A supplier–customer dispute in Kenya should be analysed from the transaction documents and the physical or service evidence, not from the invoice alone. The dispute may concern whether a contract formed, whose standard terms applied, whether goods matched description or sample, whether delivery was complete, when acceptance occurred, or whether a service milestone was achieved. Early evidence preservation matters because goods change, are consumed or repaired, while digital systems and project records are overwritten.

Reconstruct the contract formed by the transaction

Collect quotations, purchase orders, acknowledgements, catalogues, standard terms, specifications, samples, delivery schedules and amendments. Arrange them by date. If seller and buyer exchanged different standard terms, identify when each set was supplied and which communication purported to accept the order. A term printed for the first time on an invoice after delivery may have a different status from a term incorporated before contracting.

Identify the legal parties and the people who had authority to order, vary and accept. A procurement employee may have authority within a limit but not to agree an unlimited variation. Compare the documents with the course of dealing, while avoiding the assumption that past tolerance permanently changed every future contract.

Separate description, quality and fitness allegations

For goods, specify the alleged defect: wrong model, quantity, composition, dimensions, performance, packaging, expiry, sample mismatch or unsuitability for a stated purpose. Sections 13 to 15 of the Sale of Goods Act address terms concerning description, quality or fitness and sale by sample. Their application depends on the transaction and facts; quote the actual specification and explain the divergence.

For services, identify the promised deliverable, standard, milestone and acceptance process. Dissatisfaction with a commercial outcome is not necessarily defective performance. Conversely, payment of an early invoice does not automatically accept later or concealed defects. Obtain technical advice where the issue cannot be established through ordinary observation.

Document delivery and inspection

Preserve delivery notes, transport records, batch and serial numbers, packaging, photographs and the condition at arrival. A signed note may prove receipt but does not necessarily decide contractual acceptance or hidden defects. Record who signed, what they were authorised to confirm and whether quantity or condition was checked.

Inspect promptly under the contract and circumstances. If the goods are perishable, unsafe or likely to deteriorate, arrange a neutral inspection and preserve representative samples where lawful. Give the supplier a reasonable opportunity to inspect before repair, disposal or destructive testing, unless urgent safety steps make that impossible. Record why urgent action was necessary.

Give a precise defect or delay notice

Use the contractual notice method and address. Identify the order, goods or service, delivery date, defect, discovery date, evidence, affected quantity and remedy requested. Attach focused photographs or test results while preserving originals. Avoid rejecting an entire consignment where only an identified batch is affected unless the contract or facts justify it.

The supplier should acknowledge the notice, preserve manufacturing and quality records, and state whether inspection, repair, replacement or credit is proposed. A denial should address the specification and evidence. Both sides should avoid public allegations while the technical cause remains untested.

Manage use, rejection and mitigation consistently

Sections 29 to 36 of the Sale of Goods Act contain rules relevant to delivery, examination and acceptance. A buyer claiming rejection should not continue unrestricted use without advice; continued use may affect the available remedy. Where some use is necessary to protect people or property, record quantities, reason and alternatives.

Store disputed goods safely and segregate them from unaffected stock. Stop avoidable losses, source replacement goods reasonably where necessary and keep competing quotations. The supplier should propose a workable cure without insisting on a process that creates disproportionate downtime. Mitigation does not require the injured party to accept unsafe or commercially useless performance.

Reconcile price, credits and set-off

Create an order-level ledger showing price, tax, delivery, invoices, payments, credits, rejected quantities and replacement purchases. Identify the contractual basis for withholding. Do not withhold unrelated invoices merely to create leverage unless a valid set-off right applies. The supplier should not claim the gross invoice while ignoring agreed credits or returned goods.

Separate a debt claim for accepted performance from damages concerning defective performance. State whether the buyer seeks repair cost, replacement cost, price reduction, refund or consequential loss. Avoid double counting—for example, claiming both the full price refund and the complete value of replacement while retaining usable goods.

Prove causation and loss

A loss schedule should connect each amount to the breach and source record. Include replacement invoices, additional transport, inspection, repair, downtime and customer claims where legally recoverable. For lost sales, show the affected orders, capacity, revenue, saved costs and margin rather than claiming turnover as profit.

Review exclusions, liability caps, notice limits and agreed remedies. Their incorporation and wording matter. A technical report should distinguish the observed defect, likely cause, applicable standard and resulting operational effect. The expert should receive balanced material and should not decide legal liability.

Digital and service-delivery evidence

For software, hosted services or digital deliverables, preserve release versions, requirements, test cases, incident tickets, logs, uptime reports, access records and change requests. Record the environment and configuration in which a failure occurred. Do not overwrite the relevant system or allow automatic log deletion before collection.

