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ACTS SUPPLEMENT No. 5 28th May, 2010. ACTS SUPPLEMENT to The Uganda Gazette No. 32 Volume CIII dated 28th May 2010. Printed by UPPC, Entebbe, by Order of the Government. Act 7 Contracts Act 2010 THE CONTRRACTS ACT, 2010 ARRANGEMENT OF SECTIONS. Section. Part I—Preliminary.
Part II—Communication, Acceptance And Revocation of an Offer.
Part III—Contracts, Void And Voidable Agreements. Contracts.
Void and voidable agreements.
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Section. 22. 23. 24. 25.
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28. 29. 30. 31. 32. |
33. 34. 35. 36. 37. |
38. 39. 40. 41. |
42. |
43. 44. |
Contracts Act 2010 |
Agreement in restraint of legal proceedings. Agreement void for uncertainty. Agreement by way of wager. Agreement to do impossible act. Reciprocal promise to do legal and illegal acts. Alternative promise, one part being illegal. Part IV—Contingent Contracts. Contract contingent on event happening. Contract contingent on event not happening. Contract contingent on conduct of a person. Contract contingent on happening of specified event within a specified time. Agreement contingent on an impossible event. Part V—Performance of Contracts. Contracts which have to be performed. Obligation of parties. Refusal to accept offer of performance. Refusal of party to perform promise. Person to perform promise. Effect of accepting performance from third person. Joint liability and rights. Joint liability. obligation and liability of joint promisors. Release of a joint promisor. Joint rights. Time and place for performance. Time for performance. Performance of reciprocal promises. Reciprocal obligation to perform. order of performance of reciprocal promises. |
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Section.
Appropriation of payments.
Contracts which need not be performed.
Part VI—Relations Similar to Those Created by Contract.
Part VII—Consequences of Breach of Contract.
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Act 7 Contracts Act 2010 |
Section. Part VIII—Indemnity And Guarantee.
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Part IX—Bailment. |
88. |
Interpretation for Part IX. |
89. |
Modes of bailment. |
90. |
Delivery to bailee. |
91. |
Duty to disclose fault in bailed goods. |
92. |
Duty of care by a bailee. |
93. |
Liability of bailee for loss. |
94. |
Termination of bailment due to act of bailee |
95. |
Unauthorised use of bailed goods. |
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Section.
Part X—Agency.
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Contracts Act 2010 |
Section. |
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129. |
Duty of agent in naming another agent. |
130. |
Ratification of acts done by person who is not an agent. |
131. |
Ratification may be express or implied. |
132. |
Knowledge requisite for valid ratification. |
133. |
Effect of ratifying unauthorised act. |
134. |
Ratification of unauthorised act does not injure third person. |
135. |
Termination of agency. |
136. |
Termination of agency where agent has interest in subject matter. |
137. |
Revocation of authority of agent by principal. |
138. |
Revocation where authority is partly exercised. |
139. |
Compensation for revocation by principal or renunciation by agent. |
140. |
Notice of revocation or renunciation. |
141. |
Revocation and renunciation may be express or implied. |
142. |
Termination of authority of agent. |
143. |
Termination of agency by death or insanity of principal. |
144. |
Termination of authority of sub-agent. |
145. |
Duty of an agent in conducting business of principal. |
146. |
Skill and diligence required from agent. |
147. |
Accounts of an agent. |
148. |
Duty of an agent to communicate with principal. |
149. |
Right of principal to repudiate when agent deals without consent of principal. |
150. |
Right of principal to benefit gained by agent dealing on own account in business of agency. |
151. |
Right of agent to retain sums received on account of principal. |
152. |
Duty of agent to pay sums received for principal. |
153. |
Remuneration of agent. |
154. |
Agent not entitled to remuneration for misconduct. |
155. |
Lien of an agent on property of principal. |
156. |
Indemnity of agent. |
157. |
Non liability of principal to agent in a criminal act. |
158. |
Compensation to agent for injury caused by principal. |
159. |
Enforcement and consequences of contract of agent. |
160. |
Liability of principal where agent exceeds authority. |
161 |
Consequences of notice to agent. |
162. |
Agent not to enforce or be bound by contracts on behalf of principal. |
163. |
Right of parties to a contract made by agent not disclosed. |
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Act 7 Contracts Act 2010 Section.
