A disrupted contract raises an immediate business question: which obligations must still be performed, and what relief can lawfully be claimed? Lawyers in Dubai assessing force majeure examine the particular promise affected, the cause of the disruption and the contract's governing law. A closure, transport interruption or unexpected restriction does not produce the same result in every agreement.
The UAE Civil Transactions Law introduced by Federal Decree Law No. 25 of 2025 took effect on 1 June 2026. It distinguishes impossibility under Article 236 from exceptional hardship under Article 224. That distinction determines whether the relevant argument concerns discharge, adjustment or a court order ending the contract. Businesses need evidence of the event's actual effect before stopping work, withholding payment or announcing termination.
Start with the signed agreement, its amendments and the law governing the disputed obligation. A contract's connection with Dubai does not establish that every dispute follows the same substantive rules. The forum clause, arbitration agreement and any applicable specialist legislation also need review.
Timing matters. Article 4 of the Civil Transactions Law states the general rule against applying the law retrospectively to earlier facts and acts, unless otherwise provided. It also preserves special provisions against displacement by a later general provision without express legislative authority. For an agreement spanning June 2026, identify when the relevant transaction and events occurred before choosing the applicable provisions.
Separate the promises within the agreement. A supplier might be unable to deliver one product while remaining able to deliver others. A customer might still owe invoices for goods already accepted. Treating every duty as suspended can create a second dispute that the original disruption does not justify.
Article 236 addresses contracts imposing obligations on both parties. Where force majeure makes performance impossible, the corresponding obligations are extinguished and the contract ends automatically under the statutory rule. Whether the required impossibility actually exists can nevertheless be disputed. A unilateral statement that the contract has ended does not establish the facts supporting that conclusion.
The article gives separate treatment to partial impossibility. Either party may invoke the extinguishment of the corresponding obligation or ask the court to rescind the contract. The analysis should therefore identify which performance has become impossible and how the remaining performance fits the bargain.
For temporary impossibility in continuing contracts, Article 236 allows either party to invoke extinguishment of the corresponding obligation or modification of the contract, or to seek judicial rescission. Temporary interruption should be assessed against the duration and purpose of the agreement. It does not invariably justify cancelling the entire relationship.
Consider a distribution agreement involving several independently supplied product lines. A legal prohibition affecting one line requires analysis of that obligation, the duration of the restriction and the contractual allocation of risk. It cannot simply be assumed to release unrelated deliveries or payments already due.
An increase in freight charges, a sharp movement in input prices or reduced customer demand may make a transaction unattractive without making performance impossible. The facts should be tested against the hardship rule where that is the real issue.
Under Article 224, exceptional circumstances of a general nature must arise that could not have been foreseen when contracting. Their effect must make the obligation onerous and threaten the debtor with serious loss. The court may balance the parties' interests and reduce the obligation to a reasonable level or order rescission. An agreement excluding that statutory power is void.
The provision does not give a company an unrestricted right to rewrite its own prices or payment dates. A hardship argument requires evidence of the original financial assumptions, the relevant change and its effect on performance. Ordinary commercial risk and a qualifying exceptional event must be distinguished on the evidence.
A force majeure clause may identify covered events, require notice within a specified period and set conditions for extensions, suspension or termination. Other clauses may allocate supply chain risk, address changes in law or require particular insurance. Read these provisions together rather than relying on the heading of a single clause.
Article 221 requires performance according to the contract and good faith. It also recognises obligations arising from law, custom and the nature of the obligation. The contract's wording and its legal context therefore both matter.
A notice should identify the affected obligation, when the disruption began, the evidence presently available and the relief being requested. Follow the agreed delivery method and recipient details. Record receipt and provide updates where required. There is no universal contractual notice period suitable for every commercial agreement.
Avoid claiming more than the evidence supports. If the impact is still being assessed, explain that position accurately. A request for a temporary extension can preserve a useful relationship while the parties investigate whether the interruption will continue.
The most useful records show how the event prevented the particular performance. A general news report may establish that disruption occurred somewhere, but it may not explain why this supplier could not meet this delivery commitment.
Preserve the contract, relevant orders, official restrictions, correspondence and operational records. Create a dated account of what changed, the duties affected and the steps considered to continue performance. Record any alternative routes or suppliers assessed and why an alternative was unavailable, unsuitable or outside the agreed bargain.
This work matters to potential damages claims. Article 336 addresses compensation for failure, delay or defective performance, including the debtor's ability to establish an external cause beyond its control. Article 428 separately provides for extinguishment where the debtor proves impossibility caused by an external cause beyond its control. A claim should be tied to the applicable provision and supporting facts.
Ending a contract does not answer every question about money or property. Article 237 generally requires restoration of the parties to their positions before the contract, with compensation where restoration is impossible. Advance payments, delivered goods and services already consumed may need separate treatment.
If the parties agree an extension or revised programme, record which obligations change and which remain enforceable. Address outstanding invoices, custody of goods, additional costs and what happens if disruption continues. Obtain appropriate authority for the amendment. Avoid allowing informal operational discussions to leave the settlement itself uncertain.
Dubai Chambers’ 2025 Annual Report records 201 mediation cases received, with a combined value exceeding AED 241 million. These are commercial dispute-resolution service figures; they do not identify force majeure cases or establish that a contractual disruption qualifies for statutory relief. They provide context for considering a negotiated solution alongside the legal merits.
Legal review should produce a practical assessment of the available remedy, supporting evidence and consequences of getting the response wrong. It should also identify contractual negotiation requirements and the court or tribunal entitled to decide the dispute.
DIFC and ADGM matters need separate analysis. The DIFC Courts have applied Article 82 of the DIFC Contract Law, which contains its own force majeure requirements and excludes a mere obligation to pay. Article 83 preserves the creditor's right to require payment. ADGM's civil and commercial framework is based on English common law and its own enactments. Federal Article 236 should not be assumed to govern either framework.
Where the applicable UAE federal law governs, Article 236 supplies a statutory basis for relief. The absence of a clause does not remove the need to establish the legal conditions and the event's effect on performance.
No. Examine the promise made to your customer, your allocation of supplier risk and whether the delay actually prevents performance. Preserve evidence of alternatives and contractual notices before deciding that relief is available.
Do not assume that all payments cease. Identify the corresponding obligation, any accrued debt and the relevant law. The treatment of an advance for impossible future performance may differ from an invoice for goods already received.
No automatic result should be assumed. Review the clause’s conditions, the affected obligation, the applicable law and evidence of the event’s actual effect. Follow the required notice procedure and assess any remaining performance separately.
Specify the revised obligations and programme, outstanding invoices, custody of goods, additional costs and what happens if disruption continues. Confirm the signatories’ authority and record which terms remain enforceable.
Dr. Hassan Elhais is a Senior Legal Consultant at Amal Al Rashedi Lawyers and Legal Consultants in Dubai. He advises on UAE family, civil, commercial and criminal law matters.
اتصل بنا
اتصل بنا
