Exchange is a contract by which the parties give

to each other one thing for another (art. 410-

415 of the Draft Law)
 From the definition, two elements emerge:
 - any given right may be exchanged:

movable, immovable, real right such as right

to passage, usufruct but not with money;
 - Money exchange with a thing or a service is

not exchange but rather a sale or another

nominate contract
A sale with an optional clause for the buyer
to pay another thing in case he fails to get
money, is not considered as an exchange
contract
 Exchange is a consensual contract Warranty

against eviction and warranty against latent

defects apply
 Provisions governing sale apply to exchange

mutatis mutandis
 Payment with soulte
 In case someone delivers a thing to another

in return for the delivery of another thing

together with a sum of money, the contract
is still exchange if the sum is less the thing
delivered
 If the sum of money is greater, the contract

will be the sale

 If both are equal, the will of the parties will

prevail
 Rwandan law recognizes two types of lease
i.e. lease of things (movable or immovable)
and lease of works or industry
 Section 1: Nature of the lease of things

contract
(Art. 416 of the draft law)
 The lease of things is a contract by which one

of the parties binds himself or herself to have

the other enjoy a thing during a certain time,
and for a certain price which the latter binds
himself or herself to pay him or her.
 The right conferred to the lessee is the use of
the thing
 If more right, such as alienation, is granted,

then the contract is not lease

 Essential conditions for lease
 Besides the common conditions, the contract

of lease requires the following conditions:

 - The undertaking of the lessor to give the
lessee the use and enjoyment of the thing;
 - An agreement between the lessor and the

lessee that the use and enjoyment by the

latter is only temporary
 - An undertaking by the lessee to pay a sum

of money in return of the lease

 Things which can be let
 Any thing, movable or immovable can be let
(art. 417 of the Draft Law)
 However, the code has only provided for the
lease of immovable properties
 Thus, one may argue that these provisions
will apply to lease of movables mutatis
mutandis
 It’s also worth noting that only things in
trade may be let
- Consumable things cannot be subject to lease
But a sum of money may be let for the
purpose of impression (ad pompam vel
ostentationem)
- Lease of a res aliena is not void since there is
no transfer of ownership
 Characteristics
 - Consensual contract (No form is required see
articles 419 & 420 of the Draft law);
 - Bilateral i.e. Exceptio non adimplenti contractus
is possible;
 - Successive in most cases, thus, in case of
breach the situation cannot be restored ex tunc
but rather ex nunc
 - Temporary contract,
 - Onerous contract
 - Non intuitu personae (sub-lease & 398 not
terminated because of death )
 The term of a lease under ordinary lease or
residential lease is fixed or indefinite.

 Contracts for commercial leases are entered

into for five (5) years parties can however,
agree for shorter or longer term.
 A lease of a furnished apartment is deemed

made by the year; by the month; by the day.

 If nothing is provided, lease is deemed made

according to the usage of the place.
 If a contract for lease of things is to take
place in future, subject to some condition
later to be fulfilled in the contract, it is called
a promise of lease of things.
 A promise of lease of things becomes a lease

when time elapses or the conditions to which

delivery of the leased thing was subject to are
fulfilled and the thing is delivered to the
lessee or occupied by him or her.

 When a person is using the movable property
of another person, he or she is presumed to
have borrowed it by virtue of a loan for use.
 When a person is using the immovable

property of another person, he or she is

presumed to have occupancy by virtue of a
lease.
Section 2: Duties and rights of the lessor
- Deliver the thing let
_to repair major defects unless this is impossible or
requires expenses which may not reasonably be
required from the lessor in the given circumstances
- Allow a peaceful enjoyment by the lessee - Warranty
against latent defects
- to compensate the lessee for the loss he or she has
suffered from the defects of the thing leased which
prevent its use, even if the lessor did not know of
them at the time of the lease.
 - to maintain the thing in order so that it
can serve the use for which it has been
leased(The lessor may not, during the term of
the lease, change the form of the leased
thing)
 But in case of urgent and necessary repairs,
the lessee can be deprived of that right.
 - Right to enter the premises for inspection
 - Right to make necessary repairs
 - Right to obtain rent
 Rent may be increased on the basis of the
stipulation in the contract for lease or if the
lessor has renovated the leased property,
which added value to it.

