Importance of Seeking Legal Advice Before Signing Contracts

Contracts form the backbone of countless transactions, from property deals to employment agreements and family law arrangements. While signing a contract may seem like a straightforward step to seal a deal, doing so without proper legal advice can expose individuals and businesses to significant risks. Contracts are legally binding documents, and their terms can have far-reaching consequences if not thoroughly reviewed. Seeking legal advice before signing ensures that parties understand their obligations, rights, and potential liabilities. This article explores the critical importance of obtaining legal advice before signing contracts in Kenya, highlighting the risks of bypassing this step with practical examples from conveyancing, employment, and family law.

Contracts are designed to formalize agreements, but they are often written in complex legal language that can obscure critical details. Without a trained eye, individuals may overlook unfavorable clauses, ambiguous terms, or provisions that could lead to disputes. A qualified lawyer can:

• Clarify Terms and Obligations: Lawyers break down complex legal jargon to ensure parties fully understand what they are agreeing to.

• Identify Hidden Risks: Legal professionals can spot clauses that may disadvantage their client, such as unfair penalties or one-sided termination rights.

• Ensure Compliance with Kenyan Law: Contracts must align with Kenyan statutes, such as the Law of Contract Act (Cap 23) or the Land Act (2012). A lawyer ensures the contract is legally enforceable.

• Protect Against Future Disputes: By addressing ambiguities or gaps in the contract, legal advice reduces the likelihood of costly litigation.

Failing to seek legal advice can lead to financial losses, legal battles, or unintended obligations, as illustrated in the following examples from conveyancing, employment, and family law.

Risks in Conveyancing: Property Transactions Gone Wrong

Conveyancing, the process of transferring property ownership, is one of the most common areas where contracts are signed in Kenya. Property transactions often involve substantial financial investments, making the stakes particularly high. Signing a sale agreement or lease without legal review can lead to disastrous consequences.

Example: Ambiguous Sale Agreement

Consider a case where an individual, excited about purchasing a plot of land in Nairobi, signs a sale agreement without consulting a lawyer. The agreement includes a clause stating that the buyer must pay an additional "development fee" at the seller’s discretion. Without legal advice, the buyer may not realize that this clause is vague and potentially exploitative. After paying the purchase price, the seller demands an exorbitant development fee, claiming it was part of the agreement. The buyer, now financially strained, faces a choice between paying the fee or engaging in costly litigation to challenge the clause.

A lawyer would have flagged the ambiguous clause during review and either negotiated its removal or clarified the fee’s scope, saving the buyer from unforeseen costs. Additionally, legal advice would ensure due diligence, such as verifying the title deed’s authenticity under the Land Registration Act (2012), to confirm the seller’s legal right to sell the property. In Kenya, land fraud is rampant, and failing to verify ownership can result in purchasing non-existent or encumbered property.

Example: Lease Agreement Pitfalls

In another scenario, a small business owner signs a commercial lease in Mombasa without legal review. The lease includes a clause allowing the landlord to terminate the agreement with one month’s notice if the property is sold. Months later, the landlord sells the property, and the new owner terminates the lease, forcing the business to relocate unexpectedly. The disruption leads to lost revenue and relocation costs.

A lawyer could have negotiated a longer notice period or a clause protecting the tenant’s rights in case of a sale, aligning with protections under the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act (Cap 301). This example underscores how legal advice can safeguard businesses from sudden disruptions.

Risks in Employment Law: Unfair Terms and Disputes

Employment contracts in Kenya are governed by the Employment Act (2007), which sets out rights and obligations for employers and employees. However, poorly drafted or unreviewed contracts can lead to disputes, financial penalties, or unfair treatment.

Example: Unfair Termination Clauses

Imagine an employee who signs a contract with a clause stating that the employer can terminate their employment "at will" without notice or reason. Unaware that this clause contravenes the Employment Act, which mandates notice periods and valid reasons for termination, the employee later faces abrupt dismissal without compensation. The employee must then pursue a costly legal battle to enforce their rights.

Had the employee sought legal advice, a lawyer could have identified the illegal clause and negotiated terms compliant with Kenyan law, such as a mandatory 28-day notice period or severance pay provisions. Legal advice also ensures that contracts include clear terms on salary, benefits, and dispute resolution, reducing the risk of exploitation.

