo or Luisa Cetina. 

The content of this alert is intended to be of general use only and should not be relied upon without seeking specific legal advice on any matter.