Quid when it is dictated by other

circumstances?
 The sub-lessee is bound towards the lessor
only to the extent that the sublessee is
himself or herself indebted to his or her
sublessor at the time of seizure of his or her
things, and the sublessee may not set up
payments made in advance.
 Payments made by the sub-lessee either

under a stipulation that is included in their

lease and has been made known to the
lessor, or in accordance with the usage of the
place, are not considered to be advance
payments.
 Section 3: Duties and rights of the
lessee(Rights)
 A lessee may assign, sublease or pledge his

or her right in the premises only if the lessee

has the written consent of the lessor obtained
in accordance with the law.
 It may be prohibited for all or part of it.
 A lessor is liable to the lessee for injuries caused by
defects in leased premises during the term of the
lease when:
 the lessor has entire or partial control of the
premises;
 the or she is required by law or undertakes to keep
or assist in keeping the premises in repair; or
 his or her negligence or participation is the
immediate cause of the injury.
 If, during the lease, the leased thing needs urgent
repairs which cannot be deferred until its end, the
lessee must bear them, whatever inconvenience they
cause him or her, and although he or she is deprived of
a part of the thing leased while they are being made.
 If repairs of the leased thing last more than twenty-one
(21) days, the price of the lease is reduced in proportion
to the time and to the part of the thing leased of which
the lessee has been deprived.
 If the repairs of the leased thing are of such a nature
that they render uninhabitable what is required for the
lodging of the lessee and his or her family, he or she
may have the lease terminated.
 Warranty against eviction
 In a contract for lease of things, the lessor
warranties the lessee of peaceful enjoyment of the
leased thing unless otherwise stipulated in the
contract.
 A lessee who has been disturbed in his or her
enjoyment of the leased thing in consequence of an
action relating to the ownership of the leased
property, is entitled to a proportionate reduction of
the rent of the lease or lease of farm, provided that a
notice of the disturbance and of the impediment
have been served upon the lessor.
 When implied warranty against eviction or warranty
against latent defects would arise under a contract
for lease of things, the warranty may be removed by
a special agreement.
 Even though warranty against eviction is removed or
changed through an agreement, the lessor remains
liable to warranty against his or her personal act.
 Even though warranty against latent defects is
removed or changed through an agreement, the
lessor remains liable for damages in a the case
where he or she knew of the defects at the time of
conclusion of the contract.
 The lessor does not guarantee the lessee
against disturbance which third parties cause
to his or her enjoyment, without claiming in
other respects any right to the thing leased.
 However, the lessee may sue them in his or

her own name

 If the lessor sells the leased thing, the buyer cannot evict the farmer or
the lessee who has an authentic lease or a lease bearing a date certain,
unless it is provided for in lease contract.
 When it was agreed at the time of the lease that in case of sale, the
buyer would be allowed to evict the lessee and no stipulation was
made as to damages, the lessor is bound to indemnify the farmer or
lessee in the following manner: damages equal to the price of the rent
during the time which, according to the usage of the place, is allowed
between the notice to quit and the departure, if the leased thing is a
house, an apartment or a shop;
 damages equivalent to one-third (1/3) of the price of the lease for the
whole time which remains to run, if the leased thing is a rural property.
 However, the indemnities are determined by experts in case of
industrial establishments or other establishments which require large
advances
 A buyer under a clause of redemption cannot
exercise the power of expelling the lessee until, by
the expiry of the time fixed for the redemption, he
or she becomes the irrevocable owner.
 ,A buyer of the leased thing who wishes to make
use the faculty reserved by the lease to evict a
farmer or a lessee in case of sale must:
 1° provide the lessee with a notice in accordance
with the usage of the place;
 2° notify the farmer at least one (1) year in advance.
 Section 3: Duties and rights of the lessee
 Main obligations (Art):
 - Proper use of the hired thing;
 - Pay the rent
 But there are also other rights and duties,

see below
 - Duty to restore the thing hired in the same
condition
 - Duty to furnish the house with enough

furniture
 - Liability in case of deterioration and fire
 - Right to sublet if no agreement to the

contrary ( changed in the draft law).

