Civil Law and UAE Relational Theory of Legal Rights and Duties

1. Introduction

Relational theory of legal rights and duties views a legal right not merely as an abstract entitlement belonging to one person, but as a relationship between legally identifiable persons.

In simple terms:

A's right normally corresponds to B's legal duty.

For example:

A creditor's right to payment corresponds to the debtor's duty to pay.

A buyer's right to conforming performance corresponds to the seller's duty to perform.

A person's right to compensation corresponds to the responsible person's civil obligation to repair legally recognized harm.

A principal's rights may correspond to an agent's duties.

A beneficiary's rights may correspond to duties owed by a trustee or other fiduciary.

UAE civil law is particularly suitable for relational analysis because obligations are structured around contracts, harmful acts, agency, unjust enrichment, property relations, good faith, causation and statutory duties.

The current Federal Decree-Law No. 25 of 2025 promulgating the Civil Transactions Law entered into force on 1 June 2026. Its Article 120 expressly provides that contracts are governed primarily by the consent and commitments of the contracting parties, while interpretation must take account of intentions, circumstances, custom, justice and good faith. (UAE Legislation)

2. Meaning of a Relational Legal Right

A relational right can be represented as:

Right-holder → Legal relationship → Duty-bearer

For example:

Creditor → Contract → Debtor

The creditor does not simply possess an abstract "right to money."

The creditor has a right against a particular debtor, arising from a particular legal relationship.

Example

If A lends AED 100,000 to B:

A = right-holder;

B = duty-bearer;

loan = legal relationship;

repayment obligation = duty;

repayment claim = corresponding right.

Thus:

Right and duty are two sides of the same legal relationship.

3. Relational Theory in UAE Civil Law

UAE civil law does not use "relational theory" as a single codified doctrine.

Rather, the theory emerges from several areas of law:

contractual obligations;

tort/harmful-act liability;

agency;

unjust enrichment;

property relationships;

guarantees;

fiduciary relationships;

good-faith obligations;

statutory duties; and

remedies.

Therefore, relational theory is best understood as a method of analysing UAE civil-law relationships, rather than as an independent statutory cause of action.

4. Rights and Duties in Contract

Contract is the clearest example.

The current Civil Transactions Law provides that the governing principle of a contract is the consent of the contracting parties and what they have committed themselves to in the contract. It also requires interpretation in accordance with justice and good faith and requires obligations to be understood in their surrounding factual circumstances. (UAE Legislation)

This produces a relational structure:

The same contract therefore creates interdependent rights and duties.

5. Case 1 — Access Group DWC LLC & Proex Partners Ltd v BLS International FZE [2023] DIFC CFI 091

This is an important UAE-law authority concerning the relational character of contractual obligations.

The Court considered the former UAE Civil Code provisions on:

good faith;

contractual performance;

abuse of rights; and

contractual interpretation.

The judgment referred to former Article 246, which required contracts to be performed according to their contents and consistently with good faith. It also recognized that contractual obligations can include matters arising from law, custom and the nature of the transaction. (DIFC Courts)

The Court also discussed the requirement to avoid unfairly disadvantaging a counterparty and to protect legitimate interests.

Principle

A contractual right is not always exercised in isolation.

Its exercise occurs within the relationship created by the contract.

Relational significance

The case illustrates:

Contractual Right + Counterparty's Legitimate Interest + Good-Faith Performance = Relational Exercise of Rights

Importantly, the Court also held that the former Article 246 good-faith obligation applied to contractual performance, not automatically to pre-contractual negotiations. (DIFC Courts)

That distinction shows that the existence and scope of a relational duty depend upon the legal relationship actually established.

6. Case 2 — Bank of Singapore Ltd v Marj Holding Ltd & Mohammed Ahmad Ramadhan Juma [2022] DIFC CFI 090

This case concerned a banking relationship and alleged duties governing the exercise of contractual discretion.

The defendants argued that the bank had implied duties to exercise contractual powers:

honestly;

genuinely;

in good faith;

without arbitrariness;

without capriciousness; and

for legitimate commercial purposes.

The Court considered whether such duties could properly be implied into the detailed facility agreement. It ultimately rejected the proposed broad implied duties on the evidence and contractual terms before it. (DIFC Courts)

Principle

A relational approach does not mean that every relationship automatically creates unlimited duties.

The duty must have a proper legal foundation.

Important lesson

Relationality creates context, not unlimited judicial discretion.

The existence of a bank-customer relationship does not automatically mean that every contractual discretion must be exercised according to every possible conception of fairness.

The particular contract and applicable law determine the scope of the parties' rights and duties.

