{"id":28283,"date":"2026-07-21T06:13:00","date_gmt":"2026-07-21T06:13:00","guid":{"rendered":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/?p=28283"},"modified":"2026-07-21T06:15:25","modified_gmt":"2026-07-21T06:15:25","slug":"uae-breach-of-contract-legal-remedies-civil-code-2025","status":"publish","type":"post","link":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/","title":{"rendered":"Breach of Contract in the UAE: Legal Remedies Under the UAE Civil Code 2025 Explained"},"content":{"rendered":"\n<h1 id=\"h-what-happens-when-a-contract-is-breached-in-the-uae-a-comprehensive-guide-to-legal-remedies-under-the-new-civil-code\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_Happens_When_a_Contract_Is_Breached_in_the_UAE_A_Comprehensive_Guide_to_Legal_Remedies_Under_the_New_Civil_Code\"><\/span>What Happens When a Contract Is Breached in the UAE? A Comprehensive Guide to Legal Remedies Under the New Civil Code<span class=\"ez-toc-section-end\"><\/span><\/h1>\n\n\n\n<p class=\"wp-block-paragraph\">Businesses operating in the United Arab Emirates frequently rely on contracts to govern commercial relationships, investments, supply arrangements, construction projects, and professional services. However, when one party fails to fulfil its contractual obligations, disputes inevitably arise. Understanding the legal consequences of a breach of contract\u2014and the remedies available under UAE law\u2014is essential for protecting commercial interests.<\/p><div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #0c0c0c;color:#0c0c0c\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #0c0c0c;color:#0c0c0c\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#What_Happens_When_a_Contract_Is_Breached_in_the_UAE_A_Comprehensive_Guide_to_Legal_Remedies_Under_the_New_Civil_Code\" >What Happens When a Contract Is Breached in the UAE? A Comprehensive Guide to Legal Remedies Under the New Civil Code<\/a><ul class='ez-toc-list-level-2' ><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#Key_Highlights_of_the_New_UAE_Contract_Law\" >Key Highlights of the New UAE Contract Law<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#The_New_UAE_Civil_Code_A_Modern_Approach_to_Contractual_Obligations\" >The New UAE Civil Code: A Modern Approach to Contractual Obligations<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#Major_Improvements_Under_the_2025_Civil_Code\" >Major Improvements Under the 2025 Civil Code<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#Good_Faith_Begins_Before_the_Contract_Is_Signed\" >Good Faith Begins Before the Contract Is Signed<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#Duty_to_Negotiate_Honestly\" >Duty to Negotiate Honestly<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#Key_Points_on_Good_Faith_Negotiations\" >Key Points on Good Faith Negotiations<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#Mandatory_Disclosure_of_Material_Information\" >Mandatory Disclosure of Material Information<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#Importance_of_Disclosure_Under_Article_122\" >Importance of Disclosure Under Article 122<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#Choosing_the_Law_That_Governs_the_Contract\" >Choosing the Law That Governs the Contract<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#Default_Governing_Law_Rules_Under_Article_19\" >Default Governing Law Rules Under Article 19<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#How_the_2025_Civil_Code_Differs_from_the_Previous_Law\" >How the 2025 Civil Code Differs from the Previous Law<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#Comparison_Between_the_1985_and_2025_Civil_Codes\" >Comparison Between the 1985 and 2025 Civil Codes<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#Remedies_Available_for_Breach_of_Contract\" >Remedies Available for Breach of Contract<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#Overview_of_Available_Remedies\" >Overview of Available Remedies<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#Specific_Performance\" >Specific Performance<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#When_Specific_Performance_May_Be_Ordered\" >When Specific Performance May Be Ordered<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#Termination_of_the_Contract\" >Termination of the Contract<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#Effects_of_Contract_Termination\" >Effects of Contract Termination<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#Compensation_for_Losses\" >Compensation for Losses<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#Essential_Elements_of_a_Compensation_Claim\" >Essential Elements of a Compensation Claim<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-22\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#Withholding_Performance\" >Withholding Performance<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-23\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#Situations_Where_Performance_May_Be_Withheld\" >Situations Where Performance May Be Withheld<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-24\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#Key_Takeaways_on_Breach_of_Contract_Remedies\" >Key Takeaways on Breach of Contract Remedies<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-25\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#Construction_Contracts_Receive_Special_Protection\" >Construction Contracts Receive Special Protection<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-26\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#Remedies_for_Defective_Construction_Work\" >Remedies for Defective Construction Work<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-27\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#Key_Features_of_Muqawala_Contract_Protection\" >Key Features of Muqawala Contract Protection<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-28\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#Liquidated_Damages_Under_Article_340\" >Liquidated Damages Under Article 340<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-29\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#Judicial_Review_of_Liquidated_Damages\" >Judicial Review of Liquidated Damages<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-30\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#Important_Points_About_Article_340\" >Important Points About Article 340<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-31\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#Hardship_and_Force_Majeure_Under_the_New_Civil_Code\" >Hardship and Force Majeure Under the New Civil