Civil Law and UAE: Pandemic-Era Contract Adaptation Doctrines

1. Introduction

Pandemic-era contract adaptation doctrines concern the legal mechanisms used to deal with contracts whose performance became difficult, delayed, more expensive, or temporarily impossible because of extraordinary events such as the COVID-19 pandemic.

In the UAE, the pandemic raised questions concerning:

• force majeure;
• exceptional circumstances;
• hardship;
• impossibility of performance;
• partial performance;
• contractual renegotiation;
• suspension of obligations;
• termination;
• reduction of damages;
• mitigation of loss;
• good faith;
• government restrictions;
• rent and lease obligations;
• construction delays;
• supply-chain disruption.

The UAE civil-law tradition is particularly relevant because its contractual framework recognises mechanisms through which courts may respond to unforeseeable extraordinary circumstances rather than treating every contract as completely rigid.

Important current-law note: Many COVID-era UAE cases were decided under Federal Law No. 5 of 1985 (the former Civil Transactions Law). The UAE's new Civil Transactions framework, Federal Decree-Law No. 25 of 2025, entered into force on 1 June 2026. Accordingly, older cases should be used for their reasoning and historical application, while the exact statutory provision applicable to a dispute arising after 1 June 2026 must be checked against the new law.

2. Meaning of Contract Adaptation

Contract adaptation means adjusting the legal consequences of a contract when extraordinary circumstances fundamentally affect the assumptions on which the contract was performed.

Adaptation may involve:

• extending time;
• suspending performance;
• reducing an obligation;
• modifying payment consequences;
• reallocating certain risks;
• allowing performance to occur later;
• terminating the contract where continuation is legally impossible.

The central objective is generally:

To determine whether the original contractual allocation of risk should continue to operate in extraordinary circumstances.

3. Why COVID-19 Created Contractual Problems

The pandemic affected contracts through several different mechanisms.

Government restrictions

Examples:

• lockdowns;
• closure of businesses;
• travel restrictions;
• restrictions on construction activity;
• quarantine requirements.

Supply-chain disruption

Businesses could not obtain:

• raw materials;
• equipment;
• spare parts;
• components.

Labour disruption

Workers could not travel or work normally.

Financial disruption

Businesses experienced:

• falling revenues;
• liquidity problems;
• increased costs.

Transport disruption

International shipping and aviation were affected.

Demand changes

Certain businesses experienced sudden declines in demand.

These circumstances do not automatically produce the same legal consequence.

4. Force Majeure

Force majeure generally refers to an extraordinary event beyond the relevant party's control that prevents contractual performance, subject to the applicable legal and contractual requirements.

A typical force-majeure analysis asks:

1. Did an extraordinary event occur?
2. Was it beyond the party's control?
3. Was it unforeseeable or otherwise covered by the contract?
4. Did it actually prevent performance?
5. Could the party reasonably overcome the consequences?
6. Was the contractual notice requirement satisfied?
7. Did the event cause the claimed loss?

5. Pandemic Does Not Automatically Equal Force Majeure

This is one of the most important principles.

The existence of COVID-19 does not automatically excuse contractual performance.

The court must examine the particular contract.

For example:

Contract A

Import of goods into a country whose borders were completely closed.

The pandemic may potentially prevent performance.

Contract B

Payment of money under an ordinary loan.

The pandemic may make payment more difficult but does not necessarily make payment impossible.

Therefore:

The legal effect depends upon the relationship between the pandemic event and the specific contractual obligation.

6. Impossibility of Performance

Impossibility is stronger than inconvenience.

Physical impossibility

Example:

A government order legally prevents a particular event from occurring.

Legal impossibility

Example:

Performance would violate a mandatory government restriction.

Practical difficulty

Example:

Performance becomes much more expensive.

Practical difficulty does not necessarily amount to legal impossibility.

7. Hardship and Exceptional Circumstances

Hardship differs from force majeure.

Force majeure

Performance becomes impossible or legally prevented.

Hardship

Performance remains possible but becomes exceptionally burdensome because extraordinary circumstances fundamentally alter the economic balance.

For example:

Original cost:

AED 1 million

Pandemic-related disruption:

AED 4 million

Performance may still be technically possible.

The question becomes whether the applicable law permits judicial adaptation of the contract.

8. UAE Exceptional-Circumstances Doctrine

Under the former UAE Civil Transactions Law, the exceptional-circumstances doctrine was principally associated with Article 249.

Its basic idea was that where:

• exceptional and unforeseeable circumstances arise;
• performance does not become impossible;
• but performance becomes excessively burdensome;
• and threatens the obligor with exceptional loss,

the judge may, after balancing the interests of the parties, restore the obligation to a reasonable level.

This is different from simply cancelling the contract.

9. Force Majeure vs Exceptional Circumstances

10. Judicial Contract Adaptation

The concept of adaptation means that the court may, where the applicable legal requirements are satisfied, adjust the consequences of the contract instead of simply choosing between:

perform completely or terminate completely.

Possible responses may include:

• extension of time;
• temporary suspension;
• reduction of an obligation;
• redistribution of loss;
• postponement;
• adjustment of performance.

The exact remedy depends upon the governing law and circumstances.

11. Good Faith

Good faith is important in pandemic disputes.

A party should not necessarily use a pandemic as a pretext to escape an obligation that remains reasonably performable.

Similarly, a creditor may need to consider whether insisting on immediate performance in extraordinary circumstances is consistent with applicable legal requirements.

The court may examine the conduct of both parties, not simply the existence of the pandemic.

12. Causation

A claimant must connect the pandemic event to the failure of performance.

The sequence should be:

Pandemic event

↓

Government restriction / supply disruption

↓

Contractual obstacle

↓

Failure or delay

↓

Damage

If the loss would have occurred even without COVID-19, the pandemic may not legally explain the loss.

13. Foreseeability

Foreseeability is important in determining whether a party can invoke extraordinary-circumstances doctrines.

The COVID-19 pandemic was extraordinary when it emerged.

However, contracts entered into after the pandemic and after its effects became known raise different questions.

A party contracting later may find it more difficult to argue that pandemic-related disruption was unforeseeable.

Therefore:

The date of the contract matters.

14. Contractual Force-Majeure Clause

Many commercial contracts contain express force-majeure provisions.

A clause may specify:

• epidemic;
• pandemic;
• government restrictions;
• quarantine;
• transportation interruption;
• supply-chain disruption;
• natural disasters.

The court will first examine the contractual language.

A pandemic clause may therefore allocate risk differently from the general statutory rules.

15. Broad vs Narrow Force-Majeure Clauses

Broad clause

“Any event beyond reasonable control.”

This may require interpretation.

Specific clause

“Epidemic, pandemic, quarantine, government shutdown or travel restriction.”

This provides clearer contractual allocation.

However, even a listed event does not necessarily establish that the clause applies.

The party may still need to prove:

event + contractual coverage + causation + required notice + inability/impact.

16. Notice Requirements

Many contracts require the affected party to notify the other party within a specified period.

For example:

Notice must be given within 10 days after the force-majeure event.

Failure to comply may affect the ability to rely upon the contractual clause, depending on its wording and applicable law.

Therefore, pandemic claims should examine:

• notice date;
• content;
• supporting documents;
• mitigation efforts.

17. Duty to Mitigate

A party invoking COVID-related disruption should normally consider reasonable steps to reduce its losses.

Examples:

• alternative suppliers;
• substitute transport;
• remote performance;
• temporary relocation;
• alternative materials;
• renegotiation;
• partial performance.

The existence of a pandemic does not necessarily eliminate the need to mitigate.

18. Pandemic-Era Rent Disputes

Commercial leases generated substantial UAE disputes.

Examples:

• retail shops closed by government measures;
• hotels suffered travel restrictions;
• offices became temporarily unusable;
• restaurants faced capacity restrictions.

The legal analysis could involve:

• force majeure;
• hardship;
• lease provisions;
• government orders;
• actual use of premises;
• contractual risk allocation.

A tenant's reduced revenue does not automatically mean rent disappears.

19. Construction Contracts

COVID-19 particularly affected construction.

Potential consequences included:

• worker shortages;
• border closures;
• material shortages;
• delayed deliveries;
• site restrictions;
• government shutdowns.

The contractor may seek:

• extension of time;
• additional costs;
• relief from liquidated damages.

But the contractor generally needs to establish the contractual and legal basis for the claim.

20. Supply Contracts

Consider:

UAE manufacturer agrees to receive machinery from Italy in April 2020.

Italian factory closes.

Shipping is suspended.

The UAE buyer suffers losses.

The legal questions include:

• Was delivery impossible?
• Was the factory closure covered by force majeure?
• Was alternative supply available?
• Was the event foreseeable when the contract was signed?
• Did the supplier give notice?
• Could partial delivery occur?

21. Financial Obligations

A particularly important distinction concerns payment obligations.

A debtor may argue:

“COVID-19 reduced my business revenue, therefore I cannot pay.”

But inability to pay is not automatically equivalent to legal impossibility.

The court may distinguish between:

• actual legal impossibility;
• temporary liquidity difficulty;
• economic hardship;
• contractual risk.

This distinction is critical in loan and financing disputes.

22. Pandemic and International Contracts

International contracts may involve:

• UAE law;
• foreign law;
• Incoterms;
• international carriage rules;
• arbitration;
• international conventions.

Therefore, the question “Was COVID-19 force majeure?” cannot be answered without examining the governing legal framework.

23. Six Important UAE Case-Law Authorities

Because pandemic-specific UAE reported case law is comparatively limited and many COVID-era disputes were resolved through individual factual orders, it is safer to use established UAE force-majeure, exceptional-circumstances and contractual-liability jurisprudence alongside COVID-era legal principles.

Case 1: UAE Federal Supreme Court, Appeal No. 99 of Judicial Year 16, 17 December 1995

Principle

The Federal Supreme Court considered principles concerning civil liability, harmful conduct and causation.

Relevance to pandemic contracts

COVID-related claims require a causal connection between:

extraordinary event → contractual interference → damage.

A party cannot simply point to the existence of an extraordinary event without establishing how it affected the particular obligation.

Example

A supplier claims that COVID caused a six-month delay.

The court must determine:

• whether the pandemic actually caused the delay;
• whether another cause was responsible;
• whether the supplier could have performed through an alternative route.

Case 2: UAE Federal Supreme Court, Consultation No. 167 of 21 February 2001

Principle

The Federal Supreme Court addressed the temporal application of legal rules, particularly in relation to continuing legal relationships and mandatory/public-order provisions.

Pandemic relevance

This principle is important because COVID disputes can involve:

• contracts concluded before the pandemic;
• government measures introduced during the pandemic;
• contracts amended during the pandemic;
• continuing obligations after restrictions were lifted.

The relevant legal rule must be identified according to the applicable temporal framework.

Case 3: UAE Federal Supreme Court, Appeal No. 203 of 2013, judgment of 25 March 2014

Principle

The Federal Supreme Court considered applicable law and conflict-of-laws issues.

Pandemic relevance

COVID-19 affected international transactions.

A UAE company may have contracted with:

• a Chinese supplier;
• an Italian manufacturer;
• a British distributor.

The parties may have selected foreign law.

The first question is therefore:

Which legal regime governs the force-majeure or hardship question?

Case 4: Dubai Court of Cassation, Commercial Appeal No. 941 of 2019, judgment of 24 March 2020

Principle

The Dubai Court of Cassation emphasised the importance of proper legal characterization of the parties' relationship and claims.

Pandemic relevance

A COVID dispute may be presented as:

• force majeure;
• breach of contract;
• delay;
• hardship;
• termination;
• damages.

The court must determine the actual legal character of the claim rather than relying merely on the terminology used by a party.

Case 5: UAE Federal Supreme Court, Appeal No. 250 of 2012

Principle

The Federal Supreme Court addressed the importance of correct legal classification and the resulting procedural consequences.

Pandemic relevance

The case illustrates a broader methodological principle:

The remedy depends upon the legal nature of the claim.

A party seeking pandemic relief must identify whether it seeks:

• contractual enforcement;
• suspension;
• termination;
• damages;
• adaptation;
• restitution.

Case 6: UAE Federal Supreme Court decision concerning compensation and loss of opportunity, 15 November 2021

Principle

The Federal Supreme Court considered the nature and proof of damage, including issues surrounding loss of opportunity.

Pandemic relevance

Businesses frequently claimed losses such as:

• lost profits;
• cancelled contracts;
• lost business opportunities;
• reduced turnover.

The claimant must establish a legally compensable loss rather than rely upon speculative projections.

24. Comparative Case: Al Tamimi & Company / COVID-19 UAE Contract Disputes

During the pandemic, UAE practitioners and courts dealt with numerous disputes concerning leases, construction and commercial contracts.

However, because many UAE pandemic disputes did not generate widely reported appellate judgments, it is important not to manufacture a “COVID case law” list by assigning unverified case numbers to individual disputes.

The established UAE cases above therefore remain useful for explaining the legal principles that courts apply to pandemic-related claims.

25. Case-Law Summary

26. Important Distinction: Force Majeure vs Hardship

This distinction should be remembered for examinations.

Force majeure

“I cannot perform.”

Hardship / exceptional circumstances

“I can perform, but circumstances have made performance exceptionally burdensome.”

Therefore:

Impossible ≠ merely expensive

and

Difficult ≠ automatically legally excused.

27. Pandemic-Era Judicial Adaptation

A court faced with a pandemic-related contract may consider several possible outcomes.

Option 1 — Enforce normally

Where the pandemic did not materially interfere with performance.

Option 2 — Allow additional time

Where delay was genuinely caused by the extraordinary event.

Option 3 — Suspend performance

Where performance is temporarily impossible.

Option 4 — Adapt the obligation

Where the exceptional-circumstances doctrine applies.

Option 5 — Terminate

Where continued performance is legally impossible or the applicable contractual/statutory requirements are satisfied.

Option 6 — Award damages

Where breach and legally compensable loss are established.

28. Contract Adaptation Example

Suppose:

• Contract price = AED 10 million.
• Completion period = 12 months.
• COVID restrictions prevent work for 4 months.
• The contractor can complete the project later.

If the legal and contractual requirements are satisfied, the appropriate response might involve:

12 months → 16 months

rather than:

Contract → automatically terminated.

This demonstrates the idea of adaptation.

29. Another Example: Extreme Cost Increase

Suppose a supplier agrees to deliver machinery for:

AED 5 million

Pandemic-related disruption increases procurement costs to:

AED 12 million.

Performance is still technically possible.

The issue is therefore different from physical impossibility.

The court may need to consider:

• contract terms;
• allocation of price risk;
• hardship doctrine;
• foreseeability;
• industry conditions;
• alternative suppliers;
• mitigation.

30. Pandemic and Commercial Lease Example

A shopping-centre tenant pays:

AED 1 million annual rent.

Government restrictions prevent the tenant from operating for several months.

Possible questions:

1. Was the premises legally unusable?
2. Did the lease allocate closure risk?
3. Was the closure temporary?
4. Could the tenant use the premises for another lawful purpose?
5. Did the landlord have obligations concerning access?
6. Does the applicable law permit adjustment?
7. What loss did each party actually suffer?

The answer cannot be based merely on the words “COVID-19.”

31. Pandemic and Construction Example

A contractor claims:

“COVID delayed completion by six months.”

The employer responds:

“The project was already three months behind schedule before COVID.”

The court must separate:

pre-existing delay

from

pandemic-caused delay.

This is a classic causation and concurrency problem.

32. Concurrent Causes

A pandemic may be only one of several causes of non-performance.

For example:

1. Contractor's poor planning — 2 months.
2. Material shortage — 1 month.
3. Government restrictions — 3 months.
4. Labour shortage — 2 months.

The legal analysis must determine which causes are attributable to which party and what the contract says about concurrent delay.

33. Pandemic and Damages

A successful force-majeure claim does not necessarily mean that every financial loss is recoverable.

A claimant may need to establish:

• actual loss;
• causation;
• foreseeability where relevant;
• mitigation;
• contractual limitations.

Examples of claimed losses:

• lost profit;
• additional storage;
• additional transport;
• labour costs;
• financing costs;
• cancellation expenses.

34. Pandemic and Renegotiation

Commercial parties often renegotiate contracts during extraordinary circumstances.

A renegotiation agreement may:

• extend deadlines;
• reduce payments;
• defer instalments;
• change delivery schedules;
• alter quantities.

Once parties expressly modify their agreement, the legal analysis may shift from:

original contract

to

original contract + valid amendment.

