Federal Decree Law No. (5) of 1985 Concerning the Issuance of the Civil Transactions Law of the United Arab Emirates (justice and juiciary law)

Article (1) 
The annexed law concerning civil transactions for the United Arab Emirates shall be 
enforced.

Article (2) 
This Law shall be published in the official gazette and shall come into effect three months 
after its date of publication.  
 
Zayed bin Sultan Al Nahyan President United Arab Emirates  
 
Issued by us in the Presidency Palace in Abu Dhabi on:  
15 / 12 / 1985 AD    
Corresponding : 03 Rabi’ul Thani 1406 A.H.  
  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  2 
 Introductory Section: General Provisions  
Chapter One:  Provisions relating to the application and effect of the law in 
time and place  
Part  1: The Law and its application  
Article (1) 
The legislative provisions shall apply to all matters dealt with by those provisions in the 
letter and in the spirit.  There shall be no scope for innovative reasoning in the case of 
provisions of definitive import.  If the judge finds no provision in this Law, he must pass 
judgment according to the Islamic shar îʿa. Provided that he must have regard to the choice of 
the mos t appropriate solution from the schools of Imam Malik and Imam Ahmad bin 
Hanbal, and if none is found there, then from the schools of Imam al -Shafiʿi and Imam Abu 
Hanifa as dictated by expediency.  
If the judge does not fi nd the solution there, then he must render judgment in accordance 
with custom, but provided that the custom is not in conflict with public order or morals, and if a custom is particular to a given emirate, then the effect of it will apply to that emirate.  
 
Article (2) 
The rules and principles of Islamic jurisprudence (fiqh) shall be relied upon in the understanding, construction and interpretation of these provisions.

Article (3) 
Public order shall be deemed to include mat ters relating to personal status such as marriage, 
inheritance, and lineage, and matters relating to sovereignty, freedom of trade, the 
circulation of wealth, rules of private ownership and the other rules and foundations upon which society is based, in su ch a manner as not to conflict with the definitive provisions and 
fundamental principles of the Islamic Shari'ah.  
 
 
  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  3 
 Part  2: The application of the Law with regard to time

Article (4) 
(1)  It shall not be permissible to repeal a legislative provision or to suspend the operation of 
it save by a subsequent legislative provision expressly so enacting or which includes a 
provision inconsistent with the earlier legislative provision or which rearranges the subject 
matter the rules for which are already laid down  in such legislation.  
(2) If a legislative provision repeals an earlier legislative provision and the later legislative provision is itself repealed, such repeal shall not result in the earlier provision coming into force again unless it is expressly so laid down.

Article (5) 
(1)  Provisions relating to competence (legal capacity) shall apply to all persons to whom the 
conditions laid down in such provisions apply.  
(2)  If a person is competent under old provisions and he loses that competence under new 
provisions, such loss shall not affect his earlier dispositions.

Article (6) 
(1)  The new provisions relating to limitation of time for claims shall apply as from the time 
they come into force to every period of limitation which has not expired.  
(2)  Provi ded that the old provisions shall apply to questions relating to the commencement 
of the running of time, and the suspension and interruption thereof, in relation to the period 
prior to the new provisions coming into force.

Article (7) 
(1)  If the new provision lays down a limitation period shorter than that laid down in the old 
provision, the new period shall apply from the time the new provision comes into effect 
notwithstanding that the old period has already commenced.  
(2)  If, however, the remainder of the period provided for under the old provision is shorter 
than the period provided for under the new provision, the period of limitation shall expire  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  4 
 upon the expiry of that remainder.

Article (8) 
The provisions relating to evidential proof current at  the time such proof was prepared, or 
should have been prepared, shall apply thereto.

Article (9) 
Times shall be calculated according to the solar (Gregorian) calendar unless the law provides 
otherwise.  
 
Part  3: The application of the Law with regard to place

Article (10)  
The law of the State of the United Arab Emirates shall be the authoritative source in 
determining relationships when the nature of such relationships requires to be determined 
in a suit in which there is a conflict of laws as to the law to be applied between the parties.