7. Case 3 — Khaled Salem Musabeh Humad Al Mheiri v John Cameron [2025] DIFC CA 008

The 2026 Court of Appeal judgment concerned an indemnity agreement governed by UAE law and issues concerning:

misrepresentation;

agency;

apparent/ostensible authority;

good faith; and

the relationship between principal, agent and third party.

The Court explained the relevant UAE-law principles concerning apparent authority. It identified conditions including that the agent acts in the principal's name, the third party deals with the agent in good faith, and the principal creates an appearance reasonably leading the third party to believe that authority exists. (DIFC Courts)

Principle

Legal rights and duties can extend beyond the immediate contracting parties because the law recognizes relational effects involving agents and third parties.

Relational structure

Principal → Agent → Third Party

The third party's reasonable reliance can become legally relevant to determining the principal's responsibility.

Importance

This demonstrates that UAE civil law does not view contractual relationships as isolated bilateral arrangements in every circumstance.

8. Case 4 — BAM Higgs & Hill LLC v Affan Innovative Structures LLC [2021] DIFC CFI 106

This case addressed UAE civil-law principles governing liability for breach, damage and causation.

The Court considered the traditional UAE civil-law requirement that liability requires the relevant combination of:

breach/wrongful conduct;

damage; and

causal connection.

Principle

A legal duty becomes a civil liability only when the legally relevant conditions for liability are established.

Relational significance

The structure is:

Claimant's Right → Defendant's Duty → Breach → Damage → Remedy

Therefore, civil liability is fundamentally relational.

There is no meaningful civil claim without identifying:

Who owed the duty to whom?

9. Case 5 — Larmag Holding B.V. v First Abu Dhabi Bank PJSC [2019] DIFC CFI 054

The Court considered UAE civil-law principles concerning harmful acts, causation, unjust enrichment and compensation.

The case illustrates the distinction between:

a person's legal entitlement;

another person's corresponding obligation; and

the factual connection necessary to impose liability.

Principle

A person does not become liable simply because another person has suffered a loss.

The claimant must establish the legal relationship or legal rule connecting the defendant's conduct to the loss.

Relational formula

Claimant's Loss + Defendant's Legally Relevant Conduct + Causation = Potential Civil Liability

This is central to relational analysis.

10. Case 6 — Damac Park Towers Co Ltd v Youssef Issa Ward [2015] DIFC CA 006

This case dealt with unjust enrichment.

The Court considered whether one party's enrichment could justify restitution by another party.

The case emphasized that benefit alone is insufficient; the enrichment must be legally unjustified in the relevant circumstances.

Principle

Relational rights can arise even where there is no conventional contract, but the law must provide the basis for the corresponding obligation.

Relational structure

Enriched Party → Restitutionary Obligation → Disadvantaged Party

This is different from a contractual relationship but still relational.

11. Case 7 — Hana Al Herz v DIFC Authority [2013] DIFC CA 004

This case concerned employment and statutory rights involving the DIFC Authority.

It illustrates how a public authority can simultaneously occupy the position of a public institution and private-law employer.

Principle

The legal character of the parties and the particular relationship determine the rights and duties arising between them.

A public body does not necessarily escape private-law obligations when acting as an employer or contractual party.

Relational significance

Authority → Employer

and

Employee → Employee's statutory/contractual rights

The relevant relationship determines the applicable obligations.

12. Case 8 — Marwan Ahmad Lutfi v DIFC Authority [2012] DIFC CFI 003

The dispute concerned employment-related rights against the DIFC Authority.

The Court considered contractual and statutory employment entitlements.

Principle

Employment rights are relational because the employer's duty corresponds to the employee's entitlement.

The existence of a statutory employment regime can supplement the contractual relationship.

Formula

Employment Contract + Mandatory Employment Law = Interlocking Rights and Duties

This is an important example of layered relationality.

13. Case 9 — Khaled Al Mheiri v John Cameron: Agency as Relational Structure

The Al Mheiri judgment is particularly useful for explaining relational theory because agency creates several interconnected legal relationships.

Consider:

Principal ↔ Agent

Agent ↔ Third Party

Principal ↔ Third Party

The law may impose consequences on the principal based on the agent's conduct where the requirements of agency or apparent authority are satisfied.

The Court emphasized that UAE law requires analysis of whether:

the agent acted in the principal's name;

the third party dealt with the agent in good faith; and

the principal created an appearance of authority that reasonably induced reliance. (DIFC Courts)

This is a classic example of relational extension of legal responsibility.

