Contracts Under The Civil Code UAE 2022

A well-written accurate and valid contract is very important for commercial dealings between the parties. The contract can be written or verbal. However few elements should be kept in mind while forming a binding contract.

United Arab Emirates Civil Code Article 125 defines a contract as, ‘’A contract is the coming together of an offer made by one of the contracting parties with the acceptance of the other, together with the agreement of then both in such a manner as to determine the effect thereof on the subject matter of the contract and from which results in an obligation upon each of them with regard to that which each is bound to do for the other. There may be a coincidence of more than two wills over the creation of the legal effect’’.

 

 

Forming a valid Contract :
 

While forming a valid contract the following essentials should be fulfilled, a contract must identify the contracting parties. The subject matter of the contract should be clear. For a valid contract, it is important to highlight the obligation of the contracting parties. The time period for the performance of the obligations should be mentioned. Monetary matters and matters related to consideration should be addressed and it’s very wise to decide the remedies and penalties in case a party defaults.
 

Offer acceptance and will to enter into a contract are the basic elements of a valid contract. A valid contract is legally enforceable and the law of the UAE recognizes the validity of a verbal contract subject to the circumstantial evidence that leads to the proof of the contract.
 

The subject matter of a valid contract can be,

(a) Property, whether moveable or immoveable or corporeal or incorporeal

(b) Benefits derived from the property

(c) A particular act or service and

(d) Any other thing which is not prohibited by a provision of the law and is not contrary to public order or morals
 

Laws dealing with contacts:
 

Following laws deal with the contractual relationships in UAE, The UAE Commercial code or UAE Civil code. Article 125 to article 142 of the civil code of UAE deals with the formation of a valid contract.
 

There are many other laws dealing with the contractual relationship depending upon the contracts such as real estate, rental, ship, financial, etc. Common law jurisdictions are in place in respect of contracts executed by invoking the DIFC or ADGM Legal Arrangements.
 

Read more https://lexemiratidotnet.files.wordpress.com/2011/07/uae-civil-code-_english-translation_.pdf
 

Termination of a contract:
 

Some circumstances can lead to the termination of a contract, as a contract can be terminated by the court, in this case, if one party defaults to fulfill the contractual obligations, the other party demands termination of the contract. A contract can also be terminated in accordance with the termination provisions expressly agreed upon between the parties in the contract. The parties can also terminate the contract by mutual consent. Another way of termination of the contract is by operation of law, it depends on the circumstances; a contract may be terminated as a matter of UAE law where a force majeure event occurs, which makes the performance of the contract impossible. 

 

Contact for an unlawful purpose is an invalid contract. Before getting into any legal contract, it's very important to seek guidance from a lawyer, especially arbitration lawyers in Dubai who specialize in contract law and can provide expert advice on contract termination and dispute resolution through arbitration.



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