Civil Law And UAE Force Majeure Exemption Rules

1. Meaning of Force Majeure

Force majeure means an extraordinary external event that is beyond the reasonable control of a contracting party and prevents that party from performing its contractual obligation.

In UAE civil law, force majeure is important because it can operate as an exemption from contractual liability where the legal requirements are satisfied.

Typical examples include:

natural disasters;

extraordinary floods;

earthquakes;

war;

government prohibitions;

sudden legal restrictions;

exceptional public emergencies;

certain pandemics or epidemic restrictions;

destruction of the subject matter;

events making contractual performance objectively impossible.

However:

A contract becoming more expensive, less profitable or commercially inconvenient does not automatically constitute force majeure.

The critical question is generally whether performance has become legally relevantly impossible, rather than merely difficult.

2. Current UAE Legal Position — Important 2026 Update

The UAE enacted Federal Decree by Law No. 25 of 2025 promulgating the new Civil Transactions Law.

It:

repealed Federal Law No. 5 of 1985;

entered into force on 1 June 2026;

replaced the former Civil Transactions Law as the general federal civil-law framework.

The new law places force majeure principally in Article 236.

The new framework preserves the central distinction between:

Force majeure

Performance becomes impossible.

Exceptional circumstances / hardship

Performance remains possible but becomes exceptionally onerous or disrupts the contractual equilibrium.

Secondary commentary on the new Code identifies Article 236 as the force-majeure provision and Article 224 as the general exceptional-circumstances/hardship provision.

Therefore, for an exam:

Article 236 = Force Majeure / Impossibility
Article 224 = Exceptional Circumstances / Hardship

3. Core Force Majeure Test

A force-majeure exemption generally requires examination of four principal questions:

1. Was there an external event?

The event must be outside the ordinary control of the party.

2. Was it unforeseeable?

The event must not reasonably have been anticipated at the time of contracting.

3. Was it unavoidable or irresistible?

The affected party must not reasonably have been able to prevent or overcome the event or its consequences.

4. Did it make performance impossible?

This is the most important requirement.

The event must have a sufficiently direct causal relationship with the inability to perform.

Current commentary on Article 236 identifies these requirements as continuing the fundamental approach of the former Article 273.

4. Force Majeure Is Different From Hardship

This distinction is extremely important.

The new law expressly develops mechanisms for restoring contractual balance in exceptional circumstances. The UAE Government has also highlighted new provisions concerning unforeseen circumstances affecting contractual equilibrium, including judicial adjustment or termination in appropriate cases.

Example

A supplier cannot legally export a particular product because a new government prohibition makes delivery unlawful.

Possible force majeure.

But:

The price of raw materials increases by 300%, while delivery remains physically and legally possible.

That is more naturally analysed as hardship/exceptional circumstances, not force majeure.

5. Automatic Effect of Force Majeure

Under the new Article 236 framework, where performance of an obligation in a bilateral contract becomes impossible because of force majeure, the corresponding obligation is extinguished and the contract may dissolve by operation of law.

The new Code also develops rules concerning partial and temporary impossibility, providing a more flexible framework than simply treating every disruption as total termination.

Therefore, the legal analysis should be:

Force-majeure event

↓

Impossibility

↓

Causal connection

↓

Affected obligation

↓

Total / partial / temporary impossibility

↓

Appropriate legal consequence

6. Force Majeure Does Not Automatically Excuse Every Breach

A party cannot simply state:

“A force majeure event occurred, therefore I am not liable.”

The party must establish the necessary connection between the event and its non-performance.

For example:

Flood → factory inaccessible → production impossible

is stronger than:

Flood somewhere in the region → business became less profitable → payment was not made.

The second situation may involve hardship, liquidity problems or ordinary commercial risk rather than force majeure.

7. Financial Difficulty and Force Majeure

A particularly important limitation concerns money obligations.

Difficulty in obtaining financing, loss of revenue or general financial hardship does not necessarily transform a monetary obligation into a force-majeure obligation.

This distinction is particularly clear in the DIFC system, where Article 82 of the DIFC Contract Law expressly excludes a “mere obligation to pay” from its statutory force-majeure excuse.

In The Collection Club Restaurant Ltd v MAG Development Services Ltd, the DIFC Court of Appeal confirmed that the Article 82 exclusion was significant in a case involving financial hardship following the Dubai floods.

This is a DIFC authority, not an onshore UAE precedent, but it is very useful for examination purposes when comparing UAE/DIFC approaches.