Code<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-32\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#Exceptional_Hardship\" >Exceptional Hardship<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-33\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#Court_Powers_Under_Article_224\" >Court Powers Under Article 224<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-34\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#Key_Principles_of_Hardship_Protection\" >Key Principles of Hardship Protection<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-35\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#Force_Majeure\" >Force Majeure<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-36\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#Legal_Consequences_of_Force_Majeure\" >Legal Consequences of Force Majeure<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-37\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#Hardship_vs_Force_Majeure\" >Hardship vs. Force Majeure<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-38\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#Key_Takeaways_on_Hardship_and_Force_Majeure\" >Key Takeaways on Hardship and Force Majeure<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-39\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#Selecting_the_Correct_Forum_for_Contract_Disputes\" >Selecting the Correct Forum for Contract Disputes<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-40\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#Comparison_of_Dispute_Resolution_Forums\" >Comparison of Dispute Resolution Forums<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-41\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#Factors_to_Consider_Before_Filing_a_Contract_Claim\" >Factors to Consider Before Filing a Contract Claim<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-42\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#Limitation_Periods_Must_Not_Be_Ignored\" >Limitation Periods Must Not Be Ignored<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-43\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#Commercial_Limitation_Period_at_a_Glance\" >Commercial Limitation Period at a Glance<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-44\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#Practical_Guidance_for_Businesses_and_Investors\" >Practical Guidance for Businesses and Investors<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-45\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#Best_Practices_for_Contract_Risk_Management\" >Best Practices for Contract Risk Management<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-46\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#Key_Takeaways\" >Key Takeaways<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-47\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#Frequently_Asked_Questions_FAQs\" >Frequently Asked Questions (FAQs)<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-48\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#What_Is_the_Main_Remedy_for_Breach_of_Contract_in_the_UAE\" >What Is the Main Remedy for Breach of Contract in the UAE?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-49\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#Can_Parties_Choose_the_Law_Governing_Their_Contract\" >Can Parties Choose the Law Governing Their Contract?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-50\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#Can_Courts_Modify_Liquidated_Damages\" >Can Courts Modify Liquidated Damages?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-51\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#How_Does_the_New_Civil_Code_Handle_Hardship\" >How Does the New Civil Code Handle Hardship?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-52\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#What_Is_the_Limitation_Period_for_Commercial_Contract_Claims\" >What Is the Limitation Period for Commercial Contract Claims?<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-53\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#Conclusion\" >Conclusion<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-54\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uae-breach-of-contract-legal-remedies-civil-code-2025\/#Article_Summary\" >Article Summary<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n\n\n\n\n<p class=\"wp-block-paragraph\">The introduction of the <strong>UAE Civil Transactions Law (Federal Decree-Law No. 25 of 2025)<\/strong> marks one of the most significant reforms in the country&#8217;s contract law in decades. Effective from <strong>1 June 2026<\/strong>, the legislation replaces the Civil Code of 1985 and modernises the legal framework governing contractual relationships. Alongside the <strong>Commercial Transactions Law (Federal Decree-Law No. 50 of 2022)<\/strong>, it provides detailed guidance on contract formation, performance, breach, compensation, termination, hardship, and dispute resolution.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Whether you are an investor, supplier, contractor, or service provider, understanding these legal developments is critical for enforcing contractual rights and minimising commercial risk.<\/p>\n\n\n\n<h2 id=\"h-key-highlights-of-the-new-uae-contract-law\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Key_Highlights_of_the_New_UAE_Contract_Law\"><\/span>Key Highlights of the New UAE Contract Law<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><thead><tr><th>Topic<\/th><th>Key Provision<\/th><\/tr><\/thead><tbody><tr><td>Applicable Law<\/td><td>Federal Decree-Law No. 25 of 2025 (Effective 1 June 2026)<\/td><\/tr><tr><td>Replaces<\/td><td>UAE Civil Code of 1985<\/td><\/tr><tr><td>Works Alongside<\/td><td>Commercial Transactions Law (Federal Decree-Law No. 50 of 2022)<\/td><\/tr><tr><td>Main Areas Covered<\/td><td>Contract formation, breach, compensation, hardship, force majeure, dispute resolution<\/td><\/tr><tr><td>Who Should Read This?<\/td><td>Businesses, investors, contractors, suppliers, service providers, lawyers<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 id=\"h-the-new-uae-civil-code-a-modern-approach-to-contractual-obligations\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"The_New_UAE_Civil_Code_A_Modern_Approach_to_Contractual_Obligations\"><\/span>The New UAE Civil Code: A Modern Approach to Contractual Obligations<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The 2025 Civil Code represents a major evolution of UAE contract law. While retaining many established legal principles, it introduces clearer statutory rules governing negotiations, contractual performance, remedies for breach, and exceptional circumstances.