LABOR LAW ESSAY ASSIGNMENT

FIRM 7

PROSECUTORS

Lucy Njau - 135143

Esther Nyabuto - 136082

Adelaide Njango - 134383

Cynthia Nyabundi- 136524

Raymond Mugi-134548

Fatma Jidale-135757.

Yvonne Kuria-134349.
 ‘‘Based on your knowledge from the course in Law of Contracts, discuss the meaning of
contractual form.’’

INTRODUCTION

Contracts of guarantee (where one party guarantees the obligation of another), for example, where
a spouse guarantees the bond release of their significant other, are required by the Statute of Frauds
1677 to be "evidenced in writing". Evidenced in writing suggests that every term or element of the
transaction agreement must be found in the contractual document or documents. Other contracts
with such requirement include: Contracts for the sale or transfer of an interest in land and contracts
that cannot be satisfied within one year of its creation (in other words, a long-term contract like a
mortgage).

PART I

Contractual form refers to the way contracts can be expressed. Generally, this can be done in two
ways: Formally or informally under contract law. Most contracts, however, fall in the latter
category. This means they are made orally, and in rare but likely cases, they are only made in
situations where neither oral nor written communication is required or made as they are only by
deed. As a result, the law regards an informal exchange of promises as legally binding and valid
as if it were a written contract.1 Nevertheless, the elements and formalities such as offer,
acceptance and consideration still require to be present.2 There are, however, statutory exceptions
to this rule that contracts need not be formal as will be discussed in the next section.

PART II

The following contracts, according to statute, cannot be informal:

I) CONTRACTS WHICH MUST BE EVIDENCED IN WRITING

Contracts of guarantee (where one party guarantees the obligation of another), for example, where
a spouse guarantees the bond release of their significant other, are required by the Statute of Frauds
1677 to be "evidenced in writing".3 Evidenced in writing suggests that every term or element of
the transaction agreement must be found in the contractual document or documents. Other

1
Elliot C and Quinn, Contract Law, 7th ed, Pearson Education Limited, London, 2009, 83.
2
Elliot C and Quinn, Contract Law, 7th ed, Pearson Education Limited, London, 2009, 83.
3 Section 4, Statute of frauds 1677.
contracts with such requirement include: Contracts for the sale or transfer of an interest in land
and contracts that cannot be satisfied within one year of its creation (in other words, a long-term
contract like a mortgage).

II) CONTRACTS WHICH MUST BE MADE BY DEED

Contracts made by deed require parties to put the contract into a formal document and the contract
should be signed in the presence of a witness.4 The purpose of the deed is to ensure that the
necessity of consideration in contracts can be overlooked when it comes to enforcing the promise
made by one of the parties. This is possible because deeds do not require consideration when they
are formed,5 hence it is not an essential part of the contracts that are made by deeds.

Consideration in this case can be viewed as a promise made by a party with the view of the
receiving party carrying out an owed promise in return.6 The purpose of ‘overlooking’
consideration is to ensure that the parties to the contract are legally bound by their duties and they
can be legally enforceable. If this is not done, most parties would take advantage of the other and
claim that there was no consideration, but the promise made was a gratuitous one that has no legal
binding nature.7

Apart from legally binding parties, the other benefit of these contracts is that they allow a longer
limitation period compared to normal contracts. Most contracts have a limitation period of six
years, but deeds have a limitation period of twelve years hence they are preferred when dealing
with leases, mortgages, etc.8 This allows parties to carry on with their contractual duties for a
longer period of time especially when a matter in the contract requires such a long period. Due to
this, parties have been able to lease spaces for periods longer than six years enabling them to reduce
the renewal rate.

4 Elliot C and Quinn, Contract Law, 7th ed, Pearson Education Limited, London, 2009, 83.
5 Lister C, ‘The difference between a deed and a 'simple contract'’ Gateley, 2017, 26 July 2022, -
<https://gateleyplc.com/insight/quick-reads/the-difference-between-a-deed-and-a-simple-contract/>- 26 July 2022.
6 Lister C, ‘The difference between a deed and a 'simple contract'’ Gateley, 2017, 26 July 2022, -

<https://gateleyplc.com/insight/quick-reads/the-difference-between-a-deed-and-a-simple-contract/>- 26 July 2022.

7 Elliot C and Quinn, Contract Law, 7th ed, Pearson Education Limited, London, 2009, 83.
8 Lister C, ‘The difference between a deed and a 'simple contract'’ Gateley, 2017, 26 July 2022, -

<https://gateleyplc.com/insight/quick-reads/the-difference-between-a-deed-and-a-simple-contract/>- 26 July 2022.

III) CONTRACTS WHICH MUST BE WRITING

There are certain contracts required by legislation to be in writing for them to be enforceable.
Examples of such contracts include those involving the transfer of shares in a limited company;
bills of exchange, cheques and promissory notes; and regulated consumer credit agreements, such
as hire purchase contracts. 9

Under the law of property, several statutes require the contract to be in writing for them to be
enforceable. The Law of Property Act(1925) set the requirement for contracts involving transfer
of land to be in writing, after which several other statutes relating to property incorporated the
provision.10 The Land Act of Kenya(2012) provides that for a contract for the sale or disposition
of an interest in land to be enforceable it must be made in writing.11 In addition, the Sectional
Property Act of Kenya has the same provision; that for the contract to be enforceable it must be in
writing.12 The courts have also been vigilant in interpreting these contracts and emphasize on
compliance of the terms of the statute as witnessed in the decided case of Ruddick v Ormston.13

CONCLUSION
In conclusion, this essay has shown the two forms contracts can take: Formal or
Informal. Nevertheless, the general rule that most contracts can be informal has three
exceptions: Contracts which must be in writing, contracts which must be evidenced in
writing, and contracts which must be made by deed.

9 Elliot C and Quinn, Contract Law, 7th ed, Pearson Education Limited, London, 2009, 83.
10 Section 53, Property Act (1925).
11 Section 12, Land Act of Kenya (2012).
12 Section 23, Sectional Property Act (2020).
13 Ruddick v Ormston (2005).