8. Contractual Force-Majeure Clauses

Force majeure can operate through:

A. Statutory force majeure

The law itself provides relief when its requirements are met.

B. Contractual force majeure

The parties expressly define:

force-majeure events;

notice requirements;

affected obligations;

suspension periods;

mitigation obligations;

termination rights;

allocation of additional costs;

extension of time;

consequences of prolonged force majeure.

A contract may therefore contain language covering:

war, terrorism, government action, natural disasters, epidemics, strikes, supply-chain interruptions or other events beyond reasonable control.

But contractual drafting cannot necessarily eliminate mandatory statutory requirements.

Current UAE construction guidance recognises that parties can define contractual force-majeure events, while the statutory framework remains relevant to the legal requirements and consequences.

9. Notice Requirement

A contractual force-majeure clause may require prompt notification.

A typical sequence is:

Event occurs

↓

Party becomes aware

↓

Notice given

↓

Nature of event identified

↓

Effect on performance explained

↓

Mitigation measures identified

↓

Updated information supplied

Failure to follow a contractual notice mechanism may affect entitlement depending upon the wording and applicable law.

Therefore:

Force majeure is not merely an event; it is also a contractual risk-management process.

10. Duty to Mitigate

A party relying on force majeure should normally be prepared to demonstrate that it took reasonable steps to reduce the consequences.

For example:

alternative suppliers;

alternative transportation;

substitute premises;

alternative personnel;

alternative performance methods;

governmental applications;

temporary arrangements.

A party cannot necessarily create or aggravate its own inability to perform and then rely on force majeure.

11. Causation

Causation is central.

The analysis should be:

Event → Interference → Impossibility → Non-performance

If the chain breaks, the force-majeure defence may fail.

Example

A storm causes a temporary transport delay.

If the contract allows delivery by several alternative routes and the seller simply chooses not to use them, the seller may have difficulty establishing true impossibility.

Therefore:

External event alone is insufficient.

12. Case Law

Case 1 — Daman Real Estate Capital Partners / Rohan v Beydoun [2012] DIFC CFI 025

This construction dispute concerned contractual completion dates and a force-majeure provision.

The contract defined force majeure broadly, including events beyond the seller's reasonable control and matters not caused by its fault or negligence.

The Court examined the interaction between construction delays and the contractual force-majeure mechanism.

Principle

Force majeure must be analysed against:

the contractual definition;

the actual cause of delay;

the contractual completion mechanism;

the parties' conduct.

Importance

A construction party cannot simply point to delay. It must establish that the relevant delay falls within the contractual force-majeure mechanism.

13. Case 2 — Ahmed Zaki Beydoun v Daman Real Estate Capital Partners [2013] DIFC CA 006

The Court of Appeal considered the force-majeure provisions concerning an apartment development and the extension of the anticipated completion date.

The contractual definition covered events beyond reasonable control and not caused by the seller's fault or negligence.

The Court considered the contractual extension mechanism and the effect of force majeure on the completion date.

Principle

A contractual force-majeure clause must be read together with the contract's:

completion-date provisions;

extension mechanisms;

termination rights.

Exam point

Force majeure may alter contractual time consequences where the contract expressly provides for such relief.

14. Case 3 — DIFC Investments LLC v Mohammed Akbar Mohammed Zia [2017] DIFC CFI 001

This case involved contracts containing DIFC force-majeure provisions.

The Court expressly considered Article 82 of the DIFC Contract Law and examined whether an event involving a bank's blocking of a transfer could constitute force majeure.

Principle

A force-majeure defence must satisfy the statutory conditions, including:

an impediment beyond control;

inability reasonably to anticipate it;

inability to avoid or overcome it;

causal connection with non-performance.

Importance

The case demonstrates that the court does not treat every unexpected event as force majeure.

15. Case 4 — Eshraq Investments PJSC v Shehab M. Gargash & Others [2021] DIFC CFI 077

The contractual force-majeure definition covered events beyond reasonable control, absence of fault or negligence, and inability to overcome the event through reasonable diligence.

The clause included events such as:

fire;

flood;

earthquake;

natural disasters;

governmental action;

strikes;

utility failures;

construction accidents.

Principle

Contractual drafting is extremely important.

An event may fall within a contractual definition only if the required conditions are satisfied.

Exam point

Force majeure depends not merely on the name of the event but on the wording and conditions of the clause.

