Civil Law and UAE – Revision Notes for the Civil Code

1. Introduction

The UAE Civil Code, traditionally referring to Federal Law No. 5 of 1985 Concerning the Civil Transactions Law, has been the central foundation of UAE private law for decades.

However, an important current-law point must be remembered for examinations and research:

Federal Decree by Law No. 25 of 2025 promulgated a new Civil Transactions Law, repealed Federal Law No. 5 of 1985, and brought the new law into force on 1 June 2026. (UAE Legislation)

Therefore, in 2026, students should distinguish between:

the former 1985 Civil Code — extremely important for older case law and historical doctrine; and

the current 2025 Civil Transactions Law — the primary statutory framework from 1 June 2026.

Many reported UAE cases still discuss the 1985 provisions, so those cases remain valuable for understanding established principles, but their old article numbers should not automatically be treated as the current numbering.

2. Purpose of the UAE Civil Code

The Civil Transactions Law regulates fundamental private-law relationships, including:

persons and legal capacity;

property and ownership;

obligations;

contracts;

tortious liability;

unjust enrichment;

possession;

mortgages and security interests;

sale and other nominate contracts;

lease;

agency;

construction and other transactions;

damages and compensation;

dissolution and rescission of contracts.

The Civil Code therefore operates as the general private-law framework, while specialized legislation supplements it in areas such as:

commercial companies;

labour;

bankruptcy;

consumer protection;

arbitration;

intellectual property;

electronic transactions;

data protection.

3. Basic Structure for Revision

A useful way to remember UAE civil law is:

Persons

↓

Property

↓

Obligations

↓

Contracts

↓

Performance

↓

Breach

↓

Remedies

↓

Liability and damages

This structure makes it easier to solve examination problems.

4. Sources and Principles of UAE Civil Law

The UAE civil-law system is influenced by:

Islamic Sharia principles;

legislation;

judicial interpretation;

established customs;

principles of justice and fairness;

contractual intention;

legal maxims.

The Civil Transactions Law is therefore not merely a collection of isolated rules. It contains general principles capable of application across many civil disputes.

5. Principle of Good Faith

One of the most important principles is good faith.

Under the former Civil Code Article 246:

A contract must be performed according to its contents and consistently with good faith.

It also extended contractual obligations to matters arising from:

law;

custom;

nature of the transaction.

The corresponding contractual philosophy continues to be important under the current Civil Transactions Law.

The UAE courts have treated good faith as relevant not only to literal contractual performance but also to the manner in which contractual rights are exercised.

A recent DIFC judgment applying onshore UAE law discussed Article 246 together with UAE appellate authorities and emphasized honest performance, avoidance of abusive conduct, and protection of legitimate contractual interests. (DIFC Courts)

Exam point

Good faith does not normally permit a court simply to rewrite a clear contract; rather, it regulates how contractual rights and obligations are performed and interpreted.

6. Case Law 1 – Access Group v BLS International

Access Group DWC LLC & Proex Partners Ltd v BLS International FZE [2023] DIFC CFI 091

This is a useful modern authority because the parties proceeded on the basis that onshore UAE law governed their contractual relationship.

The judgment discussed the former Civil Code provisions dealing with:

abuse of rights;

good faith;

contractual interpretation;

reciprocal obligations;

termination.

The court referred to Articles 106, 246, 247 and 257–272 of the former Civil Code. (DIFC Courts)

The judgment is particularly useful for revision because it demonstrates how UAE civil-law principles operate together rather than independently.

Principle

Contractual rights must be understood in the context of the Civil Code's rules on consent, good faith, interpretation and termination.

Important: This is a DIFC Court judgment applying onshore UAE law in the relevant dispute; it is not a Federal Supreme Court precedent.

7. Principle of Freedom of Contract

The UAE civil-law system recognizes substantial contractual freedom.

Parties may generally:

choose whether to contract;

determine contractual terms;

allocate risks;

establish payment mechanisms;

agree conditions;

provide termination mechanisms;

agree compensation clauses, subject to applicable law.

However, freedom of contract is not unlimited.