SCHEDULE currency POINT |
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THE CONTRACTS ACT, 2010. An Act to codify the law relating to contracts and to provide for other related matters. Date of Assent: 22nd April, 2010. Date of Commencement: See section 1. Be it enacted by Parliament as follows— Part I—Preliminary
This Act shall come into force on a date appointed by the Minister, by statutory instrument.
In this Act, unless the context otherwise requires— “acceptance” means an assent to an offer made by a person to whom the offer is made; “agreement” means a promise or a set of promises forming the consideration for each other; “coercion” means the commission or threatening to commit any act forbidden under any law or the unlawful detaining or threatening to detain any property, to the prejudice of any person with the intention of causing any person to enter into an agreement; |
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“consent” means agreement of two or more persons obtained freely, upon the same thing in the same sense; “consideration” means a right, interest, profit or benefit accruing to one party or forbearance, detriment, loss or responsibility given, suffered or undertaken by the other party; “consideration for a promise” means where, at the desire of a promisor, a promisee or any other person does or abstains from doing or promises to do or to abstain from doing something; “contingent contract” means a contract to do something or not to do something where an event, collateral to a contract, does or does not happen; “contract” means an agreement enforceable by law as defined in section 10; “currency point” has the value assigned to it in the Schedule to this Act; “documents of title to goods” includes any bill of lading, dock warrant, warehouse keeper’s certificate, warrant or order for the delivery of goods and any other document used in the ordinary course of business as proof of possession or control of goods or which authorises or purports to authorise, either by endorsement or by delivery, the possessor of the document to transfer or receive goods represented by the document; “mercantile agent” means a person who in the ordinary course of his or her business, has authority either to sell goods, or to consign goods for the purposes of sale, or to buy goods or raise money on the security of goods; “Minister” means the Minister responsible for justice; “misrepresentation” means— 9 |
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warranted by the information of the person who makes it or an assertion which is not true, though the person who makes it believes it to be true;
gains an advantage to the person who commits it or anyone who claims under that person by misleading another person to his or her prejudice or to the prejudice of any one claiming under that other person; or
make a mistake as to the substance of the thing which is subject of the agreement; “offer” means the willingness to do or to abstain from doing anything signified by a person to another, with a view to obtaining the assent of that other person to the act or abstinence; “promise” means an offer that is accepted; “promisee’ means the person who accepts an offer; “promisor” means the person who makes an offer; “reciprocal promises” mean promises that form the consideration or part of the consideration for each other; “void agreement” means an agreement that is not enforceable by law; “voidable contract” means an agreement which is enforceable by law at the option of a party to a contract but not at the option of the other party and a contract which ceases to be enforceable by law and which becomes void when it ceases to be enforceable. |
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Part II—Communication, Acceptance And Revocation of an Offer
transmission to him or her so as to be out of the power of the acceptor; or
the offeror.
of transmission to the person to whom it is made, so as to be out of the power of the person who makes it; or
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An offer is revoked by—
the other party;
where time is not prescribed, by the lapse of a reasonable time without communication of the acceptance;
acceptance; or
death or insanity comes to the knowledge of the acceptor before acceptance.
is—
offer prescribes the manner in which it is to be accepted.
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The performance of the conditions of an offer or the acceptance of any consideration for a reciprocal promise which may be offered with an offer, is an acceptance of the offer.
Part III—Contracts, Void And Voidable Agreements Contracts
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she is subject.
Consent of parties to a contract is taken to be free where it is not caused by—
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permanently affected by reason of age, illness, mental or bodily distress.
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who does not believe it to be true;
belief of the fact;
person; or
Void and voidable agreements
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Where a contract is entered into by a mistake in respect of any law in force in Uganda, the contract is void.
provisions of any law; |
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another person; or
illegality of the consideration or object of the agreement at the time the plaintiff paid the money or delivered the thing sought to be recovered or did the thing in respect of which compensation is sought;
had not been effected at the time the plaintiff became aware of the illegality and repudiated the agreement;
agreement was induced by fraud, misrepresentation, coercion or undue influence; or
object of protecting a particular class of persons of which the plaintiff is one.