16. Case 5 — Minni v Mithal [2021] DIFC SCT 354

This case involved a contractual force-majeure clause expressly referring to:

acts of God;

war;

government regulations;

disasters;

strikes;

civil disorder;

pandemics;

transportation restrictions;

emergencies.

The clause also specified conditions concerning geographical effect and timing.

Principle

Parties can contractually specify the events and circumstances that activate force majeure.

Importance

A pandemic or government restriction is not automatically sufficient merely because the words appear in a contract.

The contractual conditions must also be satisfied.

17. Case 6 — MAG Development Services Ltd v The Collection Club Restaurant Ltd [2026] DIFC CFI 092

This recent DIFC decision directly addressed force majeure following the Dubai floods.

The defendants relied on Article 82 of the DIFC Contract Law, arguing that the financial hardship arising from the natural disaster made performance impossible.

The Court considered the statutory exclusion relating to a mere obligation to pay.

Principle

There is an important difference between:

inability to perform a non-monetary obligation

and

inability to make a payment.

Exam point

Financial hardship is not automatically equivalent to force majeure.

18. Case 7 — The Collection Club Restaurant Ltd v MAG Development Services Ltd [2026] DIFC CA 006

The Court of Appeal addressed the same dispute.

It explained that Article 82 of the DIFC Contract Law excludes a mere obligation to pay from its force-majeure exemption.

The Court also distinguished force majeure under DIFC statutory law from the English common-law doctrine of frustration.

Principle

Do not automatically import English frustration principles into a UAE/DIFC statutory force-majeure framework.

Exam formula

DIFC Article 82 ≠ English frustration.

This is an important comparative-law point.

19. Case 8 — BAM Higgs & Hill LLC v Affan Innovative Structures LLC [2026] DIFC CFI 106

This recent construction judgment involved a subcontract governed by UAE law and extensive issues concerning delay, variations, contractual obligations and damages.

The judgment discussed former UAE Civil Code provisions concerning impossibility, causation and contractual damages, including the principle that a cause beyond the debtor's control may affect liability. It also referred to Dubai and Federal Supreme Court authorities.

Importance

The case demonstrates that in construction disputes, courts must distinguish between:

genuine external causes;

contractor default;

employer variations;

design changes;

delay;

additional cost;

causation.

Principle

Not every delay is force majeure; the precise causal source of the delay must be established.

20. Onshore UAE Judicial Principle

The BAM judgment referred to UAE authorities concerning causation and force majeure.

It quoted a Dubai Commercial Appeal decision explaining that contractual or tortious liability requires the relevant elements, including a causal connection, and that force majeure or another external cause may defeat that causal connection where legally established.

This illustrates the broader UAE civil-law approach:

Force majeure operates not simply as an excuse but as a mechanism affecting causation and attribution of liability.

21. Force Majeure in Construction Contracts

Construction disputes frequently involve:

delays;

material shortages;

labour shortages;

government restrictions;

extreme weather;

supply-chain disruption;

design changes;

access restrictions;

utility failures.

The correct analysis is:

Step 1

Identify the delaying event.

Step 2

Determine whether it falls within the contract.

Step 3

Determine whether it was beyond the contractor's control.

Step 4

Determine whether it was foreseeable.

Step 5

Determine whether it actually prevented or delayed performance.

Step 6

Determine whether alternative methods were reasonably available.

Step 7

Check notice requirements.

Step 8

Calculate the actual period affected.

Step 9

Determine whether the consequence is:

extension of time;

suspension;

additional cost;

exemption from damages;

termination;

adjustment.

22. Force Majeure and Delay Damages

Suppose:

Completion date = 1 January
Force-majeure event = 1 February
Completion = 1 April

The contractor cannot automatically claim that all delay was force majeure.

The court may ask:

Was there pre-existing delay?

Did the force-majeure event actually affect the critical path?

How long did it affect performance?

Did the contractor mitigate?

Were alternative resources available?

Thus:

Force majeure excuses only the consequences actually caused by the force-majeure event.

23. Force Majeure and Liquidated Damages

If a contract contains delay damages, the force-majeure question comes first.

The basic sequence is:

Contractual completion obligation

↓

Delay

↓

Force-majeure event?

↓

Causal connection?

↓

Excused delay?

↓

Remaining unexcused delay

↓

Possible delay damages

Therefore, a force-majeure defence can affect the period for which delay damages are recoverable.

24. Force Majeure and Payment

This requires special care.

A party may argue:

“The crisis prevented me from receiving revenue, so I could not pay.”

That does not automatically establish force majeure.

