Introduction: Force Majeure in UAE Contract Law and Compliance for 2025
In the dynamic landscape of the United Arab Emirates, businesses and legal practitioners must remain vigilant to changes in legislation and emerging contractual risks. In recent years, the force majeure clause has taken centre stage in UAE contracts—its significance amplified by the unforeseen global events of the past decade. With the advent of Federal Laws such as Federal Decree-Law No. (50) of 2022 (UAE Civil Code) and continuous regulatory updates through 2025, understanding the intricacies of force majeure is no longer a legal luxury, but a necessity for sustainable business operations.
This article provides a comprehensive, consultancy-grade analysis of force majeure clauses in UAE contracts. Drawing from authoritative sources including the UAE Civil Code, Ministry of Justice guidelines, and recent cabinet resolutions, we guide businesses, executives, HR managers, and legal professionals through the evolving legal landscape, highlighting practical compliance strategies and risk mitigation techniques. This analysis is particularly timely, as the UAE implements new regulatory standards in 2025 aimed at enhancing commercial certainty and contract enforcement. Whether you are drafting contracts, managing disputes, or assessing compliance exposure, this resource will empower you to make informed decisions and stay ahead of legal developments.
Table of Contents
- Overview of Force Majeure in UAE Law
- The Evolution of Force Majeure in the UAE Civil Code
- Force Majeure After COVID-19: Lessons and New Approaches
- Drafting and Enforcing Force Majeure Clauses in 2025
- Comparative Table: Old vs. New Force Majeure Legal Frameworks
- Case Studies and Hypothetical Scenarios
- Legal Compliance Strategies for Businesses in 2025
- Risks of Non-Compliance with Force Majeure Requirements
- Conclusion and Forward-Looking Best Practices
Overview of Force Majeure in UAE Law
Definition and Legal Source
Force majeure (القوة القاهرة) describes extraordinary events or circumstances beyond the control of the contractual parties, which prevent, impede, or delay the performance of contractual obligations. The classic examples include natural disasters, government intervention, war, or pandemics. In UAE law, the principal legislative foundation is the Civil Transactions Law (Federal Law No. (5) of 1985, replaced by Federal Decree-Law No. (50) of 2022), supplemented by judicial interpretations and cabinet clarifications.
Official Reference
Federal Decree-Law No. (50) of 2022 on the Civil Transactions Law (UAE Civil Code) is the central instrument. Notable articles include:
- Article 273: Provides that a contract is dissolved automatically if its performance becomes impossible due to force majeure, wholly or partially. If partial, only the corresponding part is dissolved.
- Article 472: Outlines instances where a party is not liable for non-performance due to events extending beyond reasonable control.
Court judgments and Ministry of Justice guidelines elaborate on how and when force majeure may be invoked, distinguishing it from hardship (غير متوقع), which merely makes performance more onerous.
The Evolution of Force Majeure in the UAE Civil Code
Historical Perspective
Historically, the UAE Civil Code adopted concepts from Islamic and international civil law. Earlier provisions placed strict requirements on the proof of impossibility and excluded mere economic hardship from the scope of force majeure (see Federal Law No. (5) of 1985, Articles 273 and 472).
Key Legal Developments Impacting 2025
- The 2022 replacement of the Civil Code narrowed and clarified the scope of force majeure – requiring that events be unforeseeable at contract formation and truly render performance objectively impossible, not merely onerous. This is reinforced by Ministerial Guide No. 8 of 2024 from the UAE Ministry of Justice, emphasizing substantiation of impossibility in force majeure claims.
- Cabinet Resolution No. (15) of 2024 (on Commercial Contracts) introduces additional compliance obligations for force majeure notification, documentation, and mitigation efforts starting from January 2025.
Practical Insight
This evolving legal context means that businesses cannot assume that generic force majeure wording will provide adequate protection. Clear drafting, robust risk analysis, and timely compliance are critical under the 2025 regime.
Force Majeure After COVID-19: Lessons and New Approaches
Real-World Impact
The COVID-19 pandemic put force majeure clauses under unprecedented scrutiny across the UAE. The courts clarified that government lockdowns, supply chain interruptions, or health emergencies may qualify as force majeure—provided they meet the high threshold of unforeseeability and unavoidable impossibility to perform.
Legal Clarification During the Pandemic
The UAE Ministry of Justice Circular No. 23 of 2020 and subsequent judicial guidance stressed that businesses cannot invoke force majeure for events that were foreseeable or for anticipated regulatory changes.
Post-Pandemic Contracting Strategies
- Force majeure clauses must now reflect pandemic risks explicitly, specifying events covered, reporting timelines, and risk allocation mechanisms.
- Businesses should review older agreements to ensure alignment with updated standards required by the 2025 compliance landscape.
Drafting and Enforcing Force Majeure Clauses in 2025
Clause Drafting Essentials
To be effective under the UAE’s stricter legal environment, force majeure clauses must:
- Define what constitutes force majeure (pandemic, war, natural disasters, governmental actions, etc.).
- List explicit exclusions (e.g., foreseeable regulatory changes, existing supply chain disruptions).
- Impose notification obligations with defined timeframes (per Cabinet Resolution No. (15) of 2024).
- Allocate risk, costs, and remedies in the event of force majeure (suspension, contract termination, price adjustment).
Enforceability Criteria
For courts or arbitral bodies to enforce such clauses, parties must provide documentation of the event, a direct causal link to performance impossibility, and evidence of mitigation attempts.