Contractual terms cannot override:

mandatory law;

public order;

morality;

applicable statutory protections.

8. Formation of Contract

A basic UAE contract analysis asks:

1. Offer

Was there a sufficiently definite proposal?

2. Acceptance

Was the proposal accepted?

3. Subject matter

Is the object sufficiently identified or identifiable?

4. Cause/legal purpose

Is the transaction legally permissible?

5. Capacity

Do the parties have legal capacity?

6. Required form

Does legislation require a particular form?

9. Case Law 2 – Michael George Forbes v Robert Kidd

Michael George Forbes v Robert Kidd [2023] DIFC CFI 081

The DIFC Court considered the requirements for a valid contract under UAE law, referring to the former Civil Transactions Law.

The judgment discussed the requirements relating to:

mutual consent;

essential contractual elements;

defined subject matter;

lawful cause;

offer and acceptance. (DIFC Courts)

Principle

A contract analysis should begin with the fundamental elements of agreement rather than jumping directly to breach and damages.

10. Consent and Intention

Consent is fundamental to contractual formation.

Under the traditional Civil Code approach, the courts examine:

actual agreement;

contractual language;

circumstances;

transaction structure;

conduct of the parties.

Where the words are clear, courts generally give effect to them.

Where ambiguity exists, the parties' common intention becomes particularly important.

11. Interpretation of Contracts

The former Civil Code contained important interpretative principles.

Article 258

The traditional rule emphasized:

Intentions and meanings rather than merely words and forms.

Article 265

Where wording is clear, departure from the clear wording through interpretation is restricted.

Where interpretation is necessary, courts may consider:

mutual intention;

nature of the transaction;

commercial circumstances;

customary dealings;

trust and confidence between parties.

These principles remain highly useful for understanding UAE contractual interpretation, although current cases should be checked against the 2025 Law.

12. Case Law 3 – Abu Dhabi Court of Cassation Judgment No. 179 of 2024

The UAE Civil Code's contractual interpretation principles were discussed in the later DIFC judgment in Access Group v BLS.

That judgment referred to Abu Dhabi Court of Cassation Judgment No. 179 of 2024 in connection with interpretation where contractual wording is unclear. (DIFC Courts)

Principle

Where interpretation is genuinely required, the court can investigate the parties' mutual intention and the nature and circumstances of the transaction rather than treating isolated words as decisive.

13. Performance of Contract

A fundamental civil-law principle is:

Pacta sunt servanda — agreements should be performed.

The traditional UAE Civil Code approach requires contractual obligations to be performed according to their contents and in good faith.

Performance may include not merely the express promise but obligations arising naturally from:

law;

custom;

nature of the transaction.

14. Reciprocal Obligations

In a bilateral contract, each party's obligation may be connected to the other's performance.

The former Article 247 recognized the principle that where reciprocal obligations are due, one party may in appropriate circumstances refuse performance when the other has not performed.

This is commonly described as the exceptio non adimpleti contractus or defence of non-performance.

Example

Seller:

Deliver the property.

Buyer:

Pay the price.

If the seller has not performed the required delivery obligation, the buyer may have grounds to withhold corresponding performance, subject to the contract and applicable law.

15. Case Law 4 – UAE Court of Cassation, 15 April 1987

A UAE judicial decision concerning reciprocal contractual obligations emphasized that in bilateral contracts, the court must examine the interdependent obligations of the parties.

The case involved property-related contractual arrangements and the question whether one party could demand performance from the other when its own connected obligations had not been properly performed. The court relied on the former Articles 247 and 272. (eLaws)

The court emphasized that contractual performance must also be assessed in light of:

good faith;

the whole contractual arrangement;

connected obligations;

actual performance;

the nature of the transaction.

Principle

A party cannot ordinarily demand the other party's reciprocal performance without examining its own corresponding contractual obligations.

16. Rescission and Dissolution

Under the current 2025 Civil Transactions Law, Article 232 provides that a valid and binding contract cannot ordinarily be revoked, modified or rescinded except through:

mutual consent;

litigation;

a legal provision. (UAE Legislation)

This is the modern equivalent of the traditional contractual stability principle.

