Basic Principle of Contract Law in the UAE
The contract is a binding document that recognizes and governs the rights and duties of the parties to the agreement. The contract is legally enforceable if it meets the requirements and approval of the law. A contract typically involves the exchange of goods, service, money, or promise to do or not to do any of those. "Breach of contract", means that the law will have to award the injured party either the access of available remedies under the contract or other laws of applicable jurisdictions. By and large, the contract is an agreement enforceable by law.
The contractual relationship in the United Arab Emirates is regulated by the UAE Commercial code or UAE Civil code. In addition depending upon the nature of contractual relationships, there are other regulations such as real estate, rental, ship, financial, etc to have complied. Common law jurisdictions are in place in respect of contracts executed by invoking the DIFC or ADGM Legal Arrangements. Every contract shall qualify the requirement of the offer, acceptance, subject matter, competency of parties, consideration except in the case of a gratuitous contract, terms and conditions, etc. For writing rental agreement it is necessary to take advice from real estate lawyers in Dubai or the UAE to make your contract up to the UAE civil code.
The subject matter of the contract shall not conflict with the laws of the land. A contract could be declared void or voidable depending upon the invalidating factors existed within the contract or in on the execution of the contract. Even the contract could be void about where the effect would be as there is no contract at all.
The contract could be oral or written, UAE law recognizes the validity of a verbal contract subject to the circumstantial evidence that leads to the proof of the contract. A written contract can be executed in the presence of a witness. Statutory Notarization is mandatory upon certain kinds of contracts such as Agency Agreement, MOA, Will, etc. though MOA is ratified by the Department of Economic Development(DED), Dubai without Notarization from Dubai courts.
Any contract meeting the requirement and essential ingredients could be legal unless or otherwise declared illegal by virtue of disqualifying factors on the contents or the execution of a contract. Art. 246 of the UAE Civil code clearly states that a contract must be performed in accordance with its contents, and in a manner consistent with the requirements of good faith. The law also provides provisions for the termination of the contract. Article 267 of the UAE Civil Code which states that ‘if a contract is valid and binding, it shall not be permissible for either of the contracting parties to resile from it, or vary or cancel it, save by mutual consent, or an order of the court, or under a provision of the law’.
From the practical point of view, it is very important to be careful while drafting the contract in respects of terms, duties and responsibilities, subject matter, the capacity of parties, etc. choosing the most viable law, dispute resolution mechanism and mode of execution, etc are other crucial factors to be cared before booking the contract. It is highly recommended to have an experienced lawyer to assist you over the matter. If you are looking for expert lawyers in Dubai you can contact Ibrahim Khouri law firm in the UAE for expert legal advice.
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