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The legislation also works alongside the Commercial Transactions Law, creating a comprehensive legal framework for resolving commercial disputes across the UAE&#8217;s onshore courts.<\/p>\n\n\n\n<h3 id=\"h-major-improvements-under-the-2025-civil-code\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Major_Improvements_Under_the_2025_Civil_Code\"><\/span>Major Improvements Under the 2025 Civil Code<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Clearer rules governing contract negotiations.<\/li>\n\n\n\n<li>Enhanced duties of good faith.<\/li>\n\n\n\n<li>Modernised provisions relating to contractual performance.<\/li>\n\n\n\n<li>Improved legal remedies for breach of contract.<\/li>\n\n\n\n<li>Expanded protection during hardship and exceptional circumstances.<\/li>\n\n\n\n<li>Greater certainty for commercial dispute resolution.<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 id=\"h-good-faith-begins-before-the-contract-is-signed\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Good_Faith_Begins_Before_the_Contract_Is_Signed\"><\/span>Good Faith Begins Before the Contract Is Signed<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">One of the most significant innovations under the new Civil Code is the recognition of legal duties during the negotiation stage.<\/p>\n\n\n\n<h3 id=\"h-duty-to-negotiate-honestly\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Duty_to_Negotiate_Honestly\"><\/span>Duty to Negotiate Honestly<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Article 121 expressly requires parties to conduct negotiations in <strong>good faith<\/strong>. Although negotiations do not compel either side to enter into a final agreement, parties cannot misuse the negotiation process.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If a party begins negotiations without genuine intention, deliberately misleads the other side, or abruptly terminates discussions in bad faith, that party may become liable for the actual losses suffered by the other side.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, the law carefully distinguishes actual losses from speculative expectations. Compensation generally excludes anticipated profits or business opportunities arising from a contract that was never ultimately concluded.<\/p>\n\n\n\n<h3 id=\"h-key-points-on-good-faith-negotiations\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Key_Points_on_Good_Faith_Negotiations\"><\/span>Key Points on Good Faith Negotiations<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Negotiations must be conducted honestly.<\/li>\n\n\n\n<li>Bad faith negotiations may result in legal liability.<\/li>\n\n\n\n<li>Misleading conduct can attract compensation claims.<\/li>\n\n\n\n<li>Speculative future profits are generally not recoverable.<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 id=\"h-mandatory-disclosure-of-material-information\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Mandatory_Disclosure_of_Material_Information\"><\/span>Mandatory Disclosure of Material Information<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The Civil Code also imposes a mandatory obligation to disclose important information capable of influencing another party&#8217;s decision to contract.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Article 122 prevents parties from concealing material facts that could affect consent or contractual terms. This obligation cannot be excluded through contractual clauses. Deliberate concealment may amount to bad faith and could justify rescission or dissolution of the contract.<\/p>\n\n\n\n<h3 id=\"h-importance-of-disclosure-under-article-122\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Importance_of_Disclosure_Under_Article_122\"><\/span>Importance of Disclosure Under Article 122<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><thead><tr><th>Requirement<\/th><th>Legal Effect<\/th><\/tr><\/thead><tbody><tr><td>Disclosure of material facts<\/td><td>Mandatory<\/td><\/tr><tr><td>Contractual exclusion allowed?<\/td><td>No<\/td><\/tr><tr><td>Deliberate concealment<\/td><td>May constitute bad faith<\/td><\/tr><tr><td>Possible remedy<\/td><td>Rescission or dissolution of the contract<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 id=\"h-choosing-the-law-that-governs-the-contract\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Choosing_the_Law_That_Governs_the_Contract\"><\/span>Choosing the Law That Governs the Contract<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Commercial parties frequently enter into cross-border transactions involving multiple jurisdictions.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The UAE Civil Code allows contracting parties to expressly determine which country&#8217;s law will govern their agreement. Where the governing law clause is clearly drafted, the chosen law generally regulates both the form and substance of contractual obligations.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If no governing law is specified, Article 19 provides default conflict-of-law rules. Generally:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Contracts are governed by the law of the parties&#8217; common domicile.<\/li>\n\n\n\n<li>Where the parties reside in different jurisdictions, the governing law is usually that of the place where the principal contractual obligation is performed.<\/li>\n\n\n\n<li>Real estate contracts remain subject to the law of the country where the property is located.<\/li>\n<\/ul>\n\n\n\n<h3 id=\"h-default-governing-law-rules-under-article-19\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Default_Governing_Law_Rules_Under_Article_19\"><\/span>Default Governing Law Rules Under Article 19<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><thead><tr><th>Situation<\/th><th>Applicable Law<\/th><\/tr><\/thead><tbody><tr><td>Parties have chosen a governing law.<\/td><td>The chosen country&#8217;s law applies.<\/td><\/tr><tr><td>No governing law clause<\/td><td>Law of the parties&#8217; common domicile<\/td><\/tr><tr><td>Different domiciles<\/td><td>Law of the place where the principal contractual obligation is performed<\/td><\/tr><tr><td>Real estate transactions<\/td><td>Law of the country where the property is situated<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Continued in Part 2:<\/strong> <em>How the 2025 Civil Code Differs from the Previous Law, Remedies Available for Breach of Contract, Specific Performance, Contract Termination, Compensation for Losses, and Withholding Performance.