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of Documents Act and is made on account of natural love and affection between parties standing in a near relation to each other;
has already voluntarily done something for the promisor or something which the promisor was legally compellable to do; or
responsible for it or by the agent of that person, to pay wholly or in part a debt for which a creditor may have enforced payment but is restricted by the Limitation Act.
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dispute which may arise between them in respect of any subject shall be referred to arbitration and that only the amount awarded in the arbitration shall be recoverable in respect of the dispute referred to arbitration; or
agree to refer to arbitration any question which has already arisen between them; and
An agreement, the meaning of which is not certain or capable of being made certain, is void.
void.
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Where a person makes a reciprocal promise, firstly to do a certain thing which is legal, and, secondly, under specified circumstances, to do a certain thing which is illegal, the promise to do the legal thing shall be a contract but the promise to do an illegal thing shall be a void agreement.
Where an alternative promise, one part of which is legal and the other part illegal, is made, only the legal part may be enforced. Part IV—Contingent Contracts.
A contract to do something or not to do a particular thing where an uncertain future event on which the contract is contingent, happens, shall not be enforced except where and until that event happens, and where the event becomes impossible, the contract shall become void.
A contract to do something or not to do a particular thing where an uncertain future event on which the contract is contingent does not happen, may be enforced after the happening of that event becomes impossible, but not before. |
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Where a future event on which a contract is contingent is the way in which a person is to act at an unspecified time, the event shall be considered to have become unattainable where that person does anything which renders it impossible for him or her to act within a definite time or under further contingencies.
happened; or
impossible.
and the event has not happened; or
the event will not happen.
An agreement to do something or not to do a particular thing, which is contingent on the happening of an impossible event, is void, whether the impossibility of the event is known to the parties to the agreement or not, at the time the agreement is made. |
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Act 7 Contracts Act 2010 Part V—Performance of Contracts Contracts which have to be performed
circumstances that the person to whom it is made has a reasonable opportunity of ascertaining that the person by whom it is made is able and willing to do what he or she is bound to do by the promise; and
promisee, the promisee shall have a reasonable opportunity to see that what is offered is what the promisor is bound by the promise to deliver.
Where a party to a contract refuses or disables himself or herself from performing a promise in its entirety, the promisee may put an end to the contract unless he or she signifies by words or conduct, to its continuance. |
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Where it appears from the nature of a case that it was the intention of the parties to a contract that a promise contained in it is to be performed by the promisor—
employ a competent person to perform the promise.
When a promisee accepts performance from a third person, the promisee shall not afterwards enforce performance against a promisor. Joint liability and rights
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Where two or more persons make a joint promise, a release of one of the joint promisors by the promisee shall not—
Time and place for performance
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Performance of reciprocal promises
Where a contract consists of reciprocal promises to be performed simultaneously, a promisor need not perform his or her promise unless the promisee is ready and willing to perform his or her reciprocal promise.
Where the order in which reciprocal promises are to be performed is expressly fixed by the contract, the promises shall be performed in that order, and where the order is not expressly fixed by the contract, the promises shall be performed in the order in which the nature of the transaction requires. |
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take effect.
Where a contract consists of reciprocal promises and one of them cannot be performed, or where the performance of a promise cannot be claimed until the other promise is performed and the promisor of the other promise fails to perform it, the promisor shall not claim the performance of the reciprocal promise and shall pay compensation to the other party to the contract for any loss which the other party may sustain by the non-performance of the contract.
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Appropriation of payments
Where a debtor, who owes several distinct debts to one person makes a payment to that person, with express indication or under circumstances that imply that the payment is to be applied to the discharge of a particular debt, the payment, if accepted, shall be applied accordingly.
Where a debtor omits to indicate the debt to which a payment is to be applied and there are no circumstances to indicate the debt to which the payment is to be applied, the creditor may apply the payment, at his or her discretion, to any lawful debt actually due to him or her and payable by the debtor, whether its recovery is barred by the Limitation Act, or not.
