Frequently Asked Questions
Is a guarantee enforceable in Kenya?
Yes. Under the Contracts Act (Cap. 23) and the Statute of Frauds principles adopted in Kenya, a guarantee must be in writing and signed by the guarantor to be enforceable. An oral guarantee is not binding in Kenya for most purposes.
What is the difference between a guarantee and an indemnity?
A guarantee is a secondary obligation — the guarantor is only liable if the principal debtor defaults. An indemnity is a primary obligation — the indemnifier is liable regardless of whether the debtor defaults. An indemnity is stronger for the creditor and harder to escape for the indemnifier.
Is a guarantee valid in common law countries?
Yes. Guarantees must be in writing under the Statute of Frauds across most common law jurisdictions. The key distinction between a guarantee and an indemnity is the same in the UK, Australia, Kenya, and other common law countries.
What is the difference between a guarantee and an indemnity in Kenya?
A guarantee is secondary — the guarantor is only called on if the principal debtor defaults, and the guarantor's liability cannot exceed the debtor's liability. An indemnity is primary — the indemnifier is liable independently of the debtor and can be pursued even if the underlying obligation is unenforceable. Indemnities are stronger for creditors.
Does a guarantee need to be witnessed in Kenya?
The Statute of Frauds principle adopted in Kenya requires a guarantee to be in writing and signed by the guarantor. Witnessing is not a strict legal requirement but is strongly recommended — a witnessed signature is harder to dispute, and some institutions (banks, courts) may require it.
Can a guarantor limit their exposure in Kenya?
Yes. A guarantee can be limited in amount (a 'capped guarantee'), in duration (e.g. valid for 12 months), or to specific obligations. An unlimited, open-ended guarantee for all present and future liabilities of the debtor is the most onerous form and should be signed with independent legal advice.
Is a guarantee letter valid in the UK?
Yes. Guarantees must be in writing under the Statute of Frauds 1677 (still in force in England and Wales). The same guarantee/indemnity distinction applies in UK law. For guarantees over consumer credit or residential mortgage debt, additional consumer protection requirements may apply.