Construction disputes often begin with a practical decision made before anyone considers litigation. A site team accepts a revised drawing, postpones a warning about unsuitable materials or replaces a contractor without preserving the condition of the works. Those decisions can determine whether a later claim succeeds.
Businesses searching for the best lawyers in Dubai for construction contracts should look for advice that connects the contract, project records and applicable legislation. Federal Decree Law No. 25 of 2025 introduced the current Civil Transactions Law from 1 June 2026. Its provisions affect notices, defective work, pricing, termination and structural liability. A standard contract requires careful administration as well as careful drafting.
Dubai Land Department reported 124 completed real estate projects worth AED 27.5 billion in 2025, alongside 937 projects under construction. These figures show the scale of Dubai’s real estate development pipeline; they are not construction dispute counts or evidence of entitlement under a particular contract.
Establish which rules govern the project
The current law regulates contracts for work, known as muquawala, in Articles 812 to 839. Article 4 states the general rule against applying legislation retrospectively to earlier facts and acts unless otherwise provided. The date of the contract, relevant performance, breach and accrued rights therefore needs examination. Filing a case after 1 June 2026 does not, by itself, settle which substantive rules govern every issue.
This guide concerns projects governed by the federal Civil Transactions Law. A project involving a different governing law, a financial free zone or special legislation requires separate analysis. Article 4 also preserves special provisions against inconsistent later general provisions unless the legislation expressly provides otherwise.
Before advising on remedies, review the signed agreement, amendments, scope, specifications and incorporated conditions. Confirm who may issue instructions and whether a particular communication changes the price or programme.
Give timely notices when performance is threatened
Article 816 addresses materials provided by the employer. Its third paragraph requires immediate notification when defects emerge in those materials or other factors hinder proper execution. A contractor who fails to notify bears the consequences resulting from that failure. This makes prompt reporting essential when a problem first becomes apparent.
The notice should identify the problem, its likely effect and the information or instruction needed. Preserve delivery evidence and follow the contract's notification requirements. A site meeting discussion may leave uncertainty about whether the correct recipient received a formal claim.
A statutory warning does not automatically establish entitlement to additional time or payment. The contractor must still connect the event to the relevant contractual or legal remedy and substantiate its effect through programmes, progress records and costs.
Document defective work before choosing a remedy
Under Article 818, the contractor must perform according to the agreement and within the agreed period. Where defective or noncompliant performance appears during the works, the employer may require correction within a reasonable period. If that period expires without correction, the employer may, after establishing the facts, rescind the contract or appoint another contractor to complete or correct the work at the first contractor's expense.
Article 818 also identifies circumstances permitting an immediate request for rescission without granting a correction period. These include irremediable defects and certain serious failures indicating that performance will not occur. The statutory conditions should be examined against the actual evidence before acting.
Obtain technical advice, record access arrangements and preserve photographs, inspection results and relevant correspondence. Replacement work can erase evidence of the original defect. A disputed termination may also expose the employer to a counterclaim, so the reason, procedure and financial consequences should be reviewed together.
Control variations and payment expectations
Articles 826 and 827 provide payment rules on delivery and, in specified circumstances, for accepted distinct parts or significant portions of work, unless otherwise agreed. The contract may instead establish certification procedures, payment milestones and retention. A payment claim should explain how the contractual conditions have been satisfied.
Article 828 addresses contracts priced by a bill of quantities on a unit price basis. It imposes notification requirements for the specified excess over estimated quantities and provides consequences where the required notice is omitted. A substantial increase also raises distinct choices for the employer. Quantity records should therefore be updated before the final account stage.
Article 829 begins with the rule that a contractor working to an agreed design for a lump sum cannot demand an increase merely because labour or material costs rise. Additional payment for a design change depends on the statutory conditions, including employer fault or authorised changes with agreement on the increase. Record the instruction, authority and valuation rather than relying on an unsigned variation schedule.
Distinguish ordinary cost increases from exceptional circumstances
Article 829 also permits judicial intervention where unforeseeable general exceptional circumstances disrupt the balance of obligations and undermine the financial basis of the construction contract. Available measures include adjusting remuneration, extending the execution period or rescinding the contract after balancing both parties' interests.
