What are the elements of a commercial contract in the UAE?
The Civil Code (which is based on Sharia law principles) governs commercial contract law in the UAE.
Under the Civil Code, a commercial contract must have the following essential elements:
- mutual consent as to the creation and entering into of the agreement
- a permissible subject matter that is possible and defined (or capable of being defined); and
- a legal reason for the obligations and the subject matter of the agreement.
If the courts must decide on whether a legal contract exists, they will examine whether:
- there is an offer and acceptance;
- there is certainty regarding the terms, and;
- both parties have the capacity to enter into the agreement?
What is the duty of good faith with regards to commercial contracts in the UAE?
The element of good faith is codified in the Civil Code and is a vital part of all UAE commercial contracts. The duty of good faith stipulates that all parties to a contract must act honestly and fairly.
Why choose us?
Our experience in structuring, drafting, and negotiating commercial contracts spreads across various sectors including SME’s, real estate, hotels and leisure, retail, construction, and oil and gas. Over the past decade, we have advised on and drafted thousands of agreements, including:
- Joint ventures
- Shareholder agreements
- Partnership agreements
- Corporate structures and restructuring
- Distributorships, franchises, commercial agencies
- Service and consulting agreements
- Commercial real estate
- Real estate finance
- Construction documents
- Reviewing existing contracts to reflect what has been agreed
Our expertise means we can quickly identify potential causes for contractual dispute and draft robust terms to ensure your interests are protected.
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