Civil Law and UAE: Sources of Civil Obligations

1. Introduction

An obligation is a legal relationship under which one person, called the creditor, has the right to demand a particular performance from another person, called the debtor.

The performance may involve:

giving something;

doing something;

refraining from doing something;

paying money;

compensating another person for damage; or

returning a benefit received without legal justification.

Under the current UAE Civil Transactions Law, Federal Decree-Law No. 25 of 2025, the sources of obligations are expressly stated in Article 112. The provision classifies obligations into five principal sources:

Contract

Unilateral Act

Harmful Act (Tort)

Beneficial Act (Unjust Enrichment)

Law (UAE Legislation)

This classification is important because it tells us why a person becomes legally bound.

2. Meaning of a Civil Obligation

A civil obligation can be represented as:

Creditor → legal claim/right → Debtor → required performance

Example

A sells a car to B.

A has an obligation to deliver the car.

B has an obligation to pay the agreed price.

The obligation arises because of the contract.

Another example:

A negligently damages B's property.

There may be no contract between A and B, but A may have an obligation to compensate B because the obligation arises from a harmful act (tort).

3. Article 112: Five Sources of Obligations

The current Civil Transactions Law provides:

Obligations arise from legal acts, legal facts and the law.

It then identifies five sources:

(UAE Legislation)

This is the central provision for an examination answer on sources of civil obligations in UAE law.

4. Source One: Contract

Meaning

A contract is an agreement that creates legal obligations between the parties.

Examples include:

sale;

lease;

construction agreement;

employment-related contractual obligations;

loan;

insurance;

agency;

supply agreement;

service agreement.

Basic formula

Offer + Acceptance + Required Legal Conditions = Contractual Obligation

Once a valid contract exists, each party must generally perform its contractual obligations according to the applicable law and contractual terms.

Example

A agrees to sell 1,000 units of a product to B for AED 100,000.

A must deliver the goods.

B must pay the price.

These obligations arise from the contract.

5. Good Faith in Contractual Obligations

Contractual obligations are not necessarily limited to the literal words of the agreement.

The UAE civil-law approach recognizes the importance of good faith, the nature of the transaction, custom and legal requirements surrounding performance.

In Access Group DWC LLC & Proex Partners Ltd v BLS International FZE [2023] DIFC CFI 091, the Court discussed contractual interpretation, good faith and the requirement that contractual obligations be performed consistently with the applicable legal framework. (DIFC Courts)

Exam principle

A contractual obligation must be examined not only through the written clause but also through the applicable rules governing interpretation, performance and good faith.

6. Case Law: Contract as a Source

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

The DIFC Court considered contractual interpretation and the parties' obligations, including good-faith performance.

Importance

The case illustrates that:

Contract → contractual rights and obligations → interpretation → performance

The parties cannot simply ignore the contractual framework after entering into a binding agreement. (DIFC Courts)

7. Source Two: Unilateral Act

A unilateral act is an act performed by one person that can create a legal obligation without requiring a traditional bilateral contract.

This is different from a contract.

Contract

A + B → agreement → obligation

Unilateral act

A → legally recognized unilateral act → obligation

The precise legal consequences depend upon the applicable provisions and circumstances.

Examples can include legally recognized promises, declarations or other unilateral legal acts where the legislation gives them binding effect.

8. Importance of the Unilateral Act

The concept is important because not every civil obligation arises from an agreement between two people.

The law can recognize situations in which one person's legally effective conduct produces an obligation.

Therefore:

Absence of a bilateral contract does not necessarily mean absence of a civil obligation.

9. Source Three: Harmful Act (Tort)

A harmful act, commonly described as tortious liability, occurs when unlawful conduct causes damage to another person.

Basic formula

Harmful Act + Damage + Causation + Attribution = Civil Liability

Examples include:

negligence;

damage to property;

personal injury;

unlawful interference;

certain forms of digital harm;

damage caused by defective conduct;

wrongful acts causing economic loss where legally recoverable.

10. Tort Does Not Require a Contract

This is one of the most important distinctions.

Contractual liability

A and B have a contract.

A breaches the contract.

→ Contractual obligation is breached.