<\/em><\/p>\n\n\n\n<h2 id=\"h-how-the-2025-civil-code-differs-from-the-previous-law\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_the_2025_Civil_Code_Differs_from_the_Previous_Law\"><\/span>How the 2025 Civil Code Differs from the Previous Law<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The transition from the 1985 Civil Code introduces several important legal refinements.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Unlike its predecessor, the new legislation expressly regulates:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Pre-contractual obligations.<\/li>\n\n\n\n<li>Duties of good faith.<\/li>\n\n\n\n<li>Mandatory disclosure requirements.<\/li>\n\n\n\n<li>Updated rules governing liquidated damages.<\/li>\n\n\n\n<li>Expanded judicial powers in hardship situations.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Another notable change concerns agreed compensation clauses.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Under the previous Civil Code, courts enjoyed broad discretion to modify liquidated damages to reflect actual losses. The new legislation retains judicial oversight but introduces more structured criteria. Courts may reduce agreed compensation if:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The amount is excessive.<\/li>\n\n\n\n<li>The obligation has been substantially performed.<\/li>\n\n\n\n<li>The claimant contributed to the resulting loss.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Conversely, where fraud or gross misconduct is established, the injured party may recover compensation exceeding the agreed contractual amount.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Civil Code also strengthens judicial powers in hardship cases by allowing courts not only to reduce burdensome obligations but, where appropriate, to cancel the contract altogether after balancing both parties&#8217; interests.<\/p>\n\n\n\n<h3 id=\"h-comparison-between-the-1985-and-2025-civil-codes\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Comparison_Between_the_1985_and_2025_Civil_Codes\"><\/span>Comparison Between the 1985 and 2025 Civil Codes<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><thead><tr><th>Aspect<\/th><th>1985 Civil Code<\/th><th>2025 Civil Code<\/th><\/tr><\/thead><tbody><tr><td>Pre-contractual obligations<\/td><td>Not expressly regulated<\/td><td>Expressly recognised<\/td><\/tr><tr><td>Good faith during negotiations<\/td><td>Limited recognition<\/td><td>Express statutory duty<\/td><\/tr><tr><td>Mandatory disclosure<\/td><td>Limited provisions<\/td><td>Clearly mandated<\/td><\/tr><tr><td>Liquidated damages<\/td><td>Broad judicial discretion<\/td><td>Structured judicial review<\/td><\/tr><tr><td>Hardship remedies<\/td><td>Limited powers<\/td><td>Courts may modify or cancel contracts.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 id=\"h-remedies-available-for-breach-of-contract\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Remedies_Available_for_Breach_of_Contract\"><\/span>Remedies Available for Breach of Contract<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">When contractual obligations are breached, UAE law offers multiple legal remedies depending on the circumstances.<\/p>\n\n\n\n<h3 id=\"h-overview-of-available-remedies\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Overview_of_Available_Remedies\"><\/span>Overview of Available Remedies<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><thead><tr><th>Remedy<\/th><th>Purpose<\/th><\/tr><\/thead><tbody><tr><td>Specific Performance<\/td><td>Compel contractual performance.<\/td><\/tr><tr><td>Termination<\/td><td>Bring the contract to an end.<\/td><\/tr><tr><td>Compensation<\/td><td>Recover financial losses<\/td><\/tr><tr><td>Withholding Performance<\/td><td>Suspend reciprocal obligations.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 id=\"h-specific-performance\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Specific_Performance\"><\/span>Specific Performance<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">One of the primary remedies remains <strong>specific performance<\/strong>, under which the defaulting party may be compelled to fulfil its contractual obligations if performance remains practically possible.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Unlike jurisdictions where damages are the primary remedy, UAE civil law generally favours actual performance whenever feasible.<\/p>\n\n\n\n<h4 id=\"h-when-specific-performance-may-be-ordered\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"When_Specific_Performance_May_Be_Ordered\"><\/span>When Specific Performance May Be Ordered<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Performance remains legally possible.<\/li>\n\n\n\n<li>Performance remains practically possible.<\/li>\n\n\n\n<li>The contractual obligation can still be fulfilled.<\/li>\n\n\n\n<li>The court considers specific performance to be an appropriate remedy.<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 id=\"h-termination-of-the-contract\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Termination_of_the_Contract\"><\/span>Termination of the Contract<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">If performance becomes impossible or the breach is sufficiently serious, the innocent party may seek termination after giving the required legal notice.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Termination generally restores both parties to their original positions. Where complete restoration cannot be achieved, the court may instead award financial compensation.<\/p>\n\n\n\n<h4 id=\"h-effects-of-contract-termination\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Effects_of_Contract_Termination\"><\/span>Effects of Contract Termination<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Ends contractual obligations.<\/li>\n\n\n\n<li>Attempts to restore the parties to their pre-contract position.<\/li>\n\n\n\n<li>Financial compensation may be awarded where restoration is impossible.<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 id=\"h-compensation-for-losses\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Compensation_for_Losses\"><\/span>Compensation for Losses<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Damages remain available where contractual breaches result in measurable financial loss.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">To recover compensation, claimants ordinarily must establish:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Existence of a contractual breach.<\/li>\n\n\n\n<li>Actual financial damage.<\/li>\n\n\n\n<li>A direct causal connection between the breach and the loss.<\/li>\n<\/ul>\n\n\n\n<h4 id=\"h-essential-elements-of-a-compensation-claim\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Essential_Elements_of_a_Compensation_Claim\"><\/span>Essential Elements of a Compensation Claim<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><thead><tr><th>Requirement<\/th><th>Explanation<\/th><\/tr><\/thead><tbody><tr><td>Contractual breach<\/td><td>The opposing party failed to fulfil contractual obligations.