Contracts which need not be performed
Where the parties to a contract agree to substitute for the original contract a new contract or to rescind or alter the original contract, the original contract need not be performed. |
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A promisee may—
performance of a promise made by the promisor;
she thinks fit.
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The rescission of a voidable contract may be communicated in the manner that applies to the communication of a revocation of an offer and subject to this Act.
Where a promisee neglects or refuses to afford a promisor reasonable facilities for the performance of his or her promise, the promisor shall be exempted by the neglect or refusal of the promisee to perform the promise. Part VI—Relations Similar to Those Created by Contract
Where a person incapable of entering into a contract or anyone whom that person is legally bound to support, is supplied by another person with necessaries suited to the condition in life of that person or of anyone that that person is legally bound to support, the person who furnishes the supplies is entitled to reimbursement from the property of the person who is incapable of entering into a contract.
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A person who finds goods that belong to another and takes them into his or her custody shall be subject to the same responsibilities as a bailee, as provided in Part IX.
A person to whom money is paid by mistake or to whom anything is delivered by mistake shall repay or return the money or thing delivered. Part VII—Consequences of Breach of Contract
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of the same nature; or
in which the public is interested, under any law or under the orders of the central government or of any local government.
A party who rightfully rescinds a contract is entitled to compensation for any damage which that person sustains through the non fulfilment of the contract.
made, to perform the contract;
would not have resulted if there was no specific performance;
infringed by the specific performance;
against whom the claim is made, out of proportion to the benefit likely to be gained by the claimant; |
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entitled, although in breach, to terminate the contract; or
obligations under the contract; but in cases where the breach is not fundamental, specific performance is available to him or her subject to his or her paying compensation for the breach.
benefit on that person.
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discharge by the party who benefited for the purpose of the performance of the contract, including any sums paid or payable by that party to any other party under the contract and retained or recoverable by that party under subsection (3); and
giving rise to the frustration of the contract. |
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Where any right, duty, or liability would rise under agreement or contract, it may be varied by the express agreement or by the course of dealing between the parties or by usage or custom if the usage or custom would bind both parties to the contract. Part VIII—Indemnity And Guarantee.
In this Part, unless the context otherwise requires— “creditor” means a person to whom a guarantee is given; “continuing guarantee” means a guarantee which extends to a series of transactions; “contract of guarantee” means a contract to perform a promise or to discharge the liability of a third party in case of default of that third party, which may be oral or written; |
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“contract of indemnity” means a contract by which one party promises to save the other party from loss caused to that other party by the conduct of the person making the promise or by the conduct of any other person; “guarantor” means a person who gives a guarantee; “indemnity” means an undertaking by which a person agrees to reimburse another upon the occurrence of an anticipated loss; “principal debtor” means a person in respect of whose default a guarantee is given.
A promisee in a contract of indemnity, acting within the scope of his or her authority is entitled to recover from a promisor—
any suit in respect of any matter to which the promise to indemnify applies;
any suit, if in bringing or defending the suit, the promisee did not contravene the orders of the promisor and acted as it would have been prudent to act in the absence of any contract of indemnity or if the promisor authorised him or her to bring or defend the suit; and
of any compromise of any suit, where the compromise is not contrary to the orders of the promisor and is one which it is prudent for the promisor to make in the absence of any contract of indemnity or where the promisor authorised the promisee to compromise the suit.
Anything done or any promise made, for the benefit of a principal debtor, may be sufficient consideration to a guarantor to give a guarantee. |
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Where two persons contract with another person to undertake a certain liability and also contract with each other that each of them shall be liable on the default of the other to that other person, the liability of the two persons to that other person under the first contract shall not be affected by the existence of the second contract, even where that other person is not aware of the existence of the second contract.
Any variance made in the terms of a contract between a principal debtor and a creditor without the consent of a guarantor discharges the guarantor from any transaction which is subsequent to the variance.