The legal question is whether the applicable law and contract treat the relevant monetary obligation as excusable.

The DIFC approach is particularly strict because Article 82 expressly excludes a mere obligation to pay. The Court of Appeal's 2026 decision in Collection Club v MAG confirms this point.

25. Force Majeure and Pandemic

A pandemic may constitute a force-majeure event depending on:

the contract;

applicable law;

timing;

government restrictions;

actual effect on performance;

foreseeability;

mitigation.

Therefore:

Pandemic ≠ automatic force majeure.

The claimant must still establish the required legal connection.

26. Force Majeure and Government Action

Government action may include:

prohibition of imports;

closure orders;

licensing restrictions;

export controls;

compulsory shutdowns;

movement restrictions;

sanctions;

regulatory prohibitions.

If government action makes lawful performance impossible, force majeure may become relevant.

But the court must still ask:

Was the government action genuinely outside the party's control, unforeseeable, unavoidable and causally connected to non-performance?

27. Force Majeure and War

War or armed conflict can potentially constitute force majeure.

However, the existence of conflict somewhere in the region does not automatically excuse every UAE contractual obligation.

The claimant should establish:

Conflict → specific contractual interference → inability to perform.

For example:

War closes the only lawful transportation route required under the contract.

This is stronger than:

War increased insurance and transportation costs.

The second situation may instead involve hardship.

28. Force Majeure and Supply-Chain Disruption

Supply-chain disruption requires careful analysis.

A contractor cannot automatically rely on:

“My supplier failed.”

The court may ask:

Was the supplier failure itself caused by force majeure?

Was the supplier reasonably replaceable?

Were alternative suppliers available?

Did the contract allocate procurement risk?

Did the party order materials early enough?

Did the party mitigate?

Thus:

Supplier default ≠ automatically force majeure.

29. Force Majeure and Third-Party Failure

A third party may cause disruption.

Examples:

subcontractor;

supplier;

shipping company;

logistics provider;

payment processor.

The party relying on force majeure must examine whether the third-party event is legally attributable to it and whether the contract expressly includes third-party failure.

This is especially important in construction contracts.

30. Total, Partial and Temporary Impossibility

A. Total impossibility

The obligation cannot be performed at all.

Possible consequence:

extinction of the affected obligation and dissolution of the contract under the statutory framework.

B. Partial impossibility

Only part of the obligation becomes impossible.

Possible consequence:

extinction or adjustment concerning the impossible portion, with the remaining contractual relationship considered separately.

C. Temporary impossibility

Performance cannot occur for a period but may later become possible.

Possible consequence:

suspension or appropriate modification rather than immediate permanent termination, depending upon the applicable statutory and contractual framework.

The new Civil Transactions Law expressly develops treatment of partial and temporary impossibility more clearly than the former framework.

31. Force Majeure vs Frustration

These concepts should not be casually treated as identical.

UAE Civil Law

Force majeure has an express statutory basis.

English Common Law

Frustration is a common-law doctrine.

DIFC

The DIFC Contract Law contains its own statutory force-majeure mechanism.

The 2026 Collection Club v MAG appellate decision specifically cautioned against treating English frustration as interchangeable with Article 82 of the DIFC Contract Law.

Exam sentence

The applicable legal system determines the doctrine; English frustration should not automatically be imported into a UAE or DIFC force-majeure analysis.

32. Force Majeure vs Hardship

This is one of the most important comparisons.

Force Majeure

“I cannot perform.”

Hardship

“I can perform, but extraordinary circumstances have made performance excessively onerous and disrupted the contractual balance.”

Under the new UAE Civil Transactions Law, Article 224 addresses exceptional circumstances, while Article 236 addresses force majeure.

33. New Rules for Construction-Contract Equilibrium

The new Civil Transactions Law introduces specific treatment of unforeseen general exceptional circumstances affecting the financial basis of works contracts.

The UAE Government describes the new framework as allowing the court, depending on the circumstances, to:

extend the performance period;

increase or decrease remuneration;

restore contractual balance;

or terminate the contract where appropriate.

This is extremely important.

It means that a contractor facing extraordinary cost increases should not automatically describe the situation as force majeure.

The correct question may instead be:

Is this impossibility, or is it exceptional hardship destroying the contractual equilibrium?

34. Burden of Proof

The party relying upon force majeure generally bears the burden of establishing the factual foundation of its defence.