Article (11)  
(1)  The law of the state of which a person has the nationality shall apply to the civil status 
and competence of such person but nevertheless in financial dealings transacted in the State of the United Ara b Emirates the results of which materialise therein, if one of the parties is an 
alien of defective capacity and the lack of capacity is attributable to a hidden cause which 
the other party could not easily discover, such cause shall have no effect on his capacity.  
(2)  With regard to the legal regulation of foreign juridical persons including companies, 
associations, establishments and otherwise, the law of the state in which such bodies have their actual main administrative centre shall apply thereto, and  if such a body carries on an 
activity in the State of the United Arab Emirates, the national (sc.UAE) law shall apply.

Article (12)  
(1) The substantive requirements for mar riage shall be determined by the law of the state  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  5 
 where the marriage was performed.  
(2) With regard to the form, a marriage between aliens or between a national and an alien 
shall be deemed to be valid if it is contracted in accordance with the rules of th e country in 
which it took place, or if the rules laid down by the law of each of the spouses have been 
observed.

Article (13)  
(1) The law of the state where the marriage was performed shall govern the personal and 
financial effects entailed by the marria ge. 
(2) The law of the state where the marriage was performed shall govern divorce by the 
husband, divorce officiated by the judge and separation.

Article (14)  
In the circumstances provided for in the two foregoing Articles, if one of the spouses is a 
national at the time the marriage is contracted, the law of the United Arab Emirates alone 
shall apply, save in respect of the legal capacity to marry.

Article (15)  
Obligations to support relatives shall be governed by the law of the person having such 
obligation.

Article (16)  
Substantive matters relating to guardianship, trusteeship and maintenance and other systems laid down for the protection of persons havin g no competence or of defective 
competence or of absent persons shall be governed by the law of the person requiring to be 
protected.  
 
  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  6

Article (17)  
1. Without prejudice to P aragraphs (3) and (4) of this Article, inheritance shall be governed 
by the law of the state where the deceased resided at the time of death.  
2. The financial rights existing on its territory and belonging to an alien having no heirs shall 
devolve to the State.  
3. The substantive provisions of will and all dispositions made upon death hall be governed 
by the law of the state designated by the will or disposition or the law of the state whose 
nationality the person making the disposition holds at the time of death if the will or 
disposition does not designate a law.  
4. The form of the will and all dispositions made upon death shall be governed by the law of 
the state designated by the will or disposition, the law of the state whose nationality the 
person ma king the disposition holds at the time of issuance thereof or the law of the state in 
which the disposition was made.  
5. The laws of the United Arab Emirates shall govern the will issued by an alien regarding his property located at the State.

Article (18) 
(1)  Possession, ownership and other rights over property shall be governed by the lex situs 
in the case of real property, and movable property shall be subject to the law of the place in 
which such property is at the time when the cause resulting in t he acquisition or loss of 
possession, ownership or other rights over the property arose.  
(2)  The law of the state in which property is located shall determine whether such property 
is real or movable.

Article (19)  
(1)  The form and the substance of contr actual obligations shall be governed by the law of 
the state in which the contracting parties are both resident if they are resident in the same state, but if they are resident in different states the law of the state in which the contract was 
concluded sh all apply unless they agree, or it is apparent from the circumstances that the 
intention was, that another law should apply.  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  7 
 (2)  The lex situs of the place in which real property is situated shall apply to contract made 
over such property.

Article (20)  
(1)  Non -contractual obligations shall be governed by the law of the state in which the event 
giving rise to the obligation took place.  
(2)  The provisions of the foregoing paragraph shall not apply to obligations arising out of an 
unlawful act in connectio n with events taking place abroad which are lawful in the State of 
the United Arab Emirates notwithstanding that they are considered to be unlawful in the 
country in which they took place.

Article (21)  
The rules relating to jurisdiction, and all procedu ral matters, shall be governed by the law of 
the state in which the action is brought or in which the procedures are carried out.

Article (22)  
The provisions of the foregoing Articles shall not apply in cases where there is a contrary 
provision in a speci al law or in an international convention in force in the State.