Tort liability

A and B have no contract.

A's wrongful act damages B.

→ A may owe B compensation under tort principles.

Therefore:

Contract is based primarily on agreement; tort liability arises from a legally recognized harmful act.

11. Case 2: BAM Higgs & Hill LLC v Affan Innovative Structures LLC [2021] DIFC CFI 106

The DIFC Court discussed UAE Civil Code principles concerning contractual/tortious liability and referred to Dubai Court of Cassation Case No. 33 of 2019.

The principle identified was that liability requires the relevant elements of breach, damage and causation. (DIFC Courts)

Importance

For an obligation arising from a harmful act, the claimant should establish:

wrongful conduct;

damage;

causal relationship.

This provides a useful examination formula:

No proven damage or causal connection → liability may not be established merely by showing wrongful conduct.

12. Case 3: Larmag Holding B.V. v First Abu Dhabi Bank PJSC & Others [2019] DIFC CFI 054

The case discussed UAE Civil Code provisions concerning harmful acts and unjust enrichment.

The Court referred to the principle that a harmful act can constitute a source of liability for loss or damage. It also discussed the then applicable Civil Code provisions dealing with unjust enrichment. (DIFC Courts)

Importance

The case illustrates the conceptual distinction between:

Harmful Act → compensation

and

Unjust Enrichment → restoration of unjustified benefit.

13. Source Four: Beneficial Act / Unjust Enrichment

The current Civil Transactions Law uses the expression “Beneficial Act (Unjust Enrichment)” as the fourth source of obligation.

The underlying idea is simple:

A person should not retain a benefit obtained from another person without a lawful basis where the legal requirements for restitution are satisfied.

Example

A accidentally transfers AED 50,000 to B.

There is no contract requiring B to receive the money.

B keeps the money despite having no legal entitlement.

The circumstances may create an obligation to return the benefit.

14. Unjust Enrichment: Basic Elements

A useful examination framework is:

Enrichment of Defendant

Impoverishment of Claimant

Connection between the two

Absence of lawful justification

→

Restitutionary obligation

The exact statutory requirements should be determined under the current Civil Transactions Law.

15. Case 4: DAMAC Park Towers Company Ltd v Youssef Issa Ward [2015] DIFC CA 006

The DIFC Court of Appeal discussed restitution and unjust enrichment.

The Court explained that enrichment alone was insufficient: the enrichment also had to be affected by an unjust factor. In that case, the payments had been made under a contractual arrangement and there was no sufficient unjust factor requiring restitution. (DIFC Courts)

Importance

The case demonstrates:

Benefit received ≠ automatically unjust enrichment.

A court must examine the legal basis for the benefit.

16. Case 5: Sky News Arabia FZ-LLC v Kassab Media FZ (LLC) [2018] DIFC CFI 067

The Court referred to Dubai Court of Cassation decisions concerning unjust enrichment under the former UAE Civil Code.

The cited Dubai Court of Cassation authorities explained that where property has been transferred without agreement or legal authorization, restitution may arise; however, where a contract governs the parties' relationship, the contractual arrangement ordinarily determines their rights and obligations. (DIFC Courts)

Importance

This gives an important rule:

Where a valid contract governs the transaction, contractual rights normally take priority over an attempt to recharacterize the same matter as unjust enrichment.

17. Case 6: Mahesh Srichand Tourani v Dusty Tourani & Duzty LLC [2018] DIFC CFI

The claimant sought repayment of a substantial amount and also pleaded unjust enrichment.

The Court examined whether the money was a gift, loan or unjustified enrichment. It emphasized that the person asserting the claim bears the burden of proving it. (DIFC Courts)

Importance

The case demonstrates that:

unjust enrichment must be properly established;

the factual basis matters;

the claimant must prove the necessary elements.

18. Source Five: Law

The fifth source is law itself.

Sometimes an obligation exists because legislation directly imposes it.

There may be no contract between the parties and no tort.

The legal rule itself creates the obligation.

Examples

Statutory obligations can arise concerning:

taxes and governmental payments;

regulatory compliance;

statutory compensation;

family obligations;

property registration;

consumer protection;

employment;

corporate duties;

data protection;

procedural obligations.