It should produce evidence concerning:

occurrence of the event;

timing;

foreseeability;

contractual relevance;

actual effect;

inability to avoid the consequences;

mitigation;

notice;

duration;

resulting loss.

Useful evidence includes:

government orders;

official notices;

engineering reports;

weather records;

shipping records;

supplier correspondence;

expert reports;

photographs;

inspection reports;

financial records;

project programmes;

contemporaneous notices.

35. Evidence and Expert Testimony

Force-majeure disputes often involve technical questions.

For example:

Did a flood actually prevent construction for 60 days?

An expert may analyse:

critical path;

weather conditions;

site access;

productivity;

material availability;

alternative construction methods.

But the expert does not decide the legal question.

The proper sequence is:

Technical evidence → Expert analysis → Judicial evaluation → Legal conclusion.

36. Force Majeure and Good Faith

Contractual performance remains connected with good faith.

A party should not:

conceal the event;

deliberately worsen the consequences;

manufacture impossibility;

delay notification without reason;

misuse a force-majeure clause;

invoke force majeure when performance remains reasonably possible.

The new Civil Transactions Law also reinforces good-faith principles in contractual performance and interpretation.

37. Force-Majeure Risk Allocation

A contract should ideally specify:

38. Practical Force-Majeure Checklist

When analysing a UAE force-majeure problem, ask:

F — Force event

What exactly happened?

O — Outside control

Was it outside the party's control?

R — Reasonably unforeseeable

Could it reasonably have been anticipated?

C — Causation

Did it actually cause non-performance?

E — Execution impossible

Did performance become impossible rather than merely expensive?

M — Mitigation

Could the consequences have been avoided or reduced?

A — Agreement

What does the contract's force-majeure clause say?

J — Notice

Was contractual notice properly given?

E — Evidence

Can the event and its consequences be proved?

U — Ultimate remedy

Is the consequence suspension, adjustment, exemption, termination or damages?

R — Risk allocation

Who contractually bears the relevant risk?

E — Effect

What obligation is actually excused?

39. Case-Law Revision Table

40. Important DIFC/Onshore Distinction

The above cases include substantial DIFC authorities.

The DIFC Courts operate under their own legal framework, including the DIFC Contract Law. Therefore:

DIFC Article 82 should not be confused with onshore UAE Article 236.

The cases are particularly useful for:

contractual interpretation;

evidentiary analysis;

construction disputes;

causation;

force-majeure clauses;

comparative UAE legal research.

For an onshore UAE dispute, the court must apply the applicable onshore UAE legislation and contract, rather than automatically applying DIFC law.

41. Exam Formula

Remember:

FORCE MAJEURE

External Event

Unforeseeable

Unavoidable

No Fault

Causal Connection

Impossibility

=

Potential Force-Majeure Relief

But:

Higher Cost ≠ Automatically Force Majeure

Lower Profit ≠ Automatically Force Majeure

Financial Difficulty ≠ Automatically Force Majeure

Delay ≠ Automatically Force Majeure

Supplier Failure ≠ Automatically Force Majeure

42. One-Line Difference

Force Majeure

“Performance has become impossible.”

Hardship

“Performance remains possible, but extraordinary circumstances have seriously disrupted the contractual equilibrium.”

Ordinary Commercial Risk

“Performance is possible and the party simply bears the commercial consequences.”

43. Final Conclusion

UAE force-majeure law provides an important exemption from contractual liability when an extraordinary external event makes contractual performance legally impossible.

Under the new Civil Transactions Law effective from 1 June 2026, Article 236 provides the principal statutory framework for force majeure, while Article 224 separately addresses exceptional circumstances and hardship.

The central distinction is therefore:

Impossible performance → Force majeure

Excessively burdensome performance → Hardship / exceptional circumstances

Ordinary inconvenience or increased cost → ordinarily contractual/commercial risk

The leading DIFC authorities such as Rohan/Daman, Beydoun, DIFC Investments v Zia, Eshraq Investments, Minni, MAG Development and Collection Club v MAG demonstrate the importance of contractual wording, causation, impossibility, notice, mitigation and the distinction between monetary difficulty and genuine inability to perform.

For examination purposes, the safest formula is:

Event → Unforeseeability → Unavoidability → Impossibility → Causation → Notice → Mitigation → Remedy.

Finally, because the 1985 Civil Transactions Law was repealed on 1 June 2026, older cases should be identified as cases under the former statutory regime; they remain useful for principles and judicial reasoning, but the current statutory text must be checked under the 2025 Civil Transactions Law.