Contracts in the UAE: 10 essentials to secure your deals

In the United Arab Emirates, contract law is primarily set by the Civil Transactions Law (Federal Law No. 5 of 1985, as amended) with sector specific regimes (labour, real estate, consumer protection…). For local and foreign operators, mastering validity, language, governing law/venue, liability limitations, implied terms, termination and force majeure is key to preventing disputes and enforcing rights.

Validity requirements

A valid contract requires offer/acceptance, parties’ capacity, and a lawful purpose. Writing is not always mandatory but strongly recommended (evidence, enforceability). Some contracts need a specific form and/or registration (employment, real estate, security interests).

Language

English and Arabic are commonly used. In local court proceedings, Arabic prevails or an official translation is produced. Prefer a dual language document with a prevailing language clause and professional translation.

Governing law and dispute resolution

Choose law and venue: onshore courts (civil law), DIFC/ADGM (common law), or arbitration (UAE Arbitration Law; local/international centres). Without a clause, conflicts of law/forum may arise. Add a pre–litigation step (mediation) where useful.

Types and specific requirements

• Real estate: writing and registration at the Land Department.
• Employment: writing, mandatory particulars (role, pay, hours), compliance with Law No. 33/2021.
• Commercial: standard clauses (price, delivery, penalties, warranties, liability).

Exclusion/limitation of liability

Generally enforceable if clear, proportionate and not contrary to public policy (absolute exclusions can be struck down). Define caps, exclusions (indirect/loss of profit), late payment penalties, warranties and claim procedure.

Implied terms and good faith

The Civil Code may imply obligations (e.g., good faith, usages) if not expressly addressed. Draft comprehensive clauses (SLA, acceptance tests) to align expectations and reduce interpretative gaps.

Termination and breach

Define termination for cause (material breach, insolvency, change of control), notice, consequences (acceleration, restitution) and remedies (damages, specific performance where applicable, injunction). Include a cure process (notice, remediation period).

Force majeure and frustration

Force majeure releases (or suspends) performance rendered impossible by an external, irresistible event (disasters, war, prohibitions). Absent an FM clause, courts may apply frustration. Set notice, effects (suspension/termination) and exclusions (foreseeable events).

Musthave technical clauses

• Confidentiality, data protection, compliance (sanctions, anticorruption).
• IPR: title to deliverables, licences, internal/third party use.
• Indemnities (third party claims), non solicit, noncompete (proportionate).
• Insurance, financial securities (deposits, LC), HSE

Contract governance and evidence

Organise performance: change orders, minutes, formal acceptances, incident logs, traceability of deliveries/payments. Use MSA/SoW/PO with a clear order of precedence.

In the UAE, robust contracts rely on clarity, the local legal framework (form, registration, language), risk allocation (liability, warranties, FM) and strong governance (evidence, variations, remedies). Anticipating governing law and dispute mechanisms reduces uncertainty and accelerates execution.

Our lawyers, who are experts in business law, are available to answer all your questions and provide advice. We offer face-to-face meetings or videoconferencing. You can make an appointment directly online at https://www.agn-avocats.fr/.

AGN AVOCATS – Business Law
contact@agn-avocats.fr
09 72 34 24 72