Article (23)  
The principles of private international law shall apply in the absence of a relevant provision 
in the foregoing Articles governing the conflict of laws.

Article (24) 
The law o f the State of the United Arab Emirates shall apply in the case of persons of 
unknown nationality, or persons who are shown to have more than one nationality at the same time.  Provided that in the case of persons shown to have at the same time the 
nationality of the United Arab Emirates and of another State, United Arab Emirates law must be applied.  
  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  8

Article (25)  
If it appears from the provisions contained in the foregoing Articles that the law to be 
applied is the law of a particular state which has more than one legal system, the domestic 
law of that state shall determine which legal system is to be applied.  In the absence of a 
specific provision, the prevailing system of law, or the law of the place of residence, as the 
case may be, shall apply.

Article (26)  
(1)  If it is established that a foreign law is to be applied, only the domestic provisions thereof 
shall be applied, to the exclusion of those provisions relating to private international law.  
(2)  Provided that the law of the United Arab Emirates  shall apply if international law relating 
to applicable law provides that United Arab Emirates law shall apply.

Article (27)  
The provisions of a law designated in Articles (10), (11), (18), (19), (20), (21), (22), 
(23), (24), (25) and (26) of the present  Code shall not apply if such provisions 
contradict the provisions of the Islamic Sharia or the public order or morals in the United Arab Emirates.

Article (28)  
The law of the United Arab Emirates shall be applied if it is impossible to prove the existen ce 
of an applicable law or to determine its effect.  
  
 
Chapter Two: Certain jurisprudential maxims and rules of interpretation

Article (29)  
Ignorance of the law is no excuse.  
 
   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  9

Article (30)  
Exceptions may not be used by analogy, nor may their interpretations be extended.

Article (31)  
A mandatory provision (of law) shall take precedence over a contractual stipulation.

Article (32)  
That without which an obligation cannot be performed is itself an obligation.

Article (33)  
A rule shall depend on its cause for its existence and shall cease to be if the cause ceases to exist.

Article (34)  
Fungibles shall not cease to exist.

Article (35)  
Certainty shall not be removed by a doubt.

Article (36)  
There is a presumption of continuance.

Article (37)  
There is a presumption that an obligation has been discharged.  
 
  
 
 
  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  10

Article (38)  
There is a presumption against the existence of supervening qualities (i.e.  things will be 
presumed to be normal and usual unless the contrary is proved).

Article (39)  
A thing proved to have existed in the past shall be deemed still to exist in the absence of 
evidence to the contrary.

Article (40)  
There is a presumption that an event (known to have occurred) has occurred in the immediate past.

Article (41)  
No analogies may be drawn from what is shown to be contrary to analogy (i.e.  outside the 
normal course of events).

Article (42)  
(1)  No harm shall be done, nor harm done in return.  
(2)  Harm shall be made good.  
(3)  Harm may not be made good by causing s imilar harm (in return).

Article (43)  
Necessity excuses the doing of a prohibited act.

Article (44)  
A person shall be bound by his admissions.  
The averting of evil is better than the doing of good.  
  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  11

Article (45)  
Compelling need shall not annul the rights of others.

Article (46)  
(1)  Custom, whether general or particular, is binding.  
(2)  Regard shall be had to custom if it is of long duration and continuing, or is prevalent.  
(3)  Actual facts may be established by reference to custom.

Article (47)  
Customary usage amounts to evidence (of rights and obligations) and shall be abided by.

Article (48)  
What custom (or common knowledge) regards as impossible (absurd) shall be treated as 
what is in fact impossible (absurd).  What custom (or common knowledge) regards as 
impossible (absurd) shall be treated as what is in fact impossible (absurd).

Article (49)  
Greater (evidential) weight shall be given to the prevailing and the commonplace than to the 
rare (and exceptional).

Article (50)  
That which is established by custom is equivalent to a stipulated condition.

Article (51)  
An obligation under custom has th e same force as an expressly stipulated condition.