<\/td><\/tr><tr><td>Financial loss<\/td><td>The claimant suffered measurable damage.<\/td><\/tr><tr><td>Causation<\/td><td>The breach directly caused the financial loss.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 id=\"h-withholding-performance\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Withholding_Performance\"><\/span>Withholding Performance<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The Civil Code also recognises the principle of reciprocal obligations.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Where both parties owe simultaneous obligations, one party may lawfully suspend its own performance until the other fulfils its contractual duties.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This remedy often proves particularly valuable in construction, supply, and commercial service agreements.<\/p>\n\n\n\n<h4 id=\"h-situations-where-performance-may-be-withheld\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Situations_Where_Performance_May_Be_Withheld\"><\/span>Situations Where Performance May Be Withheld<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Construction contracts.<\/li>\n\n\n\n<li>Supply agreements.<\/li>\n\n\n\n<li>Commercial service contracts.<\/li>\n\n\n\n<li>Any agreement involving reciprocal and simultaneous obligations.<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 id=\"h-key-takeaways-on-breach-of-contract-remedies\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Key_Takeaways_on_Breach_of_Contract_Remedies\"><\/span>Key Takeaways on Breach of Contract Remedies<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Specific performance remains the preferred remedy wherever practical.<\/li>\n\n\n\n<li>Serious breaches may justify termination of the contract.<\/li>\n\n\n\n<li>Financial compensation requires proof of breach, loss, and causation.<\/li>\n\n\n\n<li>Reciprocal obligations allow lawful suspension of performance until the other party performs.<\/li>\n\n\n\n<li>The appropriate remedy depends upon the facts of each dispute.<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Continued in Part 3:<\/strong> <em>Construction Contracts, Muqawala Contracts, Liquidated Damages Under Article 340, Hardship, Force Majeure, and Judicial Powers Under the New UAE Civil Code.<\/em><\/p>\n\n\n\n<h2 id=\"h-construction-contracts-receive-special-protection\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Construction_Contracts_Receive_Special_Protection\"><\/span>Construction Contracts Receive Special Protection<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The new Civil Code introduces more practical remedies for <strong>Muqawala (construction and work) contracts<\/strong>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Where contractors perform defective work or fail to comply with contractual specifications, employers must first provide notice allowing defects to be corrected within a reasonable period.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If the contractor fails to remedy the defects, the employer may:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Terminate the contract.<\/li>\n\n\n\n<li>Appoint another contractor to complete the work.<\/li>\n\n\n\n<li>Recover the additional costs from the original contractor.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">This statutory mechanism provides businesses with greater certainty when dealing with defective construction or engineering projects.<\/p>\n\n\n\n<h3 id=\"h-remedies-for-defective-construction-work\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Remedies_for_Defective_Construction_Work\"><\/span>Remedies for Defective Construction Work<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><thead><tr><th>Situation<\/th><th>Available Remedy<\/th><\/tr><\/thead><tbody><tr><td>Defective workmanship<\/td><td>Notice to rectify defects<\/td><\/tr><tr><td>Failure to correct defects<\/td><td>Termination of the contract<\/td><\/tr><tr><td>Incomplete work<\/td><td>Appointment of another contractor<\/td><\/tr><tr><td>Additional completion costs<\/td><td>Recovery from the defaulting contractor<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h3 id=\"h-key-features-of-muqawala-contract-protection\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Key_Features_of_Muqawala_Contract_Protection\"><\/span>Key Features of Muqawala Contract Protection<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Employers must first issue notice before terminating the contract.<\/li>\n\n\n\n<li>Contractors receive a reasonable opportunity to rectify defects.<\/li>\n\n\n\n<li>Replacement contractors may be appointed where necessary.<\/li>\n\n\n\n<li>Additional completion expenses may be recovered from the original contractor.<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 id=\"h-liquidated-damages-under-article-340\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Liquidated_Damages_Under_Article_340\"><\/span>Liquidated Damages Under Article 340<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Commercial contracts frequently include clauses fixing compensation in advance for potential breaches.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Article 340 validates such agreements while preserving judicial oversight.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Courts retain authority to reduce agreed compensation where:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The agreed amount is clearly excessive.<\/li>\n\n\n\n<li>Contractual obligations have been partially performed.<\/li>\n\n\n\n<li>The claimant contributed to the loss.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">On the other hand, where fraud or serious misconduct is established, courts may award damages exceeding the contractual figure.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This balanced approach discourages abusive penalty clauses while protecting genuinely injured parties.<\/p>\n\n\n\n<h3 id=\"h-judicial-review-of-liquidated-damages\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Judicial_Review_of_Liquidated_Damages\"><\/span>Judicial Review of Liquidated Damages<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><thead><tr><th>Judicial Consideration<\/th><th>Court&#8217;s Power<\/th><\/tr><\/thead><tbody><tr><td>Excessive compensation<\/td><td>Reduce the agreed amount.<\/td><\/tr><tr><td>Partial contractual performance<\/td><td>Reduce compensation proportionately.<\/td><\/tr><tr><td>The claimant contributed to the loss.