A guarantor is discharged by any contract between a creditor and a principal debtor, where the principal debtor is released or where an act or omission of the creditor, discharges the principal debtor. |
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A contract between a creditor and a principal debtor where the creditor makes a compromise with the principal debtor or promises to give time to or not to sue the principal debtor, discharges the guarantor unless the guarantor assents to the contract.
Where a contract to give time to a principal debtor is made by a creditor with a third person and not with the principal debtor, the guarantor is not discharged.
Mere forbearance on the part of a creditor to sue a principal debtor or to enforce any other remedy against the principal debtor, does not, in the absence of any provision in the guarantee to the contrary, discharge the guarantor.
Where there are co-guarantors, a release by a creditor of one of the guarantors does not discharge the other guarantor and does not free the guarantor who is released from his or her responsibility to the other guarantor.
A guarantor is discharged where the eventual remedy of the guarantor against a principal debtor is impaired, because a creditor—
guarantor; or
requires him or her to do. 38 |
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Where a guaranteed debt becomes due or where default of a principal debtor to perform a guaranteed duty takes place, the guarantor is upon payment or performance of all that the guarantor is liable for, invested with all the rights which the creditor had against the principal debtor.
A guarantee which is obtained by a misrepresentation made by a creditor or with the knowledge and assent of a creditor, concerning a material part of the transaction, is void.
Where a person gives a guarantee upon a contract that a creditor shall not act upon the contract until another person joins as co-guarantor, the guarantee is not valid where that other person does not join.
In the absence of any contract to the contrary, co-guarantors for the same debt or duty, jointly or severally, under the same or different contracts and with or without the knowledge of the existence of each other, are liable, between themselves, to pay an equal share of the whole debt or of that part of the debt which remains unpaid by a principal debtor. |
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Co-guarantors who are bound in different sums are liable to pay equally as far as the limits of their respective obligations permit. Part IX—Bailment.
In this Part, unless the context otherwise requires— “bailee” means a person to whom goods are delivered; “bailment” means the delivery of goods by one person to another for some purpose, upon a contract that the goods shall when the purpose is accomplished, be returned or disposed of according to the direction of the person who delivered them; “bailor” means a person who delivers the goods; “pledge” means the bailment of goods as security for payment of a debt or performance of a promise; “pledgee” means a person with whom a pledge is deposited; “pledgor” means a person who gives a pledge to another.
Where a person in possession of goods under another contract holds the goods as bailee, that person becomes a bailee under the existing contract and the owner becomes the bailor of goods although the goods may not have been delivered by way of bailment.
The delivery of goods to a bailee may be made by doing anything which has the effect of putting the goods in the possession of the intended bailee or of any person authorised to hold the goods on behalf of the bailee. |
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A bailee shall take as much care of the goods bailed to him or her as a person of ordinary prudence would under similar circumstances take of his or her own goods of the same bulk, quantity and value, as the bailed goods.
In the absence of any special contract, a bailee is not responsible for the loss, destruction or deterioration of the bailed goods, where the bailee takes the amount of care required under section 92.
A contract of bailment is voidable at the option of the bailor, where the bailee does any act with regard to the bailed goods, which is inconsistent with the conditions of the bailment.
Where a bailee makes use of the bailed goods contrary to the conditions of the bailment, the bailee is liable to compensate the bailor for any damage to the goods arising from or during that use. 41 |
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Where under the conditions of a bailment, the goods are to be kept or carried or where work is to be done upon the goods by a bailee for a bailor and the bailee is to receive no remuneration, the bailor shall repay to the bailee the necessary expenses incurred by him or her for the purpose of the bailment.
A bailee shall return or deliver without demand from a bailor, according to the directions of the bailor, the bailed goods, as soon as the time or the purpose for which the goods were bailed expires.
Where by the fault of a bailee, the goods are not returned, delivered or tendered at the proper time, the bailee is responsible to the bailor for any loss, destruction or deterioration of the goods, from that time. |
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A gratuitous bailment terminates in any of the following circumstances—
In the absence of any contract to the contrary, a bailee shall deliver to a bailor or according to the directions of a bailor, any increase or profit which may have accrued from the bailed goods.
