Introduction
Operating a business in the UAE requires a clear understanding of the commercial and contractual landscape. With a mix of civil law traditions and modern commercial regulations, the UAE provides an evolving legal framework designed to attract global business. Whether you are a start-up, SME or large corporation, understanding your rights and obligations under UAE Commercial and Contract Law is essential.
The Foundations of Commercial Law in the UAE
Commercial Law in the UAE is primarily governed by the UAE Commercial Transactions Law (Federal Law No. 18 of 1993) and the UAE Civil Code (Federal Law No. 5 of 1985). These laws regulate trade, commerce, contracts, and obligations. Businesses must also be aware of industry-specific regulations and the legal requirements for licensing and permits.
Key Elements of Contract Law
Contracts in the UAE must meet certain legal requirements to be valid:
- Mutual Consent– All parties must willingly agree to the terms.
- Legal Purpose– The contract must relate to a lawful activity.
- Capacity– Parties must have the legal capacity to enter into a contract.
- Consideration– There must be a clear exchange of value.
Written contracts are strongly recommended and in many cases legally required. Arabic is the official legal language, and contracts should be translated where necessary.
Enforceability and Dispute Resolution
In the event of a breach of contract, the injured party may seek remedies including damages, specific performance, or termination. The UAE courts, as well as arbitration centres such as DIAC and DIFC-LCIA, provide dispute resolution forums.
Why Legal Advice Matters
Having a commercial lawyer review or draft your contracts ensures legal compliance, reduces ambiguity, and protects your interests. Misunderstandings in contractual terms can lead to costly disputes.
Conclusion
Understanding and adhering to commercial and contract law in the UAE is critical for smooth business operations. Seeking professional legal advice at the outset helps minimise risk and ensures you remain compliant with local legislation.