Article (52)  
Where prohibition conflicts with an obligation, the prohibition shall take precedence.   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  12

Article (53)  
That whi ch is ancillary attaches (to the principal subject matter) and need not be separately 
specified.

Article (54)  
If a matter ceases to exist, that which is incidental to it shall also cease to exist.

Article (55)  
That which has lapsed (been waived) or cea sed to exist shall not arise again.

Article (56)  
A subordinate matter (right or obligation) shall be annulled if the principal matter (right or 
obligation) is annulled.

Article (57)  
If (and only if) the original thing is lost, an obligation may be perfor med by use of a 
substitute.

Article (58)  
A disposition affecting the public must, to be valid, be in the public interest.

Article (59)  
An answer refers back to the question.

Article (60)  
No regard shall be had to mere possibilities.  
 
  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  13

Article (61)  
No regard shall be had to an (act performed in consequence of a) belief which is shown to 
be wrong.

Article (62)  
If a matter is established by (proper lawful proof, (the effect is tantamount to the judge being) as an eye -witness.

Article (63)  
A person sh all be bound by his admissions.

Article (64)  
A subsidiary matter may be proved without the principal matter being proved.

Article (65)  
A matter which is (merely) outwardly apparent suffices as a defence (to maintain the status quo), but not to establish a (positive claim of) right.

Article (66)  
The yield (esp.  of animals or land) belongs to (him who undertakes) the burden (of making 
the payment for the upkeep of the thing producing the yield).

Article (67)  
(He who has) the advantage (of e.g.  an arrangement must bear) the burden (e.g.  of 
contributing his share).

Article (68)  
No person may validly make a disposition over the property  of another.  
   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  14

Article (69)  
He who prematurely obtains a thing shall be penalised by being deprived of it.

Article (70)  
No person may resile from what he has (conclusively) performed.  
 
 
Chapter  Three : Persons  
Part  1 : Natural Persons

Article (71)  
(1)  The personality (status of person) of a human being shall commence at the moment of 
being born alive.  It shall terminate upon his death.  
(2)  The law shall lay down the rights of a fetus in utero.

Article (72)  
(1)  The facts of birth and death shall be recorded (or: proved) by entries in registers kept for 
that purpose.  
(2)  If there is no such evidence or if it should appear that the entries in the register are 
incorrect, it shall be permissible to prove the same by  any legal means of proof.

Article (73)  
Provisions relating to foundlings shall be laid down in a special law.

Article (74)  
The provisions relating to lost and missing persons shall be laid down in a special law.  
  
  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  15

Article (75)  
(1)  The nationality of the State of the United Arab Emirates shall be regulated by law.  
(2)  By the word "national", wherever it appears in the Civil Code, shall be meant any person 
having the nationality of the United Arab Emirates.  By the word "alien" shall be meant any 
person who does not have the nationality of the United Arab Emirates.

Article (76)  
(1)  The family of a person shall consist of his spouse and relatives.  
(2)  All persons coming from a common stock shall be deemed to be relatives.

Article (77)  
(1)  A direct relationship is the relationship of root and branch (direct lineage).  
(2)  An indirect relationship is the link between persons of a common stock without direct 
lineage, whether or not within the degree of consanguinity precluding marriage.

Article (78)  
In calculating the degree of direct relationship each upwards stage of generation to the 
source shall be regarded as one degree away from that source.  In calculating the degree of 
indirect relationship degrees of ascent from the descendants to th e common origin shall be 
taken into account, and then downwards from him to the last generation, and each stage 
shall be counted as a degree with the exception of the common source.

Article (79)  
One of the relations of the spouses shall be regarded as having the same degree of relationship to the other spouse.  
  
 
  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  16

Article (80)  
(1)  Each person shall have a name and a surname, and his surname shall attach to the 
names of his children. 
(2)  A special law shall regulate the manner of acquisition and changing of names and 
surnames.

Article (81)  
(1)  A residence (mawtin) is the place in which a person normally resides.  
(2)  A person may have more than one residence at the same time.  
(3)  If a person does not have a place in which he normally resides, he shall be deemed to be 
without a residence.