A bailor is responsible to a bailee for any loss which the bailee may sustain, where the bailor was not entitled to make the bailment or to receive back the goods or to give directions, in respect of the goods.
In the absence of an agreement to the contrary, where several joint owners of goods bail the goods, a bailee may deliver the goods back to one joint owner or according to the directions of that joint owner, without the consent of the other owners.
Where a bailor has no title to the goods and a bailee, in good faith, delivers the goods back to the bailor or according to the directions of the bailor, the bailee is not responsible to the owner, for the delivery.
Where a person, other than a bailor, claims bailed goods, that person may apply to the court to stop delivery of the goods to the bailor and to decide the title to the goods. |
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Where goods which are commonly the subject of sale are found but the owner cannot with reasonable diligence be found or where the owner refuses upon demand, to pay the lawful charges of the finder of the goods, the finder may sell the goods, where—
part of their value; or
amount to two-thirds of the value of the goods.
Where a bailee, in accordance with the purpose of the bailment, renders any service involving the exercise of labour or skill in respect of the bailed goods, the bailee may, in the absence of a contract to the contrary, retain the goods until he or she receives the remuneration due, for the services rendered in respect of the goods.
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A pledgee may retain any goods that are pledged for the payment of—
possession or preservation of the pledged goods.
A pledgee is not entitled to receive from a pledgor extraordinary expenses incurred by the pledgee for the preservation of any pledged goods.
retain the pledged goods as a collateral security; or
notice of the sale. |
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Where a person pledges goods in which he or she has a limited interest, the pledge is valid to the extent of that interest.
Part X—Agency
In this Part, unless the context otherwise requires— “agent” means a person employed by a principal to do any act for that principal or to represent the principal in dealing with a third person; “principal” means a person who employs an agent to do any act for him or her or to represent him or her in dealing with a third person; “sub-agent” means a person employed by and acting under the control of an agent in the business of the agency.
A person may employ an agent, where that person—
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A person may act as an agent where that person—
which he or she is subject.
Consideration is not necessary to create an agency.
In an emergency, an agent has authority to do any act for the purpose of protecting a principal from loss, as would be done by a person of ordinary prudence, under similar circumstances. |
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Where an agent without authority to do so, appoints a person to act as a sub-agent and stands towards that person in a relation of a principal to an agent and is responsible for the actions of that person to both the principal and a third person, the principal is not represented by or responsible for the acts of the person employed as sub-agent and that person is not responsible to the principal.
Where an agent, holding an express or implied authority to name another person to act for the principal in the business of the agency, names a person to act for the principal, that person is not a sub-agent of the principal but an agent, for the part of the business of the agency that is entrusted to him or her. |
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In selecting another agent for a principal, an agent shall exercise the same amount of discretion as a person of ordinary prudence would exercise in a similar case; and where the agent does so, he or she is not responsible to the principal for the acts or negligence of the agent who is selected.
Ratification may be express or implied by the conduct of the person on whose behalf an act is done.
A valid ratification of an act may only be made by a person whose knowledge of the facts of the case is not defective.
Where a person ratifies an unauthorized act done on behalf of that person, the whole of the transaction of which the act forms a part is accordingly ratified.
An act done by one person on behalf of another without the authority of that other person, which if done with authority would have the effect of subjecting a third person to damages or of terminating any right to interest of a third person, shall not by ratification, be made to have such effect. |
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An agency is terminated where—
Where the agent has an interest in the property which forms the subject matter of an agency, the agency shall not, in the absence of an express contract, be terminated to the prejudice of that interest.
Subject to section 136, a principal may revoke the authority given to an agent at any time before the authority is exercised to bind the principal.
A principal shall not revoke the authority given to an agent after the authority is partly exercised, with respect to acts and obligations that arise from acts already done under the agency.
Where an agency is revoked or renounced, without reasonable cause, contrary to an express or implied contract that the agency is to continue for a given period of time, the principal or the agent, as the case may be, shall compensate the other party, for the revocation or renunciation of the agency. |
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A party who revokes or renounces an agency shall give reasonable notice to the other party to the agency and make good any damage suffered.
Revocation or renunciation may be express or implied by the conduct of a principal or an agent, respectively.