<\/td><td>Reduce damages<\/td><\/tr><tr><td>Fraud or serious misconduct<\/td><td>Award compensation exceeding the agreed amount<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h3 id=\"h-important-points-about-article-340\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Important_Points_About_Article_340\"><\/span>Important Points About Article 340<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Liquidated damages clauses remain legally enforceable.<\/li>\n\n\n\n<li>Judicial oversight protects against unfair penalty clauses.<\/li>\n\n\n\n<li>Compensation may be reduced where fairness requires.<\/li>\n\n\n\n<li>Fraud and gross misconduct may justify higher damages than those contractually agreed.<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 id=\"h-hardship-and-force-majeure-under-the-new-civil-code\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Hardship_and_Force_Majeure_Under_the_New_Civil_Code\"><\/span>Hardship and Force Majeure Under the New Civil Code<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Commercial contracts sometimes become impossible\u2014or excessively burdensome\u2014to perform due to unforeseen events.<\/p>\n\n\n\n<h3 id=\"h-exceptional-hardship\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Exceptional_Hardship\"><\/span>Exceptional Hardship<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Article 224 addresses situations where extraordinary and unforeseeable events fundamentally alter the contractual balance.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If continued performance would expose one party to severe financial hardship, the court may:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Reduce the affected obligation.<\/li>\n\n\n\n<li>Modify contractual terms.<\/li>\n\n\n\n<li>Or cancel the contract entirely.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Importantly, parties cannot contract out of this statutory protection.<\/p>\n\n\n\n<h4 id=\"h-court-powers-under-article-224\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Court_Powers_Under_Article_224\"><\/span>Court Powers Under Article 224<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><thead><tr><th>Exceptional Circumstance<\/th><th>Judicial Remedy<\/th><\/tr><\/thead><tbody><tr><td>Extraordinary unforeseen event<\/td><td>Reduce contractual obligation.<\/td><\/tr><tr><td>Severe financial hardship<\/td><td>Modify contractual terms.<\/td><\/tr><tr><td>Fundamental imbalance<\/td><td>Cancel the contract where appropriate.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h3 id=\"h-key-principles-of-hardship-protection\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Key_Principles_of_Hardship_Protection\"><\/span>Key Principles of Hardship Protection<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Applies only to extraordinary and unforeseeable events.<\/li>\n\n\n\n<li>Courts balance the interests of both contracting parties.<\/li>\n\n\n\n<li>Relief cannot be excluded by agreement.<\/li>\n\n\n\n<li>The objective is to restore contractual fairness.<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 id=\"h-force-majeure\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Force_Majeure\"><\/span>Force Majeure<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Article 236 deals with circumstances where performance becomes objectively impossible because of force majeure.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Where impossibility is total, bilateral contracts terminate automatically, releasing both parties from further obligations.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If only part of the contract becomes impossible, courts may partially terminate, modify, or cancel the agreement depending upon the circumstances and the nature of the continuing obligations.<\/p>\n\n\n\n<h4 id=\"h-legal-consequences-of-force-majeure\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Legal_Consequences_of_Force_Majeure\"><\/span>Legal Consequences of Force Majeure<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><thead><tr><th>Situation<\/th><th>Legal Effect<\/th><\/tr><\/thead><tbody><tr><td>Total impossibility<\/td><td>Automatic termination of the bilateral contract<\/td><\/tr><tr><td>Partial impossibility<\/td><td>Partial termination, modification, or cancellation by the court<\/td><\/tr><tr><td>Further contractual obligations<\/td><td>Released to the extent permitted by law<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h3 id=\"h-hardship-vs-force-majeure\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Hardship_vs_Force_Majeure\"><\/span>Hardship vs. Force Majeure<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><thead><tr><th>Feature<\/th><th>Exceptional Hardship<\/th><th>Force Majeure<\/th><\/tr><\/thead><tbody><tr><td>Performance<\/td><td>Still possible but excessively burdensome<\/td><td>Objectively impossible<\/td><\/tr><tr><td>Relevant Article<\/td><td>Article 224<\/td><td>Article 236<\/td><\/tr><tr><td>Judicial Options<\/td><td>Modify, reduce, or cancel obligations.<\/td><td>Terminate, partially terminate, or modify the contract.<\/td><\/tr><tr><td>Purpose<\/td><td>Restore contractual balance.<\/td><td>Address the impossibility of performance.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h3 id=\"h-key-takeaways-on-hardship-and-force-majeure\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Key_Takeaways_on_Hardship_and_Force_Majeure\"><\/span>Key Takeaways on Hardship and Force Majeure<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Article 224 protects parties facing exceptional hardship.<\/li>\n\n\n\n<li>Article 236 governs situations where contractual performance becomes impossible.<\/li>\n\n\n\n<li>Courts enjoy wider discretionary powers under the 2025 Civil Code.<\/li>\n\n\n\n<li>Businesses should carefully evaluate whether a situation constitutes hardship or force majeure before commencing legal proceedings.<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Continued in Part 4:<\/strong> <em>Selecting the Correct Forum for Contract Disputes, Limitation Periods, Practical Compliance Tips, Key Takeaways, and the Conclusion.<\/em><\/p>\n\n\n\n<h2 id=\"h-selecting-the-correct-forum-for-contract-disputes\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Selecting_the_Correct_Forum_for_Contract_Disputes\"><\/span>Selecting the Correct Forum for Contract Disputes<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Choosing the appropriate dispute resolution forum is often just as important as proving the breach itself.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Depending upon the contractual terms and jurisdiction clauses, disputes may proceed before:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>UAE onshore courts, including the Dubai Courts.