Article (82)  
The place in which a person carries on a trade, profession or occupation shall be deemed to 
be a residence in connection with the administ ration of the business relating to such trade, 
profession or occupation.

Article (83)  
(1)  The residence of a person of defective capacity or a person under a restriction, and 
missing or absent persons, shall be the residence of the person representing s uch persons at 
law.  
(2)  A person of defective capacity who is authorised to trade shall have a special residence 
in relation to the work and dealings which the law regards him as having capacity to transact.

Article (84)  
(1)  It shal l be permissible to adopt an elective place of residence to carry out a specific legal 
operation.  
(2)  An elective place of residence may only be proved by writing.  
(3)  An elective place of residence to carry out a legal operation shall be the residence i n 
relation to all matters connected with that operation including compulsory enforcement  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  17 
 proceedings unless it is expressly stated that that residence is restricted to certain matters 
exclusively.

Article (85)  
(1)  Every person who has reached the age of  majority in possession of his mental powers 
and who has not been placed under a restriction shall be of full capacity to exercise his rights laid down in this law and the laws deriving from it. 
(2)  A person shall be of the age of majority upon reaching t he age of twenty one lunar years.

Article (86)  
(1)  No person who lacks discretion by reason of youth, imbecility or insanity shall be 
competent to exercise his civil rights.  
(2)  Persons under the age of seven years shall be deemed not to have reached t he age of 
discretion.

Article (87)  
Any person who has reached the age of discretion but has not reached the age of majority and any person who has reached the age of majority but is an idiot or of unsound mind shall 
be of defective capacity under the law.

Article (88)  
Persons of no capacity or of defective capacity as the case may be shall, with regard to 
guardianship, tutelage and custodianship, be subject to the relevant conditions in 
accordance with the rules laid down by law.  
  
   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  18

Article (89)  
No per son may divest himself of his personal liberty or of his capacity, or vary the 
concomitants thereof.

Article (90)  
Any person who suffers an unlawful infringement of any of the rights appurtenant to him as 
a person shall have the right to require that suc h infringement cease, together with 
compensation for any damage suffered by him.

Article (91)  
Any person whose use of his name or surname or both is disputed by another without justification or whose name or surname or both are wrongfully assumed by anot her shall 
have the right to require that such infringement do cease and to claim compensation for any 
harm suffered.  
  
Part  2: Juridical Persons

Article (92)  
Juridical persons shall consist of the following: - 
(a)  the State, the (individual) Emirates, the Municipalities and other administrative units, 
under the conditions laid down for them by law;  
(b)  public departments, authorities and bodies and public institutions and establishments 
upon which a judicial person ality is conferred by law;  
(c)  Islamic bodies recognised by the State as having a juridical personality;  
(d)  waqfs; 
(e)  civil and trading companies, save as excluded by a special provision;  
(f)  private societies and establishments established in accordance with the law; and  
(g)  any grouping of persons or property having a juridical personality under the provisions 
of the law.  
   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  19

Article (93)  
(1)  A juridical person shall enjoy all rights, save those pertaining (exclusively) to the capacity 
of being a na tural person, within the limits laid down by law.  
(2)  Such persons shall have:‑  
(a)  separate financial liability;  
(b)  legal capacity within the limits laid down by the document establishing it, or as laid 
down by law;  
(c)  the right to bring proceedings ; and  
(d)  a separate place of residence.  The place of residence of a juridical person shall be 
deemed to be the place in which it has its administrative centre, and so far as concerns 
juridical persons whose head office is abroad but which carry on an ac tivity in the State, 
their administrative centre, with regard to the law of the State, shall be deemed to be the 
place at which the local administration is situated. 
(3)  Such persons must have a (natural) person to express their intentions.

Article (94)  
Juridical persons shall be subject to the special laws pertaining to them.  
 
Chapter  Four:  Things and property

Article (95)  
Property ("mal") is anything  or right having a material value in dealing.

Article (96)  
Property may be "mut aqawwim" or "non -mutaqawwim".  Mutaqawwim property is that 
which it is permissible for a Muslim lawfully to enjoy, and non -mutaqawwim property is 
that which it is not permissible for a Muslim lawfully to enjoy.  
   
