Ever wonder how business contracts are curated? They’re made with the assumption that both the parties involved will be meeting their obligations. However, sometimes, due to unanticipated events, it isn’t possible to perform. Natural disasters, restrictions from the government, significant infrastructure breakdowns, or other events that are outside the control of a party can cause disruption even when the agreements are well-planned.
This is exactly when force majeure turns out to be relevant. However, under the present UAE contract law, a sudden unexpected event doesn’t by default absolve a party from fulfilling its contractual duties. The event’s nature, how it affects the performance, the terms of the contract, and legal provisions that apply… all of them need to be taken into consideration.
For companies that are operational in the United Arab Emirates, knowing the force majeure meaning could be helpful in responding in an appropriate manner when circumstances that aren’t under their control impact a contract. In this blog, we’ll understand what Force majeure is all about, when it’s applicable, and how companies should stay prepared.
What’s Force Majeure?
It usually relates to an event that is exceptional and cannot be controlled by a party, making contractual performance objectively unattainable.
If you’re wondering which Federal Decree-Law governs the current legal framework concerning Civil Transactions in the United Arab Emirates, it is Undang-undang Dekri Persekutuan No. (25) tahun 2025, which promulgates the Civil Transactions Law. The law became effective on 1 June 2026 & repealed & replaced Undang-undang Persekutuan No. (5) tahun 1985, seperti yang dipinda.
The present approach concentrates on whether the particular relevant occurrence could’ve been predicted in a reasonable manner or avoided, & if it really prevents performance.
For those who do not know, Dubai’s DET outlines 4 key considerations:
- Unforeseability
- Ketidakupayaan untuk dielakkan
- Objective Impossibility
- Penyebab Langsung
Therefore, a contract turning out to be more expensive or commercially inconvenient doesn’t automatically establish what we call force majeure.
So, When Is Force Majeure Applicable?
Certain questions are necessary if you want to determine if an event qualifies.
1. Was the Occurrence Unforeseeable?
The circumstances should commonly be evaluated depending on what could’ve been predicted in a reasonable manner when the applicable contractual obligations arose.
2. Was It Possible to Avoid the Event?
A party might need to show that reasonable steps couldn’t possibly have stopped the occurrence or the consequences it has.
3. Is Performance Really Impossible?
This is among the most crucial considerations. A cost increase, decreased profitability or inconvenience when it comes to operations doesn’t necessarily make the performance not possible.
4. Did the Event Result in the Failure?
The external event, as well as the inability to perform, has to be directly connected. If the particular party would’ve failed to perform regardless, it might be difficult to rely on force majeure.
Catatan: Apabila anda claiming force majeure in a dispute that is commercial, these factors are especially relevant.
Force Majeure Clause UAE: Why Does It Matter?
The statutory framework is but one part of the whole picture. How the disruption gets handled can be significantly affected by the contract itself.
A force majeure clause in the UAE that’s used by companies might define qualifying events & outline what the procedures will be when it comes to notification, proof, mitigation, suspension & termination.
For instance, a clause may address:
- Events that could trigger relief
- The deadline to notify the other party
- Paperwork needed to support a claim
- If obligations are suspended
- Responsibilities for impact mitigation
- In case disruption continues, what happens
- Rights to terminate in case the disruption continues even after a specified period
Therefore, companies should be verifying their agreement’s actual wording instead of being under the notion that an event by default is falling within the clause.
A force majeure clause in a United Arab Emirates contract also needs to be aligned with the governing law and the contract type involved.
How is Force Majeure Different From Hardship?
It could be common for people to get confused between Force majeure & hardship. The truth is, they shouldn’t be perceived as interchangeable concepts. When speaking of force majeure, the key issue is whether the performance has turned out to be objectively impossible due to an external event.
Hardship, however, is different. Here, performance might be a possibility. However, circumstances might have changed in such a significant manner that being able to fulfil the obligation turns out to be exceptionally burdensome.
To exemplify, a supplier who is seeing a substantial rise in production expenses might still have the capability to deliver the goods. Having said that, that doesn’t necessarily imply that the supplier can depend on force majeure.
This difference matters. It’s because of the fact that the legal consequences that are available can vary. The new UAE Civil Transactions Law specifically addresses both of these concepts within its revised contractual framework.
Breach of Contract UAE: How Does Force Majeure Affect It?
A party that has failed to perform their contractual duty may ordinarily face a breach of contract UAE claim. That said, a force majeure event that is established might affect liability where the legal requirements are satisfied.
Remember, causation is the key issue. To put it simply, a party can’t depend on an external occurrence if the performance failure was actually brought about due to its own actions, improper planning, or any other problem that is unrelated.
To exemplify, if a company is already lacking the resources needed to perform a contract prior to the occurrence of an external disruption, it might be challenging to establish that it was the external event that was the real reason for non-performance.
That’s the precise reason why, when companies are claiming force majeure, they should be documenting the timeline in a careful manner.
Explained: Construction Force Majeure
When an external occurrence (that is extraordinary) affects the ability of a project to proceed as per its scope or planned contractual schedule, construction force majeure can arise.
