Mage v Wanjiru (Commercial Case E1436 of 2025) [2026] SCC 85 (KLR) (22 June 2026) (Judgment)

Mage v Wanjiru (Commercial Case E1436 of 2025) [2026] SCC 85 (KLR) (22 June 2026) (Judgment) Neutral citation: [2026] SCC 85 (KLR) Republic of Kenya In the Small Claims Court at Mombasa Commercial Case E1436 of 2025 TN Mwangeka, RM June 22, 2026 Between Eiid Mage Claimant and Caroline wanjiru Respondent Judgment 1.The Claimant seeks judgement in the sum of Kshs 555,000/- being the balance of the Buyout agreement dated 26th December 2024. The parties subsequently expressed intention to vary the agreement in terms of mode of payment through an agreement dated 2nd July 2025 however the latter agreement was only signed by the Claimant. 2.The Respondent in their defence, denied the claim, raising issues of business losses, interference and frustration of contract. However, at the hearing, the Respondent admitted that their existed the agreement with the Claimant, admitted to non payment of the full buyout amount of Kshs. 1,600,000/- in installments as agreed and conceded that the outstanding balance was indeed Kshs. 555,000/=. 3.Upon consideration of the documents filed and the witness testimonies of the parites herein, this court finds that the agreement between the parties dated 26th December 2024 to be the operating agreement. The same has not been disputed as to it legality and thus this court is bound to give effect to its terms. 4.The Respondent, under the said contract was bound to buyout the Claimant in three installments as follows; The first installment of Kenya Shillings Five Hundred Forty Five Thousand Only (545,000/=) and is hereby acknowledged at the time of executing this agreement. b) The second installment of Kenya Shillings Five Hundred Thousand Only (500,000/=) was payable on or before 30 April, 2025. c) The third and last installment of Kenya Shillings Five Hundred Fifty Five Thousand Only (555,000/-) was payable on or before 30th August, 2025. 5.By the Respondent’s own admission during the hearing, the outstanding sum is Kshs. 555,000/-. The lack of payment was attributed to loss of income which rendered it difficult for the Respondent to continue making the payments. 6.In Kenya Airways V. Satwant Singh Flora the Court of Appeal relied on the principles governing the application of the Doctrine of frustration as outlined in Halsbury’s Laws of England (3rd Edition). The court stated:“…the doctrine of frustration operates to excuse further performance were:i.it appears from the nature of the contract and the surrounding circumstances that the parties have contracted on the basis that some fundamental thing or state of things will continue to exist, or that some particular person will continue to be available, or that some future event which forms the foundation of the contract will take place, andii.before breach, performance becomes impossible or only possible in a very different way to that contemplated without default of either party, and owing to a fundamental change of circumstances beyond the control and original contemplation of the parties. The mere fact that a contract has been rendered more onerous does not of itself give rise to frustration.” 7.A rightly submitted by the Claimant, the Respondent’s alleged loss of employment does not render the contract impossible to perform, it merely makes it inconvenient for her. Financial hardship does not constitute frustration. 8.Consequently, from the totality of the evidence, the Claimant has proved its case on a balance of probabilities as against the Respondent. Judgment is entered for the Claimant against the Respondent for Kshs. 555,000/- together with interest from date of breach (30th August 2025). Cost of the suit at court rates from date of filing. DATED SIGNED AND READ VIRTUALLY AT MOMBASA THE……22ND ….DAY OF……JUNE………2026HON. THERESA N. MWANGEKARESIDENT MAGISTRATE/ADJUDICATORIn the presence of;…Mr. Kamazi…for Claimant;…Mr. Nyariki…… for RespondentC/A Esther