14. Right in Rem vs Relational Right

An important distinction in civil law is between rights against a person and rights relating to property.

Relational/personal right

A → B

Example:

A has a contractual claim against B.

Property right

A person may have a legally recognized right directly relating to property, potentially enforceable against persons generally according to applicable property law.

This distinction helps explain why:

Contractual rights are normally rights against identified persons, while property rights can have broader effects.

15. Relational Rights and Third Parties

The general contractual principle is that a contract creates rights and obligations for the contracting parties.

But civil law contains important exceptions and mechanisms involving third parties, such as:

agency;

assignment;

guarantees;

third-party beneficiary arrangements;

subrogation;

succession;

corporate relationships;

unjust enrichment;

tort;

apparent authority.

Thus, the relational structure may become:

A ↔ B

but the legal system can recognize:

A ↔ B ↔ C

where C acquires rights or obligations under a specific legal mechanism.

16. Good Faith as a Relational Principle

Good faith is particularly important because it regulates how one party exercises rights against another.

The current Article 120 expressly states that a contract should be interpreted in a manner achieving justice and good faith between the parties and that obligations should be interpreted according to surrounding factual circumstances. (UAE Legislation)

Thus:

Good faith converts a purely formal contractual relationship into a contextual relationship governed by legally recognized standards of conduct.

However, good faith does not authorize a court simply to rewrite a contract.

The contractual commitment remains the starting point.

17. Article 120 and Relational Interpretation

The current Article 120 is particularly relevant to relational theory.

It provides, among other things:

consent and contractual commitment are the governing principle;

intentions and meanings matter;

literal wording generally remains important;

commercial custom can form part of contractual understanding;

interpretation should achieve justice and good faith;

surrounding circumstances at the time of contracting matter;

ambiguity can be interpreted in favour of the party bearing the obligation or the weaker party in appropriate circumstances. (UAE Legislation)

This creates a balanced model:

Formal element

What did the parties agree?

Relational element

How does that agreement operate between these parties in these circumstances?

18. Rights Are Not Unlimited Powers

Relational theory also explains the UAE doctrine of abuse of rights.

Under the former Civil Code Article 106, discussed in Access Group v BLS, exercise of a right could become unlawful where, among other things:

there was intentional infringement;

the desired interest conflicted with law, public order or morals;

the benefit sought was disproportionate to harm caused to others; or

the exercise exceeded custom and practice. (DIFC Courts)

The exact article numbering should not be carried forward mechanically because the 1985 Civil Code has now been repealed by the 2025 Civil Transactions Law.

The conceptual principle remains useful:

A legal right exists within a legal relationship and its exercise can be subject to mandatory legal limits.

19. Relational Theory and Causation

Causation is also relational.

The court asks:

Whose conduct caused whose legally recognized loss?

For example:

Contractor → duty to owner

Contractor's breach → owner's loss

The relational analysis identifies the legal connection.

In a multi-party construction project:

Owner ↔ Main Contractor ↔ Subcontractor ↔ Consultant

A defect does not automatically make every participant liable.

Each relationship must be separately examined.

20. Multi-Party Relational Liability

Consider a construction project:

Owner contracts with contractor.

Contractor contracts with subcontractor.

Owner separately appoints consultant.

Bank finances the project.

Insurer provides insurance.

A single defect could generate several relationships:

The court must not simply ask:

"Who was involved?"

It must ask:

"What legal relationship connected each person to the relevant duty and loss?"

21. Relational Theory and Agency

Agency is one of the clearest examples.

Basic relationship

Principal → Agent

Principal gives authority.

External relationship

Agent → Third Party

Agent acts.

Legal consequence

Under appropriate circumstances:

Principal → Third Party

The Al Mheiri case demonstrates the importance of authority, reliance and representation under UAE law. (DIFC Courts)

22. Relational Theory and Guarantees

A guarantee creates another layered structure.

Principal debt

Creditor ↔ Principal Debtor

Guarantee

Creditor ↔ Guarantor

The guarantor's obligation is connected to the principal debt but is legally distinct.

This demonstrates:

One economic obligation can generate multiple legal relationships.

23. Relational Theory and Insurance

Insurance creates:

Insured ↔ Insurer

Reinsurance creates:

Insurer ↔ Reinsurer

Subrogation may create:

Insurer ↔ Tortfeasor

Therefore:

One loss → Multiple legal relationships

But each relationship must be independently established.

This is why an insured generally cannot automatically treat a reinsurer as though it were the primary insurer.

24. Relational Theory and Unjust Enrichment

Unjust enrichment is another important example.

Suppose:

A mistakenly pays B AED 100,000.