Section 106B of the Evidence Act may be relevant to electronic records. Identify how exports were generated and who can explain the system. Screenshots can illustrate an event but may not establish the complete sequence, user action or server state.

Check arbitration and interim relief before filing

Read negotiation, mediation, governing-law, jurisdiction and arbitration clauses. Sections 4, 6, 7 and 17 of the Arbitration Act address the arbitration agreement, court proceedings, interim measures and tribunal jurisdiction. A court claim filed without dealing with an arbitration clause may be stayed. Conversely, urgent preservation may be available without deciding the merits.

Interim relief should protect identifiable goods, samples, confidential information or evidence, not merely pressure payment. State the threatened act, timing and why ordinary damages would be inadequate. Preserve any bond, warranty or insurance notification deadlines separately.

Redesign a continuing supply relationship

If the parties want to continue trading, settle the operational cause as well as the money. Revise specifications, approved samples, ordering authority, inspection windows, batch traceability, cure time, recall procedure, credit limits and escalation contacts. Define how a repeated defect or service failure affects future orders.

A settlement should identify affected orders, credits or payments, replacement dates, disposal responsibility, release scope, confidentiality and default. Do not use a broad release to extinguish unrelated latent claims unintentionally. The commercial-contract guide addresses contract construction, while the commercial-litigation guide applies if formal proceedings remain necessary.

Evidence checklist

• quotation, purchase order, acceptance and incorporated terms;
• specification, sample, drawings and approved variations;
• delivery, inspection, rejection and storage records;
• batch, serial, photograph, sample and technical evidence;
• invoices, payments, credits and set-off calculation;
• replacement, downtime and mitigation records;
• complete notices, correspondence and dispute-clause documents.

Safety, recalls and third-party claims

If goods may endanger users or property, prioritise containment and lawful notification over the payment dispute. Identify affected batches, distribution locations and customers; stop further supply where justified; preserve samples; and coordinate technical, insurance and regulatory advice. Do not conceal a safety issue while negotiating a credit. Equally, avoid announcing a broad recall before the affected product and evidence have been identified.

Record every third-party complaint, injury, property-damage allegation and remedial payment. Notify insurers within policy requirements and avoid admissions that prejudice cover. A supplier faced with a downstream claim should receive the documents and an opportunity to participate as the contract permits. Distinguish verified compensation from voluntary commercial concessions when calculating loss.

Retention of title and ownership disputes

Where unpaid goods remain identifiable, examine any retention-of-title clause, its incorporation and the factual ability to trace the goods. Do not enter premises or seize stock without authority. Determine whether the goods were resold, incorporated into another product, mixed or charged to a third party. Ownership, debt and insolvency questions may then require separate remedies.

A buyer holding rejected goods should clarify storage, insurance and collection. Give reasonable access and keep an inventory. If storage or disposal becomes necessary, provide notice and preserve evidence of condition, quantity and cost. The parties should not allow disputed goods to deteriorate merely to strengthen a damages claim.

Cross-border supply

For imported or exported goods, check governing law, jurisdiction or arbitration, Incoterms where incorporated, risk transfer, customs documentation, inspection location and currency. A Kenyan proceeding may not be the agreed or practical forum. Preserve shipping records, certificates of origin, bills of lading and communications with carriers. Time limits under transport documents or international rules may differ from the underlying contract deadline.

Official Kenyan provisions checked

• Sale of Goods Act (Cap. 31): sections 13–15, 29–36 and 51–54 on terms, delivery, examination, acceptance and buyer or seller remedies.
• Arbitration Act, 1995: sections 4, 6, 7 and 17 on arbitration agreements, stay, interim measures and tribunal jurisdiction.
• Evidence Act (Cap. 80): sections 97–100 and 106B on documentary terms and electronic records.

Need advice about a Kenyan supplier or customer dispute? Request review by an independent Kenyan advocate. This page provides general information, not legal advice; the contract, goods, evidence and current law must be checked before rejection, termination or proceedings.

Frequently asked questions

Does signing a delivery note prove the goods were acceptable?

It may prove receipt, but its effect on inspection, acceptance or hidden defects depends on the contract and Sale of Goods Act rules. Preserve the note alongside specifications, inspection records and prompt communications.

What should a buyer do after discovering defective goods?

Document condition and batch identity, stop avoidable deterioration, notify the supplier under the contract, preserve samples and obtain an appropriate technical assessment before repair, use or disposal changes the evidence.

How are loss and replacement costs proved?

Build a calculation from invoices, credits, replacement purchases, downtime records and mitigation steps. Separate direct price remedies from consequential loss and test exclusions or agreed limits against the governing contract.