Post-nuptial Agreements In Kenya

The intention of most people getting into a marriage is that only death will do them part. Unfortunately, we live in a broken world and divorce for various reasons occurs bringing to an end these well-intentioned marriages despite the parties’ best efforts. The law has evolved to allow parties who intend to contract a marriage have peace of mind that their assets will be protected in the event of the dissolution of their marriage. Parties have done this by contracting pre-nuptial agreements before contracting their marriage. Such agreements set out how properties, investments, finances and even liabilities will be divided should the parties choose to separate and covers everything from income, pensions, inheritances, gifts received during the wedding ceremony even vehicles. What happens for parties who do not have pre-nuptial agreements and are already in a marriage relationship? This is where the post-nuptial agreements come in.

Definition of a post-nuptial agreement

The Black’s Law Dictionary Free Online Legal Dictionary 2^nd Edition defines a Post Nuptial Agreement as thus; “An agreement formed between a married couple, generally to provide specification regarding the division of assets in case the couple get separated or divorced.” Post-nuptial agreements are a generally new concept in Kenya.

Why should I enter into a post-nuptial agreement?

Everyone has a reason for why they would want a post-nuptial agreement. It may be that the couple would want to organize their finances. Entering into a post-nuptial agreement does not mean that the couple have decided to get divorced. A post-nuptial agreement may be beneficial where;

1. The parties did not enter into a pre-nuptial agreement before getting married.
2. The parties have had a separation followed by reconciliation.
3. A separating couple may make an agreement on financial matters of they do not yet wish to divorce. This will also be known as a separation agreement.
4. One of the parties has substantially greater assets or income than the other.
5. One or both of the parties wishes to protect assets they owned prior to the marriage e.g. an inheritance.
6. It would be beneficial for the parties to define what is “matrimonial property” or “non-matrimonial property” e.g. where one of the parties has registered business assets in their name.
7. One or both of the parties have children from a previous marriage or relationship and wish to protect assets for purposes of succession planning.
8. One or both of the parties have property in a different jurisdiction

Are post-nuptial agreements recognized by Kenyan law?

Section 6 of the Matrimonial Property Act, 2013 provides that parties to an intended marriage may enter into an agreement before their marriage to determine their matrimonial property rights. Such agreements can only be set aside by a court where it is determined that the agreement was influenced by fraud, or coercion or is manifestly unjust. Although the laws of Kenya do not expressly recognize post-nuptial agreements, the courts have held that this does not mean that such agreements are not enforceable. Being contractual in nature, the general law of contract applies and they are enforceable just like any other contract.  The court in Civil Suit No. 2 of 2021 (O.S) DNK vs. KM upheld the parties Post-Nuptial Agreement by finding the same to be valid as it had been entered into without fraud, coercion, duress even economic duress and further the parties had both sought legal counsel before signing the agreement. The court emphasized as follows; 1. The courts will not interfere with the agreement merely because the terms of the agreement are favourable to one party and not to the other. Reliance was placed on the holding in National Bank of Kenya Limited vs. Pipe Plastic Samkolit (K) Ltd & Another (2011) eKLR, where the courts stated as follows; “…it is clear beyond para adventure that save for those special cases where equity might be prepared to release a party from a bad bargain, it is ordinarily no part of equity’s function to allow a party to escape from a bad bargain…” The Court of Appeal in Pius Kimaiyo Langat vs. Co-operative Bank of Kenya Ltd (2017) eKLR, stated as follows; “…we are alive to the hallowed legal maxim that it is not the business of courts to rewrite contracts between parties. They are bound by the terms of their contracts unless coercion, fraud or undue influence are pleaded and proved.”   2. To vitiate/set aside/ render null such an agreement, the party asking the court to vitiate/ set aside/ render null such agreement should prove that the agreement was entered into only by coercion, duress, fraud, it is not their deed or distress including economic distress. In the case of Joel Phenehas Nyaga & Joseph Nyaga Nzau (Suing as the Chairperson and Treasurer of Kemagui Electrification Self Help Group) vs. Aloysius Nyaga Kanyua & Julia Gicuku Nyaga (2020) eKLR, the court held as follows; “…when a document containing contractual terms is signed, then, in the absence of fraud, or misrepresentation, the party signing it is bound, and it is wholly immaterial whether he has read the document or not. A person who signs a lawful contractual document may not dispute his or her agreement to the terms which it contains, unless he or she can establish one of five defences; fraud, misrepresentation, duress, undue influence or non-est factum (It is not my deed) …” In the case of Attorney General of Belize et al vs. Belize Telecom Ltd & Another (2009), 1WLR 1980, the court held as follows; “…the court does not make a contract for the parties. The court will not even improve the contract which the parties have made for themselves. If the express terms are perfectly clear and free from ambiguity, there is no choice to be made between different meanings. The clear terms must be applied even if the court thinks some other terms could not have been more suitable…”   3. Can a party to such an agreement plead that they were under “economic duress” when signing and ask the court to vacate such an agreement? In the persuasive case of Pao on Vs. Lau Yiu (1978) 3 All ER 65 the Privy Council stated as follows; “Duress, whatever form it takes, is a coercion of the will so as to vitiate consent. Their Lordships agree…. that in a contractual situation commercial pressure is not enough. There must be present some fact on which could in law be regarded as a coercion of his will, so as to vitiate his consent. In determining whether there was a coercion of will such that there be no true consent, it is material to inquire whether the person alleged to have been coerced did or did not protest; whether at the time he was allegedly coerced into making the contract, he did or did not have an alternative course open to him such as an adequate legal remedy, whether he was independently advised; and whether after entering the contract he took steps to avoid it…”  Further, in the case of Kenya Commercial Bank Limited & Another vs. Samuel Kamau Macharia & 2 Others (2008) eKLR, the court stated as follows as to what amounts to economic duress; “…that the commercial pressure alleged to constitute such duress must, however, be such that the victim; -