Therefore, written pandemic-era amendments are highly important.

35. Pandemic and Good Faith Renegotiation

A party should not assume that merely requesting renegotiation automatically suspends its contractual obligations.

Unless legally justified or contractually agreed, the original obligation may continue.

Therefore:

Negotiation is not the same as legal suspension.

36. Force Majeure and Notice

A practical pandemic claim should document:

• date of government restriction;
• affected activity;
• contractual provision;
• notice to counterparty;
• evidence of inability;
• mitigation measures;
• expected duration;
• actual financial impact.

Good documentation can be decisive.

37. Pandemic-Era Contract Drafting Lessons

Modern UAE contracts should expressly address:

1. Pandemic and epidemic

State whether they constitute force majeure.

2. Government restrictions

Include:

• lockdown;
• quarantine;
• border closure;
• import restrictions.

3. Supply-chain disruption

Define whether extraordinary supply disruption is covered.

4. Cost increases

Specify whether price escalation creates relief.

5. Notification

Set clear notice requirements.

6. Mitigation

Specify reasonable mitigation obligations.

7. Long-term disruption

Provide a termination mechanism.

8. Renegotiation

Provide a procedure for temporary adaptation.

38. Pandemic-Era Contract Adaptation and Digital Commerce

The pandemic accelerated:

• electronic contracting;
• remote performance;
• online meetings;
• electronic signatures;
• digital payments;
• remote dispute resolution.

Consequently, a party claiming that physical performance was impossible may need to demonstrate why digital or alternative performance was not reasonably available.

39. UAE Pandemic Doctrine: Analytical Formula

A useful examination formula is:

Extraordinary Event + Unforeseeability + Contractual Impact + Causation + No Reasonable Alternative + Mitigation + Applicable Legal Doctrine = Possible Contractual Relief

For hardship:

Extraordinary Event + Unforeseeability + Exceptional Burden + Threat of Serious Loss + Balancing of Interests = Possible Judicial Adaptation

40. Key Principles for Examination

1. COVID-19 is not automatically force majeure.
2. The actual contractual obligation must be examined.
3. Impossibility is different from economic difficulty.
4. Hardship is different from force majeure.
5. Article 249 of the former Civil Transactions Law was particularly important for exceptional circumstances.
6. Contractual force-majeure clauses must be carefully interpreted.
7. Causation must be proved.
8. Foreseeability depends partly on when the contract was concluded.
9. Mitigation remains important.
10. Notice requirements should be observed.
11. Payment difficulty does not automatically equal impossibility.
12. The court may consider adaptation rather than automatic termination where the applicable doctrine permits it.
13. Pandemic-related losses must be legally established.
14. International contracts require conflict-of-laws analysis.
15. The current legal framework must be checked for contracts affected after 1 June 2026.

41. Short Exam Definition

Pandemic-era contract adaptation doctrines in UAE civil law refer to the legal mechanisms through which contractual obligations may be suspended, adjusted, extended, reduced or terminated when extraordinary and unforeseeable circumstances such as COVID-19 materially affect performance. The principal concepts include force majeure, impossibility, exceptional circumstances, hardship, good faith, causation, mitigation and contractual risk allocation.

42. Conclusion

The UAE approach to pandemic-era contracts is based on a fundamental distinction:

A contract becoming difficult is not the same as a contract becoming impossible.

Where performance becomes impossible because of an extraordinary event, force majeure may become relevant.

Where performance remains possible but becomes exceptionally burdensome, the exceptional-circumstances/hardship framework may become relevant where its legal requirements are satisfied.

The court must examine:

Contract → Extraordinary event → Foreseeability → Actual impact → Causation → Mitigation → Risk allocation → Applicable law → Appropriate remedy.

The COVID-19 experience also demonstrates an important lesson for modern UAE commercial drafting: contracts should expressly address pandemics, government restrictions, supply-chain disruption, price escalation, notice, mitigation, renegotiation, suspension and termination.

Finally, because the UAE's new Civil Transactions framework became effective on 1 June 2026, pandemic-era authorities decided under the former 1985 Civil Transactions Law should be treated principally as guidance on judicial reasoning and historical doctrine, rather than automatically assuming that every former statutory article remains the governing provision for a present-day dispute.