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{
    "id": 914863,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/914863/?format=api",
    "text_counter": 98,
    "type": "speech",
    "speaker_name": "Tharaka, DP",
    "speaker_title": "Hon. George Gitonga",
    "speaker": {
        "id": 13491,
        "legal_name": "George Gitonga Murugara",
        "slug": "george-gitonga-murugara"
    },
    "content": "which contract he chooses to enforce because they are all in his favour. In reality, the contract of guarantee is a secondary contract. The principal borrowing contract is the first contract while the second contract is the contract of guarantee. The amendment sought seeks to enforce the fact that we must deal with the first contract first after which we would deal with the second contract. This is very important because when I used to go to court, I would see guarantors arguing that you cannot come for their property until you have exhausted the realisation of the property of the principal debtor. To a great extent, I agreed with it, but the courts in Kenya would always say that we have to enforce the two contracts as this is what the law is. It now behoves on this House to put into statute what will be enforced by the courts without any question. This is what is being proposed in this amendment Bill which went through the Departmental Committee on Justice and Legal Affairs and was accepted as good law. We, therefore, have to enact a good law which our citizens will agree with and benefit from. As it has been stated by the Leader of the Majority Party while moving this Bill, the person who benefits from a borrowing contract is the principal borrower. This is the person who gets the money and spends it in the way he wishes, whether lavishly, in a useful manner or selfishly. However, he is the beneficiary of the borrowing. Guarantors usually come in to assist because maybe this person does not have sufficient property to cover the indebtedness. This is why extra security must be taken from a person called a guarantor. For the guarantor to suffer the consequences of what he has done, it is vitally important that the principal debtor is held liable first. Let all his assets be realised. Let him pay with every penny or go to court and have him committed to civil jail. It is only after all the remedies are exhausted that we can go to the guarantor to say that he can come in to save his friend and must bear the consequences. This is what this good law is doing. There is a good report which was prepared by the Departmental Committee on Justice and Legal Affairs. The Members can go through it and confirm that we had great deliberations to agree with this Bill. We made the law from the common law principle or the Indian position as envisaged by the Indian law of contracts. We must now come to what is Kenyan. The Kenyan position is that for the guarantor to be held liable, let the principal debtor bear all the consequences up to the end and it is only then, if there is a deficit, that the guarantor shall be called upon to meet the obligation. I am in full agreement with this proposed Bill. I urge the House to agree with it so that we can amend the Law of Contract Act Cap.23 and entrench all our thoughts into the statute for purposes of being enforced by the courts without any question."
}