When a port closes, a government order shuts a site or a disaster halts production, the first question is often whether the contract still has to be performed. In the UAE, the answer depends on both the civil law and the wording of the contract itself. A short force majeure clause often decides who bears the loss.
The legal framework has changed
For four decades, force majeure in onshore UAE contracts was governed by the Civil Transactions Law, Federal Law No. 5 of 1985. That law has now been replaced. Federal Decree-Law No. 25 of 2025, the new Civil Transactions Law, came into force on 1 June 2026 and repealed the 1985 code. According to legal commentary, the core principles carry over, but the article numbers have moved. The force majeure rule previously in Article 273 now sits in Article 236, and the hardship rule formerly in Article 249 is now Article 224. Contracts and older guidance citing the previous numbering should be read with this change in mind, and businesses with contracts signed before June 2026 should take advice on which version applies to them. A practical guide to force majeure under UAE law explains how the doctrine applies in everyday commercial contracts.
What counts as Force majeure
Force majeure covers events that are unforeseeable, beyond a party’s control and unavoidable, and which make performance impossible. All three elements matter. A supplier that loses its stock in a fire may qualify, while a supplier facing a sharp rise in raw material prices will not, because performance has become more expensive rather than impossible. Where performance becomes totally impossible, the obligation ends and the contract is cancelled by operation of law. Partial or temporary impossibility is treated differently: a two-week venue closure, for example, may only suspend obligations until it passes. The party relying on force majeure must prove the event and its link to the failure to perform, and should be able to show that it tried to limit losses.
Force majeure or hardship?
Many businesses claim force majeure when hardship is the better fit. Hardship applies where exceptional, unforeseen events of a general nature make performance excessively burdensome, threatening serious loss, but not impossible. In those cases, a court or tribunal may adjust the obligation to a reasonable level rather than ending the contract. Commentary on the new code notes that the hardship test now refers explicitly to events arising after the contract is concluded. Treating a cost problem as force majeure and suspending performance can itself amount to a breach, so identifying the right doctrine is essential.
Drafting a strong clause
The law can apply even when a contract is silent, but a clear clause gives both parties certainty. A well-drafted clause defines the events it covers, such as natural disasters, government orders, war and epidemics, while expressly excluding ordinary market changes or supplier insolvency. It sets a notice deadline, often a matter of days, and specifies the evidence required. It states whether obligations are suspended or ended, extends deadlines for the duration of the event and confirms that payments already due remain payable. Mitigation duties and a long-stop date, after which either party may terminate if the event continues, complete the structure. Many businesses also add a hardship mechanism, such as a price review, rather than relying on the statute alone.
Handling a claim in practice
When an event occurs, the first step is to review the contract and its governing law, then send written notice within the required period. Official orders, correspondence and records of alternative arrangements should be kept, as they form the evidence base. Parties receiving a claim should test it against the clause and the law, request proof and ask what mitigation steps have been taken. A revised schedule often avoids a dispute altogether. Where talks fail, the contract’s dispute resolution clause determines whether the matter goes to arbitration or the courts.
Conclusion
Force majeure in the UAE offers relief only when an event is unforeseeable, unavoidable and makes performance impossible, and the legal references have moved under the new Civil Transactions Law. Precise drafting, timely notice and strong records remain the best protection. Companies operating from onshore free zones such as Meydan Free Zone are generally subject to the federal civil law for their contracts, so reviewing key agreements against the new code is a sensible step.
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