17. Mutual Rescission

Current Article 233 recognizes mutual rescission (Iqala).

Important points:

parties can mutually rescind after conclusion;

the general contractual requirements apply;

partial rescission is possible;

full rescission requires the possibility of restoring the parties to their prior position;

between the parties it operates as rescission;

regarding third parties, it is treated as a new contract. (UAE Legislation)

Exam formula

Mutual consent + valid rescission + possibility of restoration = mutual rescission.

18. Judicial Rescission

Current Article 234 provides for judicial remedies in bilateral contracts.

Where one party fails to perform when due, the other party, after notice, may seek:

performance; or

rescission.

The court may:

order performance;

grant additional time;

refuse rescission for a minor breach;

consider whether the breach has been cured;

award compensation where justified. (UAE Legislation)

19. Automatic Rescission

Current Article 235 permits parties to agree that the contract will automatically be rescinded upon failure to perform specified obligations.

This is important because contractual drafting can allocate the consequences of breach.

However, the precise wording of the clause remains critical.

20. Case Law 5 – Dubai Court of Cassation Appeal No. 469 of 2021

The modern DIFC judgment in Access Group v BLS discussed Dubai Court of Cassation Appeal No. 469 of 2021.

The authority was cited concerning the distinction between:

judicial termination under the traditional Article 272;

and automatic termination under the former Article 271.

The judgment explained that automatic termination required an express resolutory condition satisfying the relevant statutory requirements. (DIFC Courts)

Principle

A contractual termination clause should be examined carefully to determine whether it actually creates automatic termination or merely provides a basis for seeking judicial termination.

21. Abuse of Rights

The UAE civil-law system does not permit unlimited exercise of rights.

The former Article 106 identified circumstances in which exercise of a right could become unlawful, including:

intentional infringement of another's rights;

conflict with Sharia, law, public order or morals;

disproportion between intended benefit and harm caused;

exceeding customary bounds.

The concept remains important in civil-law analysis.

Example

A property owner technically possesses a legal right but exercises it solely to cause disproportionate harm to another person.

The court may have to consider whether the exercise of that right is legally abusive.

22. Case Law 6 – Dubai Court of Cassation Judgment No. 288 of 2025

The judgment was cited in Access Group v BLS for the operation of good faith and contractual conduct.

The authority was described as supporting the proposition that good-faith contractual performance includes avoiding conduct that unfairly disadvantages the counterparty and avoiding abusive exercise of contractual rights. (DIFC Courts)

Principle

Contractual entitlement is not necessarily a complete answer if the manner of exercising that entitlement violates applicable good-faith or abuse-of-right principles.

23. Unjust Enrichment

UAE civil law also recognizes restitutionary ideas designed to prevent unjust enrichment.

The basic problem is:

One person receives an economic benefit at another's expense without sufficient legal justification.

Examples include:

mistaken payment;

payment after an obligation has disappeared;

benefits received under an ineffective transaction;

retention of money after rescission;

unauthorized benefit.

The claim must nevertheless have a legally recognized basis; enrichment alone is not automatically sufficient.

24. Restitution

Restitution aims to reverse an unjustified benefit.

It can involve:

returning money;

returning property;

restoring possession;

paying the value of a benefit;

accounting for certain benefits.

Restitution is different from damages.

Restitution

Focus:

What did the defendant receive?

Damages

Focus:

What loss did the claimant suffer?

25. Case Law 7 – DAMAC Park Towers v Ward

DAMAC Park Towers Company Limited v Youssef Issa Ward [2015] DIFC CA 006

The DIFC Court of Appeal considered an unjust-enrichment/restitution claim involving property payments.

The court emphasized that enrichment alone is insufficient.

A claimant must establish an appropriate unjustifying factor or legal basis for restitution. (DIFC Courts)

Principle

Restitution is not simply a mechanism for recovering every benefit received by another person.

This is an important case for distinguishing:

contractual rights;

restitution;

unjust enrichment;

damages.

26. Tortious Liability

Civil liability in UAE law can arise independently of contract.

A basic tort analysis asks:

Was there an unlawful act?

Did damage occur?