There may be no negotiated contract governing repayment.

Nevertheless, the law may recognize:

B's unjust enrichment → A's restitutionary claim

The legal relationship is created by the operation of law rather than agreement.

This distinguishes:

Contractual relationality

Agreement creates obligation

from:

Restitutionary relationality

Unjust enrichment creates restitutionary obligation

25. Relational Theory and Tort

Tort or harmful-act liability is also relational.

The basic structure is:

Victim → Protected legal interest

and

Responsible person → Duty not to cause legally recognized harm

When that duty is violated and causation/damage are established:

Victim → Compensation claim against responsible person

The relationship is therefore created by law rather than by consent.

26. Relational Theory and Public Authorities

A government or public authority may have different relational positions.

For example, it may act as:

regulator;

licensing authority;

employer;

contracting party;

property owner;

infrastructure operator.

The legal consequences differ according to the particular relationship.

A regulatory relationship does not automatically become a contractual relationship.

Similarly:

Government ownership does not automatically make every private contractual relationship a public-law relationship.

27. Relational Theory and Corporate Personality

A company is a separate legal person.

Therefore:

Shareholder ↔ Company

is different from:

Company ↔ Customer

and:

Company ↔ Employee

and:

Company ↔ Supplier

The shareholder's economic interest does not automatically create a direct duty to the company's creditor.

This is another example of the relational nature of civil rights.

28. Relational Theory and Good Faith in Banking

Bank of Singapore v Marj Holding demonstrates the limits of relational reasoning.

The defendants argued that the bank's contractual powers should be subject to broad duties of good faith and rationality.

The Court rejected the proposed implied terms because the contract did not require them and the necessary legal test for implication was not satisfied. (DIFC Courts)

Therefore:

Relational theory does not mean that every relationship creates an unlimited duty of fairness.

The relationship must be legally characterized first.

29. Relational Theory and Pre-Contractual Conduct

The Access Group decision provides another important boundary.

The Court explained that the former Article 246 duty of good faith concerned contractual performance and did not automatically impose the same duty during pre-contractual negotiations. (DIFC Courts)

Therefore:

Negotiation stage

Relationship may be limited.

Contract formation

Legal obligations become stronger.

Performance stage

Contractual rights and duties operate fully.

Post-breach stage

Remedial relationships arise.

This demonstrates that relational duties can change over time.

30. Temporal Relationality

Legal relationships can therefore be divided into stages:

Pre-contract

↓

Contract formation

↓

Performance

↓

Breach

↓

Remedy

↓

Enforcement

Different rights and duties may arise at each stage.

For example:

negotiation may involve limited duties;

contract formation creates contractual rights;

performance creates reciprocal obligations;

breach creates remedial rights;

judgment creates enforcement rights.

31. Relational Theory and Remedies

A remedy corresponds to a legally recognized right.

Thus:

Remedies are mechanisms for enforcing relational rights.

32. Relational Rights and Mandatory Law

Parties can create many contractual rights, but not unlimited ones.

The current Civil Transactions Law recognizes the importance of party consent while operating within mandatory legal rules and public-order constraints.

The Al Mheiri judgment similarly emphasized that contractual provisions cannot override mandatory legal provisions, public order or morals in circumstances covered by the relevant UAE-law rules. (DIFC Courts)

Therefore:

Party Autonomy

is balanced by:

Mandatory Law + Public Order + Good Faith + Protection of Legally Recognized Interests

33. Relational Theory and Weaker Parties

The current Article 120 expressly provides that ambiguity or inconsistency may be construed in favour of the party bearing the obligation or the weaker party to a contract, particularly within the statutory interpretation framework for contracts. (UAE Legislation)

This demonstrates a relational approach because the law considers not only:

"What words appear in the contract?"

but also:

"What is the relative legal position of the parties?"

This is especially important in:

adhesion contracts;

consumer transactions;

employment;

insurance;

banking;

standard-form agreements.

34. Relational Theory and Regulatory Duties

A regulatory duty may be:

Public-facing

Duty owed to the regulator/public generally.

Person-specific

Duty designed to protect a defined class.

Contractual

Regulatory requirements incorporated into the parties' contractual relationship.

Hybrid

A regulatory standard influences a private-law duty.

The court must determine which type exists.

This prevents the assumption that:

Every regulatory rule automatically creates a private right to damages.

35. Six Core Relational Models in UAE Civil Law

Model 1 — Contractual

Creditor ↔ Debtor

Model 2 — Tortious

Victim ↔ Responsible Person

Model 3 — Restitutionary

Enriched Person ↔ Disadvantaged Person

Model 4 — Agency

Principal ↔ Agent ↔ Third Party

Model 5 — Guarantee

Creditor ↔ Debtor ↔ Guarantor

Model 6 — Insurance

Insured ↔ Insurer ↔ Reinsurer

These models demonstrate that UAE civil law is fundamentally structured around legally recognized relationships.

36. Case-Law Summary

37. Judicial Test for Relational Rights

When analyzing a UAE civil-law dispute, the following sequence is useful:

Step 1 — Identify the parties

Who is claiming against whom?

Step 2 — Identify the relationship

Is it:

contractual;

tortious;

proprietary;

agency;

employment;

insurance;

guarantee;

restitutionary;

statutory?

Step 3 — Identify the right

What exactly does the claimant possess?

Step 4 — Identify the corresponding duty

Who must do or refrain from doing something?

Step 5 — Identify the legal source

Does the duty arise from:

agreement;

statute;

harmful act;

custom;

agency;

property law;

restitution?

Step 6 — Determine breach

Was the duty violated?

Step 7 — Determine causation and loss

Did the breach produce legally compensable harm?

Step 8 — Determine remedy

What remedy corresponds to the right?

38. Important Distinctions

Right vs Power

A right gives a person a legally protected entitlement.

A power allows a person to alter legal relations in specified circumstances.

Right vs Privilege

A privilege may mean that a person is legally free to act without owing a corresponding duty not to do so.

Duty vs Liability

A duty exists before breach.

Liability is the legal consequence that may arise when the duty is breached.

Contractual Duty vs Regulatory Duty

Contractual duty arises from the private relationship.

Regulatory duty arises from legislation/regulation.

They may overlap but should not automatically be treated as identical.

39. Relational Theory and the Current UAE Civil Transactions Law

The new Civil Transactions Law makes relational analysis particularly useful.

Article 120 combines:

Party Consent

with:

Intention

Custom

Surrounding Circumstances

Justice

Good Faith

This does not eliminate contractual certainty.

Instead, it recognizes that contractual meaning operates between particular parties in particular circumstances. (UAE Legislation)

40. Practical Example

Suppose:

Company A hires Company B to construct a building.

Company B hires Company C as subcontractor.

Company A hires Consultant D.

A defect appears.

A relational analysis asks:

A vs B

What contractual duty did B owe A?

B vs C

What contractual duty did C owe B?

A vs D

What professional duty did D owe A?

C vs A

Does C have a direct legal relationship with A?

Third-party purchaser vs A/B/C/D

Does the purchaser have a statutory or tortious claim?

The same defect can therefore produce different rights and duties depending on the relationship between the particular parties.

41. Core Formula

Relational Legal Right

Right-holder + Duty-bearer + Legal Relationship + Legal Source = Relational Right

Civil Liability

Duty + Breach + Causation + Damage = Liability

Contractual Relationality

Consent + Commitment + Good Faith + Context = Contractual Relationship

Multi-Party Relationality

Multiple Parties + Multiple Legal Relationships + Different Duties = Layered Civil Liability

42. Conclusion

The relational theory of legal rights and duties provides a useful framework for understanding UAE civil law because UAE private law is fundamentally concerned with determining who owes what to whom, on what legal basis, and with what consequences.

The current Civil Transactions Law reinforces this approach by placing contractual consent and commitment at the center while requiring interpretation to take account of intention, custom, surrounding circumstances, justice and good faith. (UAE Legislation)

The cases demonstrate different forms of relationality:

Access Group v BLS — contractual rights and good-faith performance;

Bank of Singapore v Marj Holding — limits of implied relational duties;

Al Mheiri v Cameron — principal-agent-third-party relationships;

BAM Higgs & Hill — duty, breach, damage and causation;

Larmag v FAB — causal connection between conduct and loss;

Damac Park Towers v Ward — restitutionary relationships;

Hana Al Herz — public authority as private-law employer;

Marwan Lutfi — contractual and statutory employment relationships.

The central examination principle is:

UAE Civil Law is relational because a legal right is normally meaningful only in relation to a corresponding duty, and the content of that right or duty depends upon the legal relationship from which it arises.

Quick Revision Formula

Relational Theory = Right + Corresponding Duty + Identified Parties + Legal Relationship + Legal Source + Remedy

And for civil liability:

Claimant's Right → Defendant's Duty → Breach → Causation → Damage → Remedy

The most important limitation is equally clear:

Not every relationship creates every conceivable duty. The duty must be grounded in contract, legislation, harmful-act liability, agency, property law, restitution, or another recognized source of UAE law.