The termination of the authority of an agent does not take effect before it becomes known to the agent or with regard to a third party, before it becomes known to the third party.
An agent shall take all reasonable steps to protect and preserve the interests entrusted to him or her, where—
Subject to section 147, the termination of the authority of an agent causes the termination of the authority of a sub-agent appointed by the agent.
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52 |
Act 7 |
Contracts Act |
2010 |
An agent shall render proper accounts to a principal on demand.
An agent shall, in case of difficulty, use all reasonable diligence to communicate with a principal and to seek to obtain the instructions of the principal.
Where an agent deals on his or her own account in the business of the agency, without obtaining the consent of a principal and without acquainting the principal with all material circumstances which come to the knowledge of the agent on the subject, the principal may repudiate the transaction where the case shows that any material fact was dishonestly concealed from the principal by the agent or that the dealings of the agent is unfavourable to the principal.
Where an agent deals in the business of the agency without the knowledge and consent of a principal, the principal may claim from the agent any benefit which may have accrued to the agent from the transaction. |
53 |
Act 7 |
Contracts Act |
2010 |
An agent shall pay to a principal, all sums received on the account of the principal, subject to deductions referred to under section 151(1).
In the absence of any special contract, payment for the performance of any act is not to be made to an agent until the completion of that act.
An agent who is guilty of misconduct in the business of the agency is not entitled to any remuneration in respect of that part of the business.
In the absence of any contract to the contrary, an agent is entitled to retain the goods of a principal, whether movable or immovable, received by the agent, until the amount due to the agent for commission, disbursements and services in respect of the goods is paid or accounted for by the principal.
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54 |
Act 7 |
Contracts Act |
2010 |
Where a principal employs an agent to do an act which is criminal, the principal is not liable, either upon an express or implied promise, to indemnify the agent against the consequences of that act.
A principal shall compensate an agent for any injury that may be caused to the agent by the neglect or lack of skill of the principal.
A contract entered into through an agent and obligations arising from acts done by the agent under the contract shall be enforced in the same manner and have the same legal consequences as if the contract was entered into or done by a principal.
Any notice given to or information obtained by an agent in the course of the business transacted by the agent for the principal, shall, as between the principal and a third party, have the same legal consequences as if it had been given or obtained by the principal.
In the absence of any contract to the contrary, an agent shall not enforce a contract entered into by him or her on behalf of a principal and shall not be bound by the contract, except where— |
55 |
Act 7 |
Contracts Act |
2010 |
goods for a merchant resident abroad;
cannot be sued.
or
Where a person makes a contract with another, without knowledge or reasonable ground to believe, that the other is an agent, the principal, if he or she requires the performance of the contract, may only obtain the performance of the contract subject to the right and obligations subsisting between the agent and the other party of the contract.
Where an agent is personally liable, a person dealing with the agent may hold the agent or principal or both of them liable. |
56 |
Act 7 |
Contracts Act |
2010 |
A person who enters into a contract with an agent and induces the agent to act upon the belief that only the principal shall be held liable or who induces the principal to act upon the belief that only the agent shall be held liable, shall not hold that agent or principal, as the case may be, liable afterwards.
A person who fraudulently represents himself or herself as an authorised agent of another person and induces a third person to deal with him or her as the agent, is liable to compensate the third person in respect of any loss or damage incurred, where the alleged principal does not ratify the acts.
A person who holds out as an agent shall not be entitled to require the performance of a contract, where that person was not acting as an agent but on his or her own account.
Where an agent, without authority, does an act or incurs an obligation to a third person on behalf of a principal, the principal is bound by the act or obligation, where the principal by word or conduct induced the third person to believe that the act or obligation is within the scope of the authority of the agent.
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57 |
Act 7 |
Contracts Act |
2010 |
The Minister may, by statutory instrument, with the approval of the Cabinet amend the Schedule to this Act.
The Contract Act is repealed. |
58 |
Act 7 Contracts Act 2010 |
SCHEDULE Section 2 CURRENCY POINT A currency point is equivalent to twenty thousand shillings. |
Cross References
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59 |