Construction projects are especially exposed to disruption due to the fact that they are dependent on labour, materials, transport, permits, tools, utilities and a number of subcontractors.
Some of the potential issues might be:
- Restrictions that prevent access to a site of the project
- Severe natural events that damage crucial infrastructure
- Measures by the government that prevent specific works
- Major disruption when it comes to the essential materials’ availability
- External occurrences that make agreed works not possible to perform
However, project delays that are ordinary do not, by default, make construction force majeure. To put it simply, delays that are caused due to poor project management, shortages that are predictable, or the failure of the contractor themselves might remain the responsibility of the contractor.
Therefore, contracts have to properly distinguish between delays that are excusable, delays that are compensable, and events that are outside the control of a party.
Making a Force Majeure Claim in the United Arab Emirates
Companies that are thinking of claiming force majeure should have a systematic approach instead of immediately stopping performance.
1. Checking the Contract
To start with, check the contract’s force majeure clause UAE provisions. Determine the events that are listed, thresholds, notice periods & what the procedural requirements are.
2. Identifying the Actual Disruption
Define accurately what happened & when. Steer clear of relying on statements that are broad, like “the condition of the market has changed.”
3. Establishing Causation
Display how the event stopped or affected the particular contractual duty. Remember, stronger proof connecting the occurrence to the non-performance means a stronger position.
4. Preserving the Proof
Make sure to have the applicable government notices, correspondence, communications from the supplier, records of the project, invoices, records of delivery and any other documents that demonstrate the impact.
5. Giving the Contractual Notice
If the contract calls for notice within a particular period that is specified, make sure to comply with that requirement. Not meeting a deadline for contractual notice can result in additional complexities.
6. Considering Mitigation
Take reasonable steps in order to decrease the impact wherever it’s possible to do so. A party shouldn’t let losses that can be avoided increase simply because it thinks that force majeure can be applied.
7. Communicating With the Counterparty
Wherever appropriate, have a conversation regarding temporary arrangements, revisions to timelines or performance options that are alternatives prior to the dispute escalating.
What Companies Should Be Including in Their Contracts?
A powerful contractual framework can help decrease uncertainty when an unanticipated event happens.
Companies ought to consider addressing:
- The scope as well as the definition of the events that qualify
- Notice periods & methods of communication
- Keperluan bukti
- Temporary suspension of duties
- Mitigation responsibilities
- Treatment of payments & expenses
- Partial vs full impossibility
- Long-stop periods when it comes to prolonged disruption
- Rights of termination
- Procedures for dispute resolution
For companies that are working on big projects, construction force majeure provisions ought to address risks that are project-specific. This includes access, materials, labour, restrictions from the government and extensions when it comes to time.
Click to download the UAE Force Majeure Guide Book as provided by the Govt Of Dubai.
How the Shuraa Business Setup Can Help?
Comprehending force majeure & how the same is applicable under UAE contract law might be complex when unanticipated occurrences affect your business. At Shuraa, we help companies comprehend the administrative & compliance sides of being operational in the United Arab Emirates & help connect them with suitable expert support when contractual problems come up.
Thinking of claiming force majeure? You need to ensure that you have the applicable contracts, company paperwork & supporting records in an orderly manner. We can support you with business paperwork & corporate requirements, while experienced legal professionals can offer expert guidance on force majeure, disputes concerning the contract, and possible claims regarding breach of contract in the UAE.
Protect Your UAE Business With the Right Setup & Compliance Support
Unexpected events can disrupt contracts, operations, and business commitments. While force majeure claims depend on the specific contract terms and applicable UAE laws, having proper business documentation, licensing, and compliance support can help companies respond more effectively during uncertain situations.
Shuraa Business Setup also helps businesses with:
- Company Formation in the UAE
- Lesen perdagangan and corporate documentation assistance
- PRO and government-related services
- Pembaharuan Lesen Perdagangan & Activity Amendments
- VAT Registration & Tax Compliance Support
Soalan Lazim
Q1. What Does Force Majeure Mean?
It refers to an unanticipated event that is reasonably beyond the control of a party that stops them from fulfilling the contractual duties that they have. The application of force majeure is based on the circumstances, the terms of the contract, and the UAE law that is applicable.
Q2. What Do You Mean By Construction Force Majeure?
It refers to external events that are extraordinary in nature and stop or materially interrupt contractual construction duties. Whether a specific delay can be considered qualified is based on the contract that you have & legal framework that is applicable.
Q3. What Proof Can Be Useful to Claim Force Majeure?
Companies should keep paperwork that shows the event, the timing of it, its impact on performance, and the various response steps that are taken. Contractual notices & communications that took place with customers or suppliers that are affected might also be necessary.
Q4. Can a Claim for Breach of Contract Be Prevented by Force Majeure?
It might, based on the circumstances, contractual terms, and the United Arab Emirates law that is applicable. Usually, the party is required to establish that an event (that qualifies) stopped contractual performance & resulted in non-performance. As the result is dependent on the exact facts as well as the agreement, you may need legal advice before you rely on force majeure.
Penafian: The information provided in this article is for general purposes only and shouldn’t be perceived as legal advice. Remember, the result of a specific contractual dispute is based on the wording used in the agreement & the facts that are involved.