Is there causation?

Is the defendant legally responsible?

Traditional UAE civil law is strongly influenced by the principle of reparation for actual legally recognized harm.

27. Case Law 8 – UAE Court of Cassation on Civil and Tortious Liability

A UAE judicial authority concerning contractual and tortious responsibility emphasized that both forms of liability require examination of their constituent elements, including:

wrongful conduct/breach;

damage;

causal connection.

The decision referenced the former Articles 272 and 282 and emphasized the court's role in evaluating evidence and the elements of liability. (eLaws)

Principle

A claimant must establish the necessary elements of the applicable form of civil liability; the mere existence of an adverse event does not automatically establish liability.

28. Damages

Damages generally seek to place the injured party, so far as legally possible, in the position it would have occupied absent the wrongful conduct.

Potential categories can include:

actual financial loss;

consequential loss where legally recoverable;

certain lost benefits;

moral damage where recognized;

property damage;

personal injury.

The claimant must establish the legally relevant connection between conduct and damage.

29. Causation

Causation connects:

wrongful act

↓

damage

Without sufficient causal connection, a damages claim may fail even if some form of wrongdoing is established.

Courts therefore examine whether the alleged damage is sufficiently connected to:

contractual breach;

tortious conduct;

unlawful exercise of rights;

defective performance.

30. Hardship and Exceptional Circumstances

The former Civil Code Article 249 contained the famous exceptional circumstances / hardship doctrine.

It applied where:

an exceptional public circumstance occurred;

it could not reasonably have been foreseen;

performance remained possible;

but performance became oppressive;

and threatened grave loss.

The judge could balance the interests of the parties and restore reasonable contractual equilibrium.

The new Civil Transactions Law should be consulted for the current formulation rather than relying mechanically on the old Article 249.

31. Property and Ownership

The Civil Code also deals with:

ownership;

possession;

transfer;

usufruct;

easements;

mortgage;

co-ownership;

acquisition;

protection of property.

A useful distinction is:

Ownership

The legal title/right in the thing.

Possession

Actual control or legal possession of the thing.

These concepts can overlap but are not identical.

32. Possession

Possession has important legal consequences because the law can protect possession independently of final ownership questions.

In an examination problem, ask:

Who possesses?

Who owns?

How was possession obtained?

Is possession lawful?

Has possession continued for the required period?

Is there a dispute over registration or title?

33. Principle of Legal Stability

Civil law seeks stability of:

contracts;

ownership;

transactions;

accrued rights;

judicial decisions.

The principle of non-retroactivity is particularly important.

A UAE Ministry of Justice judgment explained the traditional principle that laws ordinarily operate prospectively, while new mandatory public-order provisions can have immediate effect on future consequences of existing legal relationships. (eLaws)

34. Case Law 9 – UAE Supreme Court on Temporal Application of Law

The UAE judicial decision discussed the effect of a later mandatory legal rule on existing contractual/property arrangements.

The court distinguished between:

rights already finally established; and

future effects of an ongoing legal relationship.

It emphasized the principle that the law applicable when a contract was concluded generally governs its contractual framework, subject to later mandatory public-order legislation applying to future effects. (eLaws)

Principle

The temporal application of civil legislation depends on whether the new rule affects an already-acquired right or regulates future consequences under a mandatory rule.

35. Contractual Risk Allocation

The Civil Code permits parties to allocate many commercial risks contractually.

Examples:

warranties;

indemnities;

liquidated/agreed compensation;

insurance obligations;

limitation clauses, subject to mandatory law;

force-majeure clauses;

termination clauses;

conditions precedent.

However, contractual allocation does not override mandatory statutory rules.

36. Good Faith + Interpretation + Risk Allocation

These three concepts should be studied together.

Contract wording

↓

Parties' intention

↓

Nature of transaction

↓

Good faith

↓

Mandatory law

↓

Final contractual obligation

This is particularly important in sophisticated commercial disputes.

37. Current Civil Transactions Law — Key Revision Areas

For current 2026 revision, students should prioritize the following:

A. General principles

application of law;

persons;

capacity;

property;

rights;

abuse of rights.