Therefore:

Legislation → legal duty → obligation

19. Why Law Is an Independent Source

The importance of law as a source is that some obligations exist regardless of private agreement.

For example:

A company cannot simply contract out of every mandatory statutory requirement.

Similarly, parties cannot generally create an agreement that removes a mandatory legal obligation where the applicable law prohibits such contracting.

20. Legal Acts and Legal Facts

Article 112 also places the five sources within the broader distinction between legal acts, legal facts and law. (UAE Legislation)

Legal Act

A person's intentional act produces legal consequences.

Examples:

contract;

unilateral declaration.

Legal Fact

An event or conduct produces legal consequences regardless of whether the person intended the precise legal result.

Examples:

harmful act;

certain enrichment situations.

Law

The legal system itself imposes an obligation.

21. Sources of Obligation: Complete Classification

A. Contract

Agreement between parties

Example:

Sale agreement.

B. Unilateral Act

One-sided legally effective act

Example:

Legally recognized unilateral undertaking.

C. Harmful Act

Wrongful conduct causing damage

Example:

Negligently damaging another's property.

D. Beneficial Act

Unjustified benefit

Example:

Receiving money without lawful basis.

E. Law

Statutory obligation

Example:

Mandatory legal duty imposed by legislation.

22. Difference Between the Five Sources

23. Contract vs Tort

Contract

The obligation exists because:

“You agreed to do it.”

Tort

The obligation exists because:

“Your wrongful conduct caused legally recognized harm.”

Example

A hires B to repair a building.

B fails to perform the contractual work.

→ Contractual obligation.

If B's negligent conduct also damages C's property:

→ A separate tortious obligation may arise depending upon the applicable facts and law.

24. Tort vs Unjust Enrichment

These are also different.

Tort

Focus:

Harm suffered

The claimant seeks compensation.

Unjust Enrichment

Focus:

Benefit improperly retained

The claimant seeks restoration/restitution.

Example

A negligently damages B's car.

→ Tort.

A receives B's money by mistake and has no right to retain it.

→ Potential unjust enrichment/restitution.

25. Contract vs Unjust Enrichment

Suppose A pays B AED 100,000 under a valid contract.

B keeps the money because it is contractually entitled to receive it.

Normally, the existence of the contractual basis means there is no unjust enrichment merely because B has been enriched.

This distinction was emphasized in the UAE authorities discussed in Sky News Arabia v Kassab Media and the DIFC authorities concerning unjust enrichment. (DIFC Courts)

26. Importance of Causation

Causation is particularly important for obligations arising from harmful acts.

The claimant must establish a sufficient connection:

Conduct → Damage

For example:

A drives negligently.

B's vehicle is damaged.

If the evidence establishes that A's negligence caused the collision, the causal connection can support liability.

But if B's loss resulted from an independent event unrelated to A's conduct, the causal link may fail.

27. Burden of Proof

The general litigation principle is:

The person asserting a legal right must establish the facts supporting that right, subject to the applicable evidentiary rules.

This is especially important for:

contracts;

unilateral acts;

tort;

unjust enrichment;

damages.

In Mahesh Srichand Tourani, the Court expressly emphasized the claimant's burden to prove the case. (DIFC Courts)

28. One Event Can Produce More Than One Obligation

A single factual situation can potentially involve multiple sources.

Example

A construction company enters a contract with B.

Later:

A breaches the construction contract.

A negligently damages C's property.

A receives an amount from B that it has no legal right to retain.

Potentially:

Contract → B's contractual claim.

Tort → C's damage claim.

Unjust enrichment → restitution claim concerning the improperly retained amount.

Therefore:

Sources of obligations are legally distinct even when they arise from the same factual background.

29. Modern Digital Example

Suppose a company operates an automated online platform.

Contract

Customer agrees to platform terms.

→ Contractual obligations.

Unilateral Act

The company makes a legally effective unilateral undertaking.

→ Possible unilateral obligation.

Harmful Act

A negligent cybersecurity failure causes legally recoverable damage.

→ Tortious obligation.

Unjust Enrichment

The system accidentally credits AED 20,000 to the wrong account.

→ Possible restitutionary obligation.

Law

The company has mandatory statutory duties concerning data protection or regulatory compliance.

→ Obligations imposed by law.

This demonstrates why Article 112's five-source classification remains useful in modern digital transactions. (UAE Legislation)

30. Relationship with Special Laws

Civil obligations are not found exclusively in the Civil Transactions Law.

Other UAE legislation can create or regulate obligations, including laws relating to:

companies;

employment;

consumer protection;

electronic transactions;

personal data;

arbitration;

evidence;

insolvency;

property;

insurance;

construction and other regulated sectors.

The Civil Transactions Law provides the general civil-law framework, while special legislation may create specific obligations or modify the general rules.

31. DIFC Qualification

The cases above include several DIFC decisions because DIFC judgments provide useful UAE-based judicial discussion of:

contract;

obligations;

unjust enrichment;

tort;

damages;

restitution.

However, DIFC law is a separate legal regime. A DIFC judgment should not automatically be presented as binding precedent for a mainland UAE court.

This distinction is especially important in an examination answer.

32. Six Key Case Laws — Quick Revision

1. Access Group DWC LLC v BLS International FZE [2023] DIFC CFI 091

Topic: Contractual obligations and good faith.

Principle: Contractual rights and obligations must be interpreted and performed within the applicable legal framework. (DIFC Courts)

2. BAM Higgs & Hill LLC v Affan Innovative Structures LLC [2021] DIFC CFI 106

Topic: Liability.

Principle: Liability requires the relevant elements of breach, damage and causation. (DIFC Courts)

3. Larmag Holding B.V. v First Abu Dhabi Bank [2019] DIFC CFI 054

Topic: Harmful act and unjust enrichment.

Principle: Harmful acts can generate liability for legally recognized loss; unjust enrichment is a separate basis of obligation. (DIFC Courts)

4. DAMAC Park Towers v Youssef Issa Ward [2015] DIFC CA 006

Topic: Restitution/unjust enrichment.

Principle: Enrichment alone is insufficient; the required unjust factor must be established. (DIFC Courts)

5. Sky News Arabia v Kassab Media [2018] DIFC CFI 067

Topic: Unjust enrichment.

Principle: Where a contract governs the relationship, contractual rights generally determine the parties' entitlements rather than unjust enrichment. (DIFC Courts)

6. Mahesh Srichand Tourani v Dusty Tourani & Duzty LLC [2018] DIFC CFI

Topic: Unjust enrichment and burden of proof.

Principle: The claimant must establish the factual and legal basis of the alleged obligation. (DIFC Courts)

33. Exam-Oriented Answer

If asked “Explain the sources of civil obligations under UAE law”, write:

Under Article 112 of the UAE Civil Transactions Law, obligations arise from legal acts, legal facts and the law. The principal sources are contract, unilateral act, harmful act (tort), beneficial act (unjust enrichment), and law. A contract creates obligations through agreement; a unilateral act can create obligations through a legally recognized one-sided act; a harmful act creates an obligation to compensate for legally attributable damage; unjust enrichment creates a restitutionary obligation where a benefit is obtained without sufficient legal justification; and law itself can directly impose obligations. UAE and DIFC case law demonstrates the importance of contractual performance, causation, damage, restitution and proof in determining whether an obligation exists. (UAE Legislation)

34. Final Conclusion

The sources of civil obligations in UAE law can be remembered through five words:

Contract – Unilateral Act – Tort – Unjust Enrichment – Law

The central classification under Article 112 of the current Civil Transactions Law expressly identifies these five sources. (UAE Legislation)

The practical distinction is:

Agreement → Contract

One-sided legal act → Unilateral obligation

Harm → Tort liability

Unjustified benefit → Restitution

Statutory command → Obligation imposed by law

Quick Memory Formula

C + U + T + E + L = Sources of Civil Obligations

C = Contract

U = Unilateral Act

T = Tort/Harmful Act

E = Enrichment/Beneficial Act

L = Law

These five categories provide the basic structure for analysing why a civil obligation exists, who owes it, to whom it is owed, what performance is required, and what remedy may follow from non-performance.