<\/li>\n\n\n\n<li>The DIFC Courts, where jurisdiction exists.<\/li>\n\n\n\n<li>Arbitration tribunals established under the UAE Arbitration Law.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Where arbitration clauses are included, parties should carefully consider issues such as:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Governing procedural rules.<\/li>\n\n\n\n<li>Seat of arbitration.<\/li>\n\n\n\n<li>Language.<\/li>\n\n\n\n<li>Enforceability of awards.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Selecting the correct forum at the outset can significantly influence both costs and outcomes.<\/p>\n\n\n\n<h3 id=\"h-comparison-of-dispute-resolution-forums\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Comparison_of_Dispute_Resolution_Forums\"><\/span>Comparison of Dispute Resolution Forums<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><thead><tr><th>Forum<\/th><th>Suitable For<\/th><th>Key Consideration<\/th><\/tr><\/thead><tbody><tr><td>UAE Onshore Courts<\/td><td>General commercial disputes<\/td><td>Jurisdiction under UAE law<\/td><\/tr><tr><td>DIFC Courts<\/td><td>Eligible DIFC-related disputes<\/td><td>Jurisdiction clause or statutory jurisdiction<\/td><\/tr><tr><td>Arbitration<\/td><td>Commercial contracts with arbitration clauses<\/td><td>Confidentiality and enforceability of awards<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h3 id=\"h-factors-to-consider-before-filing-a-contract-claim\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Factors_to_Consider_Before_Filing_a_Contract_Claim\"><\/span>Factors to Consider Before Filing a Contract Claim<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Jurisdiction clause in the contract.<\/li>\n\n\n\n<li>Applicable governing law.<\/li>\n\n\n\n<li>Whether arbitration is mandatory.<\/li>\n\n\n\n<li>Estimated costs and duration.<\/li>\n\n\n\n<li>Enforcement of the final decision.<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 id=\"h-limitation-periods-must-not-be-ignored\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Limitation_Periods_Must_Not_Be_Ignored\"><\/span>Limitation Periods Must Not Be Ignored<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Even the strongest contractual claim may fail if legal proceedings are initiated too late.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Under Article 92 of the Commercial Transactions Law, claims relating to commercial obligations between merchants generally become time-barred after <strong>five years<\/strong> from the date the obligation falls due, unless another statutory period applies.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Businesses should therefore review contractual limitation periods immediately after identifying any breach and seek timely legal advice before valuable rights expire.<\/p>\n\n\n\n<h3 id=\"h-commercial-limitation-period-at-a-glance\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Commercial_Limitation_Period_at_a_Glance\"><\/span>Commercial Limitation Period at a Glance<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><thead><tr><th>Provision<\/th><th>Requirement<\/th><\/tr><\/thead><tbody><tr><td>Relevant Law<\/td><td>Article 92 of the Commercial Transactions Law<\/td><\/tr><tr><td>General Limitation Period<\/td><td>Five years<\/td><\/tr><tr><td>Applicable To<\/td><td>Commercial obligations between merchants<\/td><\/tr><tr><td>Exception<\/td><td>Where another statutory limitation period applies<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 id=\"h-practical-guidance-for-businesses-and-investors\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Practical_Guidance_for_Businesses_and_Investors\"><\/span>Practical Guidance for Businesses and Investors<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Businesses can significantly reduce contractual risks by adopting sound commercial practices before disputes arise.<\/p>\n\n\n\n<h3 id=\"h-best-practices-for-contract-risk-management\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Best_Practices_for_Contract_Risk_Management\"><\/span>Best Practices for Contract Risk Management<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Prepare clear and comprehensive written contracts.<\/li>\n\n\n\n<li>Include a well-drafted governing law clause.<\/li>\n\n\n\n<li>Clearly identify the dispute resolution mechanism.<\/li>\n\n\n\n<li>Maintain complete records of negotiations and communications.<\/li>\n\n\n\n<li>Document contractual performance throughout the project.<\/li>\n\n\n\n<li>Promptly issue notices where contractual breaches occur.<\/li>\n\n\n\n<li>Review limitation periods before commencing legal proceedings.<\/li>\n\n\n\n<li>Obtain legal advice before terminating significant commercial contracts.<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 id=\"h-key-takeaways\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Key_Takeaways\"><\/span>Key Takeaways<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><thead><tr><th>Issue<\/th><th>Position Under the 2025 UAE Civil Code<\/th><\/tr><\/thead><tbody><tr><td>Good Faith<\/td><td>Mandatory during negotiations<\/td><\/tr><tr><td>Disclosure<\/td><td>Material facts must be disclosed.<\/td><\/tr><tr><td>Specific Performance<\/td><td>Preferred remedy where performance remains possible<\/td><\/tr><tr><td>Termination<\/td><td>Available for serious breaches or impossibility<\/td><\/tr><tr><td>Compensation<\/td><td>Requires proof of breach, loss, and causation<\/td><\/tr><tr><td>Liquidated Damages<\/td><td>Subject to judicial review<\/td><\/tr><tr><td>Hardship<\/td><td>Courts may modify or cancel contracts.<\/td><\/tr><tr><td>Force Majeure<\/td><td>May terminate or modify contractual obligations<\/td><\/tr><tr><td>Commercial Limitation Period<\/td><td>Generally five years<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 id=\"h-frequently-asked-questions-faqs\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Frequently_Asked_Questions_FAQs\"><\/span>Frequently Asked Questions (FAQs)<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 id=\"h-what-is-the-main-remedy-for-breach-of-contract-in-the-uae\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_Is_the_Main_Remedy_for_Breach_of_Contract_in_the_UAE\"><\/span>What Is the Main Remedy for Breach of Contract in the UAE?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Specific performance remains the preferred remedy where contractual obligations can still be performed. However, depending upon the facts, courts may also award compensation, terminate the contract, or permit suspension of reciprocal obligations.<\/p>\n\n\n\n<h3 id=\"h-can-parties-choose-the-law-governing-their-contract\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Can_Parties_Choose_the_Law_Governing_Their_Contract\"><\/span>Can Parties Choose the Law Governing Their Contract?