•  Must have entered the contract against his will.
•  Must have had no alternative course open to him.
•  Must have been confronted with coercive acts by the party exerting the pressure.

 A keen study of decisions on economic duress shows that American judges pay great attention to such evidential matters as the fact or absence of protest, the benefit received and the speed with which the victim has sought to avoid the contract…”

Best practice when preparing a post-nuptial agreement

1. Both parties need to have sought independent legal advice before signing the agreement.
2. Full financial disclosure by both parties- this boils down to a question that may arise of whether both parties had sufficient information to make an informed decision on whether to enter into the agreement and the implications.
3. Ensuring that the terms of the agreement are substantially fair.
4. No undue influence, coercion, duress and economic duress when negotiating and entering into the contract.
5. No fraud or misrepresentation by a party in relation to the agreement.
6. Ensuring that the elements that would make a contract valid are present including having a sound mind and the intention to be bound.
7. Adherers to the law and public policy in terms of the contents e.g. the court is likely to set aside an agreement that forbids one party from seeking court intervention for the maintenance of a child.
8. Ensure such agreement adheres to the laws of any jurisdictions the parties would want that agreement to be enforceable.

Conclusion

The nature of post-nuptial agreements and the why behind it seems to spark a lot of debate and being a family matter where there is a lot more to consider including the intention for such contract, the circumstances at the time of signing such agreements and the exact provisions, it is clear that having a competent family law advocate guide parties through this process is of paramount importance. Having competent representations covers the parties to avoid pitfalls that could see their conciliatory efforts go to waste for missing a crucial consideration which then renders the agreement voidable (capable of being nullified.)

How can we help?

The Wealth & Private Clients team at CM Advocates LLP prides itself in having a wide variety of resources, skills and experience on matters of family law including but not limited to Pre & Post Nuptial Agreements, Children matters, Adoptions and Guardianships, Succession & Probate Matters, and Divorce/ Separation/ Annulment and Matrimonial Property Matters spanning across the East African Region and other International Regions. We are practical and innovative in our approach and offer quick turnaround timelines. We offer an edge to our clients based on our legacy of having handled various delicate family matters over the years and therefore are well capable of guiding you through any matter dealing with Family disputes. Find our full profiles below.

Written by:

Head of Unit: