Even if the contract contains explicit termination provisions, the provisions of UAE law are relevant (for contracts subject to UAE law or performed in the UAE). In accordance with Article 267 (and reproduced in Article 892, which applies specifically to « muqawala » or « employment contracts », including construction contracts) of Federal Law No. 5/1985 on the Civil Transactions Act of the State of the United Arab Emirates (the « Civil Code »), a contract may be legally terminated in one of three ways: this type of claim is very common. In practice, these requests are often accepted by the court, especially in cases where the court is not convinced of the reasons given for terminating the registered agency contract. Article 271 of the Civil Code provides that the parties may agree that contracts will be automatically terminated without the need to obtain a court decision if their considerations are not enforced. Article 271 also expressly provides that such an agreement does not release the parties from the service of a notice of termination unless the agreed contract provides that notice is not required. « In the case of bilateral treaties in respect of which reciprocal obligations are due, each party has the right to refrain from fulfilling its obligation if the other party fails to fulfil its obligation. » The law of the UAE recognizes the principle of freedom of contract, the contracting parties are theoretically free to choose the law applicable to this contract and to choose arbitration as the applicable law and arbitration as a dispute settlement mechanism. When considering whether a contract has actually been concluded, courts generally consider the circumstances surrounding it and, in particular, whether there is any evidence to that effect: this provision focuses on a lump-sum indemnification clause, not on a clause to exclude or limit liability for certain types of losses. However, there is general agreement that exclusion and limitation clauses are acceptable under UAE contract law, unless they seek to limit liability for « unilateral acts » such as fraud and wilful misconduct. In other words, liability for an intentional act of breach of contract or damage cannot be limited by contract.

Although we explicitly refer to the termination of contracts in the construction industry, some of these basic principles can be traced back to other contracts, regardless of the sectors in which they are used. Any contract that meets the requirement and essential components may be legal unless it is declared illegal due to disqualifying factors for the content or performance of a contract. Article 246 of the Civil Code of the United Arab Emirates clearly states that a contract must be performed in accordance with its content and in a manner that meets the requirements of good faith. The law also provides for the termination of the contract. Article 267 of the Civil Code of the United Arab Emirates, which states: « If a contract is valid and binding, neither party is entitled to withdraw from it or to modify or cancel it, unless this is done by mutual agreement or by order of the court or on the basis of a legal provision. » The Civil Code does not explicitly define the parameters of the meaning of the duty of good faith, but implies that the contracting parties must act in accordance with the virtues of the law, customs and the overall nature of the contract, as well as the actual conditions set out in the contract. Our experience in structuring, drafting and negotiating commercial contracts covers a variety of sectors, including SMEs, real estate, hospitality and leisure, retail, construction and oil and gas. Over the past decade, we have advised and drafted thousands of agreements, including: This would apply in similar circumstances if the usual right to terminate for a negative breach of contract occurs. For example, if a party has unlawfully refused to perform work, has left the premises, or if the employer has not granted access to the site. Outsourcing has become an essential aspect of the construction industry in the UAE, with more complex and specialized projects, it is incomprehensible for a company to have the necessary skills to do all the work. In this case, one could consider the incompatibility of a situation where the prime contractor of a project, as a sole contractor, would have to maintain and pay a huge workforce with a wide range of skills and specializations to work on such a project, which is ultimately economically unsustainable. In this article, we summarize how oral contracts are treated under UAE law, including the interpretation of silence, the relevance of habits and practices, and the effective termination of an oral contract. If you terminate in accordance with the express provisions of a contract, Article 271 of the Civil Code continues to apply.

Therefore, to the extent that the contractual termination clauses are clear, it is not necessary in this case to obtain a court order and termination may be issued subject to the express prohibition of the contract. This is also the case when a party resigns for convenience. It would be advisable to comply with all requirements to notify the other party and include appropriate language in your notice of termination to confirm that the termination will be in accordance with both the law and the contract. If your contract is governed by English law but does not contain an FM clause, in rare cases it may be possible for the contract to be performed in accordance with the doctrine of frustration if an event or circumstance occurs that makes the performance of the contract physically or economically impossible (or transforms the obligation into a completely different obligation). Note that an FM event is mutually exclusive out of frustration and that the appeal of an FM clause cannot be used to thwart a contract. According to the Civil Code, a commercial contract must include the following essential elements: Once you have determined that you have the right to terminate your contract, it is essential to ensure that you comply with the agreed termination provisions in order to trigger the termination. In most FIDIC series contracts, the terminating party is required to issue a prior warning or « notice of default », after which a binding period of time expires (usually 14 or 28 days) before the final right of termination occurs and the contract can be terminated immediately. It is necessary to follow this process in order to prove an appropriate written record, which can then be relied upon in future litigation.

Art. 254 para. 1 of the Civil Code provides that a party to the contract is entitled to enter into a contract on its behalf on condition that the rights arising from the contract confer an advantage on a third party if it has a personal moral or material interest in the service specified in the contract. Article 254(2) goes further by providing for a direct right granted to the third party against the funeral director for the performance of that contractual provision and by allowing him to request its execution, unless otherwise agreed. Article 254(3) then provides for the enforcement of that condition in so far as either of the Contracting Parties providing the provision may require its enforcement, unless there is a contractual provision demonstrating that only the beneficiary has such a right. .