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Yes. The UAE Civil Code allows contracting parties to agree upon the governing law of their contract. Where no governing law is specified, Article 19 provides default conflict-of-law rules.<\/p>\n\n\n\n<h3 id=\"h-can-courts-modify-liquidated-damages\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Can_Courts_Modify_Liquidated_Damages\"><\/span>Can Courts Modify Liquidated Damages?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Yes. Article 340 authorises courts to reduce agreed compensation where it is excessive, where contractual obligations have been substantially performed, or where the claimant contributed to the loss. In cases involving fraud or serious misconduct, courts may award compensation exceeding the contractual amount.<\/p>\n\n\n\n<h3 id=\"h-how-does-the-new-civil-code-handle-hardship\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_Does_the_New_Civil_Code_Handle_Hardship\"><\/span>How Does the New Civil Code Handle Hardship?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Article 224 empowers courts to reduce obligations, modify contractual terms, or cancel contracts where extraordinary and unforeseeable events make performance excessively burdensome.<\/p>\n\n\n\n<h3 id=\"h-what-is-the-limitation-period-for-commercial-contract-claims\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_Is_the_Limitation_Period_for_Commercial_Contract_Claims\"><\/span>What Is the Limitation Period for Commercial Contract Claims?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Under Article 92 of the Commercial Transactions Law, claims relating to commercial obligations between merchants generally become time-barred after five years, unless another statutory limitation period applies.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 id=\"h-conclusion\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The UAE&#8217;s Civil Code of 2025 represents a significant step forward in modernising contract law and providing greater certainty for commercial transactions. By introducing express duties of good faith during negotiations, strengthening disclosure obligations, refining compensation principles, expanding judicial powers in hardship situations, and clarifying available remedies, the legislation offers a more sophisticated framework for resolving contractual disputes.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For businesses, investors, contractors, and service providers, successfully enforcing contractual rights now involves more than simply proving that a breach occurred. Parties must also consider governing law, limitation periods, dispute resolution mechanisms, available remedies, and the strategic choice between specific performance, damages, suspension of obligations, or contract termination.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Given the increasing complexity of commercial transactions and the evolving legal landscape, obtaining timely advice from an experienced contract dispute lawyer in Dubai can play a crucial role in protecting commercial interests, reducing litigation risks, and achieving effective dispute resolution under UAE law.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 id=\"h-article-summary\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Article_Summary\"><\/span>Article Summary<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The UAE Civil Transactions Law (Federal Decree-Law No. 25 of 2025) modernises UAE contract law.<\/li>\n\n\n\n<li>The legislation introduces statutory duties of good faith and mandatory disclosure during negotiations.<\/li>\n\n\n\n<li>Businesses benefit from clearer rules governing contractual performance, breach, compensation, hardship, and dispute resolution.<\/li>\n\n\n\n<li>The Civil Code strengthens judicial powers regarding hardship, force majeure, and liquidated damages.<\/li>\n\n\n\n<li>Commercial parties should carefully draft governing law and dispute resolution clauses while remaining mindful of limitation periods.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-yoast-seo-related-links yoast-seo-related-links\">\n<li><a href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/government-contracts-and-criminal-liability-analysis-of-karnataka-high-courts-landmark-ruling-on-contractual-disputes\/\">Government Contracts and Criminal Liability: Analysis of Karnataka High Court&#8217;s Landmark Ruling on Contractual Disputes<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/dubai-court-disability-child-maintenance-uae-law\/\">Dubai Court Says Disability Does Not End Child Maintenance Duty Under UAE Law<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/dubai-court-upholds-investor-rights-investment-agreement-cancelled-compensation-awarded\/\">Dubai Court Upholds Investor Rights: Investment Agreement Cancelled, Funds Recovered &amp; Compensation Awarded<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/geopolitical-tensions-and-trade-policies-on-commercial-arbitration\/\">The Impact of Geopolitical Tensions and Trade Policies on Commercial Arbitration<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/force-majeure-in-uae-law-explained-contracts-form-f-legal-impact\/\">Force Majeure in UAE Law Explained: Contracts, Form F &amp; Legal Impact<\/a><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>What Happens When a Contract Is Breached in the UAE? A Comprehensive Guide to Legal Remedies Under the New Civil Code Businesses operating in the United Arab Emirates frequently rely on contracts to govern commercial relationships, investments, supply arrangements, construction projects, and professional services. However, when one party fails to fulfil its contractual obligations, disputes<\/p>\n","protected":false},"author":1195,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_bbp_topic_count":0,"_bbp_reply_count":0,"_bbp_total_topic_count":0,"_bbp_total_reply_count":0,"_bbp_voice_count":0,"_bbp_anonymous_reply_count":0,"_bbp_topic_count_hidden":0,"_bbp_reply_count_hidden":0,"_bbp_forum_subforum_count":0,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"two_page_speed":[],"_jetpack_memberships_contains_paid_content":false,"_joinchat":[],"footnotes":""},"categories":[394],"tags":[3717],"class_list":["post-28283","post","type-post","status-publish","format-standard","category-uae-laws","tag-uae-laws"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.9 (Yoast SEO v28.0) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Breach of Contract in the UAE: Legal Remedies Under the UAE Civil Code 2025 Explained - 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