Example: Non-Compete Clauses

In another case, a tech professional signs a contract with a non-compete clause prohibiting them from working in the same industry for two years after leaving the company. Without legal review, the employee may not realize that such clauses must be reasonable in scope and duration under Kenyan law. After resigning, the employee is barred from securing similar employment, leading to financial hardship.

A lawyer would have advised that overly restrictive non-compete clauses may be unenforceable under Kenyan law if they unduly limit an individual’s right to earn a living. By negotiating a narrower clause: such as limiting the restriction to a specific geographic area or a shorter time frame, the employee’s career mobility could have been protected.

Risks in Family Law: Prenuptial and Settlement Agreements

Family law contracts, such as prenuptial agreements or divorce settlements, carry significant emotional and financial weight. In Kenya, these agreements must comply with statutes like the Matrimonial Property Act (2013) and the Marriage Act (2014). Signing without legal advice can lead to unfair outcomes or unenforceable agreements.

Example: Unfair Prenuptial Agreement

A couple enters a prenuptial agreement before marriage, with one partner signing without legal counsel. The agreement stipulates that all property acquired during the marriage belongs solely to the wealthier spouse. Years later, during a divorce, the other spouse discovers that the agreement leaves them with no claim to marital property, despite contributing to its acquisition.

Under the Matrimonial Property Act, Kenyan courts recognize contributions (monetary or non-monetary) to marital property. A lawyer would have ensured the prenuptial agreement reflected fair terms, such as acknowledging both parties’ contributions, preventing an unjust outcome. Legal advice also ensures the agreement is properly executed, as Kenyan law requires such contracts to be signed voluntarily and with full disclosure.

Example: Divorce Settlement Ambiguities

In a divorce settlement, a spouse signs an agreement without legal review, believing it guarantees monthly maintenance payments. However, the contract lacks a clear duration for the payments, and the paying spouse stops after a few months, claiming the obligation has ended. The ambiguity leads to a prolonged legal dispute.

A lawyer would have ensured the agreement specified the payment duration and included enforcement mechanisms, such as penalties for non-compliance. This highlights the importance of legal advice in crafting clear, enforceable family law contracts.

Broader Consequences of Skipping Legal Advice

Beyond specific examples, signing contracts without legal review can lead to systemic issues:

• Financial Losses: Ambiguous or unfair terms can result in unexpected costs, such as penalties, fees, or lost investments.

• Legal Disputes: Unclear contracts often lead to litigation, which is time-consuming and expensive in Kenya’s judicial system.

• Reputational Damage: For businesses, poorly drafted contracts can harm relationships with clients, employees, or partners.

• Loss of Rights: Individuals may unknowingly waive legal protections, such as employment rights or property entitlements.

How to Seek Legal Advice in Kenya

To mitigate these risks, individuals and businesses should:

1. Engage a Qualified Advocate: Work with a lawyer registered with the Law Society of Kenya (LSK) who specializes in the relevant field (e.g., conveyancing, employment, or family law).

2. Conduct Due Diligence: For property deals, lawyers can verify documents through the Ministry of Lands or the Ardhi Sasa platform.

3. Review All Clauses: Ensure the lawyer explains every clause, including potential risks and implications.

4. Negotiate Terms: Lawyers can advocate for fairer terms before signing, such as removing exploitative clauses or adding protective provisions.

5. Document Everything: Keep records of all communications and drafts to avoid disputes over what was agreed.

Conclusion

The importance of seeking legal advice before signing contracts cannot be overstated. Whether in conveyancing, employment, or family law, contracts are fraught with potential pitfalls that can lead to financial loss, legal disputes, or unfair outcomes. The examples discussed: ambiguous sale agreements, unfair employment terms, and problematic family law contracts, demonstrate that the cost of legal advice is a small price to pay compared to the consequences of signing blindly. In a world where contracts govern so much of our personal and professional lives, legal advice is not just a precaution - it’s a necessity.

Contact us today on +254 716 808 104 or info@lawguide.co.ke to protect your interests, ensure compliance with Kenyan law, and avoid costly mistakes.