Practical Guidance
- Implement a contractual force majeure claim process: Notice – Documentation – Assessment – Mitigation – Decision.
- Provide periodic training and guidelines to relevant internal stakeholders (legal, HR, contract management).
- Maintain contemporaneous records to substantiate claims or defend against unwarranted invocation by counterparties.
Comparative Table: Old vs. New Force Majeure Legal Frameworks
| Aspect | Pre-2022 Legal Framework | 2022 Onwards (Post-2025 Compliance) |
|---|---|---|
| Definition | Broader interpretation; included severe hardship. | Narrowed; only true impossibility, not mere hardship. |
| Notification Obligations | Vague; only general requirement to inform. | Strict deadlines per Cabinet Resolution No. (15) of 2024. |
| Proof Burden | On party invoking force majeure; less stringent documentation. | High burden of proof; express documentation, contemporaneous evidence required. |
| Exclusions | Unclear; scope of exclusions often disputed. | Must be expressly stated; specific risks can be excluded or allocated. |
| Mitigation Requirement | Implied but not detailed. | Expressly required; party must show attempts to mitigate effects. |
| Remedies | Termination or suspension often automatic. | Tailored remedies; suspension, adjustment, or partial performance specified. |
Visual Suggestion: Use a compliance checklist infographic summarizing required documentation, deadlines, and internal controls for force majeure compliance under 2025 standards.
Case Studies and Hypothetical Scenarios
Case Study 1: Supply Chain Disruption in the Construction Sector
Scenario: A UAE-based development firm faces delayed material shipments due to new trade restrictions. Invoking the force majeure clause, the contractor claims relief from liquidated damages.
Analysis: Under the 2022 Civil Code and 2024 Cabinet Resolution, the contractor must prove:
- The trade restrictions were unforeseeable at contract signing;
- The disruptions directly caused non-performance;
- Mitigation steps (alternative suppliers) were explored;
- Timely notice and documentation were provided to the employer.
Outcome: If evidence meets the threshold, extension of time may be granted, but blanket relief without proper substantiation is unlikely under the 2025 regime.
Case Study 2: Event Management During a Public Health Emergency
Scenario: An events company is forced to cancel its high-profile conference when a health emergency prompts government restrictions on gatherings.
Analysis:
- If the force majeure clause specifically covers “epidemics” and “government intervention,” suspension or cancellation is justified.
- The company must still show timely notice and that it explored options such as postponement or virtual alternatives before claiming relief.
Outcome: Courts are likely to uphold the claim if these compliance elements are documented.
Hypothetical: Tenant’s Force Majeure Claim for Rent Suspension
With rising regulatory focus, tenants seeking to suspend rent payments during force majeure events must now provide robust documentary evidence, including notice to landlords, official government closure orders, and proof of income disruption.
Legal Compliance Strategies for Businesses in 2025
Steps for Ensuring Compliance
- Contract Review and Redrafting: Conduct a comprehensive review of existing contracts for force majeure sufficiency, ensuring alignment with 2025 legal benchmarks.
- Internal Policy Update: Update internal compliance manuals in line with recent ministerial and cabinet guidelines – especially notice timelines and documentation standards.
- Stakeholder Training: Educate executives and contract managers on the correct procedural steps for handling force majeure risks and claims.
- Risk Assessment: Embed force majeure impact analysis into enterprise risk management, with clear escalation procedures.
- Integrated Recordkeeping: Deploy digital solutions for real-time document management and event tracking, improving responsiveness to regulatory or contractual queries.
Visual Suggestion: Process flow diagram showing steps from event occurrence to claim assessment and resolution under Cabinet Resolution No. (15) of 2024.
Risks of Non-Compliance with Force Majeure Requirements
Legal and Commercial Ramifications
- Inadmissibility of Claims: Poorly drafted or outdated force majeure clauses risk having claims dismissed in court or arbitration.
- Penalties and Damages: Failure to comply with notification or mitigation obligations can result in damages, adverse judgments, or loss of contractual remedies.
- Reputational Risk: Mishandled claims can damage business reputation and counterparty trust, impacting commercial relationships and future opportunities.
Comparison of Penalties: Old vs. New Regime
| Risk/Consequence | Pre-2022 | 2025 and Beyond |
|---|---|---|
| Claim Dismissal | Occasional due to vague clauses | Frequent if compliance steps not proven |
| Damages to Counterparty | Standard breach damages | Enhanced damages for non-compliance with process |
| Regulatory Action | Rare | Possible under new Cabinet Resolutions |
Conclusion and Forward-Looking Best Practices
The legal environment in the UAE continues to mature, demanding higher standards of clarity, diligence, and accountability regarding force majeure. The shift towards stricter enforcement of notification, proof, and mitigation obligations means that businesses must prioritize contract redrafting, compliance process development, and ongoing staff education well into 2025 and beyond.
Key takeaways include:
- Force majeure protection hinges on bespoke, scenario-specific contract clauses and proactive compliance.
- Maintaining thorough documentation and following procedural steps is now essential to any future claim or defence.
- Non-compliance can magnify legal, financial, and reputational risks due to heightened regulatory scrutiny.
As the UAE positions itself as a global business and legal centre, organizations are strongly advised to seek regular legal counsel, stay abreast of statutory updates, and implement systematic compliance reviews. Embracing these best practices will not only ensure contract enforceability and resilience, but also build lasting stakeholder confidence in the increasingly competitive UAE market.