 A lessee must not make any innovation or
addition to the premises without the written
consent of the lessor except where hey can
be removed at the end of the lease without
significant expenses.
 Lessor’s remedies in case of breach by the
lessee
 - Default notice
 - Forced performance
 - Repudiation
 Without prejudice to damages
 In case the lessor has not fulfilled his or her
obligation to do major repairs, the lessee
himself or herself may carry out such repairs
and recover from the lessor any costs
incurred by deducting them from the rent.
There may be no derogation therefrom to
what is provided for in the contract of lease
 The lessee may claim a pro rata reduction of
the rent when the enjoyment of the leased
property is diminished as a result of a defect.
 Such reduction takes effects from the date on

which the lessee notifies the lessor of the

defect or the date on which the defect was
sufficiently known by the lessor until the
defect is repaired.
 If there are several lessees, they are jointly
and severally liable for the fire unless:
 they prove that the fire has originated in the

dwelling of one of them, who will be the only

one to be held responsible; or
 some of them prove that the fire did not start

with them, and they are not held responsible.

 Section 4: Termination of lease
 - Expiry of the term (art. 393, paragraph 1)
 - By notice (art. 393, paragraph 2)
 Factors which do not affect the lease:
 - Extinction of the lessor’s right e.g. sale (art.

399)
 - Death of the lessor or the lessee (art. 398)
 - The lessor resolves to occupy the house
 A lessor can not cancel lease, even if he/she

intends to live in the house leased, unless it

was stipulated in the contract.
 Tacit renewal
 Notice at the expiry of the contract
 Hire-purhase –
 Hire-purchase contract is a credit sale of

movable or immovable properties in terms of

which the purchase price is to be paid in
installments, while the transfer of ownership
to the buyer is subject to a suspensive
condition, with the result that he or she
would only become owner of the property
bought once the price has been fully paid.
  
 Such contracts may, and usually do, contain a
lex commissoria and a penaly clause. In
terms of the lex commissoria the seller is
entitled to cancel the contract if the buyer
fails to pay the installments on due date,
while the penalty clause entitles the seller to
retain all monies already paid by the buyer
and to claim any installments in arrears when
he or she (the seller) cancels the contract
 Franchise is a term used to describe the licensing
of a business system by a franchisor to a
franchisee. This type of licensing is commonly
referred to as “business format franchising”.
 Franchise is a contract by which a trader
grants to another trader the right to benefit
and use his or her commercial achievement,
through communicating and transferring his
or her know-how and his or her distinctive
signs, in exchange of payment of a royalty
fee. A franchise contract is made in writing.
 Obligation of fair dealing and confidentiality
 Duty to provide information
 A franchisor has obligation to provide the franchisee
with:
 1° commercial know-how
 patented technology
 trade name, trademarks, trade dress, copyright, trade
secrets, business concept, methodologies and, if
relevant, designs and patents;
 appropriate training before and throughout the duration
of the contract;
 permanent technical assistance allowing him or her to
operate.
 make the payment of the fees fixed by the
franchise contract,
 not to operate the franchise outside of a

defined geographic area and not to transfer

his or her place of operation;
 not to disclose the know-how of the

franchisor;
 to comply with the franchisor’s marketing

and business plan.

 A franchisee has the right to associate with
other franchisees under the same franchise or
join any other organisation of franchisees.
 A franchisor has the right to a continuing
operational control on the operations of
franchisee.
 Without prejudice to the terms of the original
franchise, and subject to prior and written
authorisation of the franchisor, a franchisee has
the right to conclude a sub- franchise
agreement.