This is a conditional remedy. A contractor should explain why the circumstances qualify, what could reasonably have been anticipated and how the project was affected. Market price movements or a difficult subcontract negotiation alone do not establish the statutory conditions. Preserve contemporaneous procurement evidence and consider mitigation before seeking relief.
Assess agreed damages and termination compensation
Article 340 permits agreed compensation but allows the court to reduce it where the debtor proves excessiveness or partial performance. The creditor's own fault in causing or increasing the harm may also justify reduction. Under the Arabic text, the court may decline compensation where the creditor's fault wholly absorbs the debtor's fault; a greater share of blame should not automatically be treated as sufficient. The creditor may claim more than the agreed amount if it proves fraud or gross fault by the debtor. Agreements contrary to these rules are void.
Delay damages therefore need analysis of responsibility, completed performance and the actual contractual obligation. The amount stated in a schedule does not remove every question about entitlement.
Article 836 separately allows the employer to withdraw from the contract and stop execution before completion, subject to compensating the contractor for expenditure, completed work and the profit it would have earned on completion. The court may reduce lost profit compensation where equitable and must, in particular, deduct savings resulting from the withdrawal and earnings from using the released time on other work. Any proposed termination should address the contract, this provision and evidence of the resulting financial position.
Understand the structural warranty
Articles 821 to 824 establish a distinct regime for collapse and defects threatening structural integrity and safety. In the circumstances defined by Article 821, the engineer and contractor are jointly liable for a ten year period beginning when the employer takes delivery, subject to the intended shorter life of qualifying structures. Article 822 limits a designer's responsibility to defects attributable to its design and makes an engineer responsible for execution defects within its supervision jointly with the contractor.
Clauses exempting or limiting liability under this regime are void. Article 824 separately bars a warranty claim after three years from collapse or discovery of the defect. The warranty period and the period for bringing the claim must therefore be distinguished. Ordinary finishing defects should not automatically be treated as decennial claims.
Article 821 does not govern the contractor's separate recourse against subcontractors. Contractual liability, the cause of the defect and the subcontract terms still require examination.
Choosing the best lawyers in Dubai for a construction dispute
Ask whether the adviser can analyse project records, work with technical experts and explain the financial consequences of each proposed remedy. Experience with the relevant contract form and dispute forum matters more than a general claim to be the best.
Check the dispute clause before commencing proceedings. Where the federal Arbitration Law applies, Articles 4 and 7 address authority and writing requirements. Article 6 treats a valid arbitration agreement separately from the main contract, subject to its terms and exceptions. Terminating the construction contract therefore does not necessarily remove the arbitration clause.
Bring the complete contract, notices, payment certificates, programmes and technical reports to the first consultation. A clear chronology helps identify urgent action and the evidence still needed.
Frequently Asked Questions
1. Does the new law automatically govern an older construction contract
No. Article 4 requires temporal analysis. The agreement and dates of relevant facts, acts and rights must be reviewed rather than assuming that a later dispute makes every new provision applicable.
2. Can a contractor recover every increase in material costs
No. Article 829 generally holds a contractor to the agreed lump sum. Qualifying variations and exceptional circumstances require separate analysis and evidence; an increase in costs alone does not establish entitlement.
3. Is every building defect covered for ten years
No. The decennial regime concerns collapse and qualifying defects threatening structural integrity or safety. Other defects may engage different contractual or legal remedies, with their own conditions and deadlines.
4. What should a construction notice include?
Identify the problem, its likely effect, the affected obligation and the information or remedy requested. Follow the contract’s delivery requirements and keep evidence of receipt. A statutory warning and a contractual claim may have different requirements.
5. Should defects be recorded before another contractor starts?
Yes. Preserve photographs, inspection results, correspondence and access records, and obtain appropriate technical advice. Replacement work may remove evidence needed to establish the original condition, responsibility and reasonable remedial cost.
About the author
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.
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About the Author
Dr. Hassan Elhais publishes analysis of UAE civil law matters, including civil disputes, contractual obligations and compensation claims. For readers researching lawyers in Dubai, his writing offers insight into the legal questions surrounding these topics. Explore his published work and practice-area information for further context.
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