B. Obligations

sources of obligations;

performance;

non-performance;

damages;

restitution;

unjust enrichment.

C. Contracts

formation;

validity;

interpretation;

good faith;

reciprocal obligations;

conditions;

termination;

rescission.

D. Property

ownership;

possession;

usufruct;

security rights;

mortgage;

co-ownership.

E. Specific contracts

sale;

lease;

agency;

loan;

deposit;

construction-related arrangements;

other nominate contracts.

38. Six Major Principles to Memorize

For an exam, remember:

1. Freedom of Contract

Parties generally have freedom to structure their contractual relationship within legal limits.

2. Pacta Sunt Servanda

A valid contract should be performed.

3. Good Faith

Contractual rights and obligations must be performed consistently with good faith.

4. No Abuse of Rights

A legal right cannot necessarily be exercised unlawfully or abusively.

5. Full Reparation

A person suffering legally compensable damage may seek appropriate compensation.

6. Unjust Enrichment

A person should not retain a benefit without a legally sufficient basis.

39. Civil Code Problem-Solving Method

For any UAE civil-law problem, use this sequence:

1. Identify the relationship

Contract / property / tort / unjust enrichment.

↓

2. Identify the legal right

What right does the claimant say exists?

↓

3. Identify the legal obligation

What was the defendant required to do?

↓

4. Identify the breach or interference

Was there:

non-performance?

defective performance?

unlawful conduct?

unjust enrichment?

abuse of right?

↓

5. Identify causation

Did the conduct cause the relevant harm?

↓

6. Identify the remedy

Possible remedies include:

specific performance;

rescission;

restitution;

damages;

injunction or other appropriate relief where available.

40. Major Case-Law Revision Table

41. Current-Law Warning for Examinations

This is particularly important in 2026.

Do not write:

“Article 246 of Federal Law No. 5 of 1985 is the current Civil Code provision…”

without qualification.

Instead write:

“Under the former 1985 Civil Code, Article 246 established the traditional good-faith rule. The 1985 Code was repealed when Federal Decree by Law No. 25 of 2025 entered into force on 1 June 2026. The current Civil Transactions Law should therefore be consulted for the presently applicable provision.”

The official 2025 legislation expressly states that the 1985 Law is repealed and that the new Law enters into force on 1 June 2026. (UAE Legislation)

This distinction is particularly important because much of the available UAE case law was decided under the former Code.

42. One-Page Revision Chart

43. Exam Answer Formula

For a 10–15 mark UAE Civil Code question, use:

Introduction

Define the legal concept.

Statutory framework

Identify the applicable provision under the current 2025 Civil Transactions Law, while noting older provisions where the case law predates 1 June 2026.

Essential elements

Explain the requirements in numbered form.

Judicial interpretation

Discuss at least 6 relevant cases.

Application

Give a short practical example.

Distinction

Compare the doctrine with related concepts.

Conclusion

State the governing principle and remedy.

44. Final Conclusion

The UAE Civil Code is best understood as a system of general private-law principles, rather than merely a collection of individual articles.

For revision, the most important conceptual chain is:

Consent → Contract → Good Faith → Performance → Breach → Liability → Remedy

and, for property:

Ownership → Possession → Transfer → Protection → Security

while for restitution:

Benefit → Legal Basis → Unjustified Retention → Restoration

The most important current-law point is that Federal Decree by Law No. 25 of 2025 replaced the 1985 Civil Transactions Law from 1 June 2026. (UAE Legislation) Consequently, older UAE judgments remain highly useful for understanding doctrine, but their 1985 article numbers should be treated as historical references unless confirmed against the current Law.

Quick Memory Formula

UAE Civil Code =

Contract + Good Faith + Property + Obligations + Liability + Damages + Restitution + Ownership + Possession + Remedies

Core cases to remember: Access Group v BLS, Forbes v Kidd, the UAE Cassation reciprocal-obligations authority, Abu Dhabi Cassation No. 179/2024, Dubai Cassation No. 469/2021, Dubai Cassation No. 288/2025, DAMAC v Ward, and the UAE temporal-application authority.