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Article (97)  
Any thing which can be possess ed whether physically or constructively, or which may be 
lawfully enjoyed, and which does not by its nature or by operation of law fall outside the 
scope of dealing (transactions), shall be a proper subject of property rights.

Article (98)  
Things which a re by their nature outside the scope of dealing are those which no person 
may possess exclusively, and things which are outside the scope of dealing by operation of law are those which the law does not permit to be the subject of property rights.

Article (99)  
(1)  Fungible things are those whose units or parts are of a replaceable nature, or nearly so , 
in such a way that by custom other things can take their place without any appreciable distinction, and which are calculated in dealing by number, measurement, capacity or weight.  
(2)  Non -fungibles are those things whose individual instances differ appr eciably as to 
description or value, or which are unique in circulation.

Article (100)  
(1)  Consumable things are those the nature of which cannot be enjoyed save by consuming 
or spending them.  
(2)  Usable things (durables) are those which can only be enj oyed by repeated use, they 
retaining their specific identity.

Article (101)  
Any thing of a permanently fixed nature and which cannot be removed without damaging or altering its surroundings shall be regarded as real property.  Everything else shall be 
regarded as movable property.  
   
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Article (102)  
Real property by allocation (i.e.  intended to serve as part of the real property) is movable 
property placed by an owner in real property of his, with the intent of its being used or 
exploited, even though not ( permanently) fixed to the real property.

Article (103)  
(1)  All real property or movables owned by the State or public juridical persons, allocated in 
fact or in law for the public benefit, shall be deemed to be public property.  
(2)  In no circumstances may such property be disposed of or distrained (attached) or pass 
into (private) ownership by effluxion of time.  
  
Chapter Five:  Rights  
Part 1: The scope and exercise of rights

Article (104)  
The doing of what is permitted by law negates liability, and no pe rson who lawfully 
exercises his rights shall be liable for any harm arising thereout.

Article (105)  
(1)  It is proper that a private harm be borne to avert a public harm.  
(2)  It is proper that a greater harm be removed by (inflicting) a lesser harm.  
 
Part  2: The abuse of rights

Article (106)  
(1)  A person shall be held liable for an unlawful exercise of his rights.  
(2)  The exercise of a right shall be unlawful:  
(a)  if there is an intentional infringement (of another's rights); 
(b)  if the interests w hich such exercise of right is designed to bring about are contrary to the 
rules of the Islamic Shari'ah, the law, public order, or morals;   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  22 
 (c)  if the interests desired are disproportionate to the harm that will be suffered by others; or  
(d)  if it exceeds the bounds of usage and custom. 
 
Part  3: Types of rights

Article (107)  
A right may be personal, property or moral (choses in action).

Article (108)  
A personal right is a legal relationship between an obligee and an obligor whereby the 
obligee has a claim against his obligor for the transfer of a property right, or to perform or 
refrain from performing an act.

Article (109)  
(1)  A property right is a  direct power over a particular thing, given by law to a particular 
person.  
(2)  A property right may be original or consequential.

Article (110)  
(1)  Original property rights are rights of ownership, disposal, usufruct, use, residence or 
shared occupati on, rights of easement, waqfs, and rights which the law provides shall be 
deemed to be such.  
(2)  Consequential property rights are mortgages for security, possessory mortgages, and 
liens.

Article (111)  
(1)  Moral rights are those which subsist over a non -material thing.  
(2)  Rights of authors, inventors, artists, and rights in trademarks  and other moral rights, shall 
be governed by the provisions of special laws.  
   
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 Part 4: Proof of rights  
1- Categories of ev idence

Article (112)  
Evidence to prove a right shall take the following forms: - 
(a)  writing;  
(b)  testimony;  
(c) circumstantial evidence;  
(d)  eye-witness and expert evidence;  
(e)  admissions; and  
(f)  evidence on oath.  
  
2- General rules of proof

Article (113)  
The burden lies on an obligee to prove his right, and on an obligor to refute it.

Article (114)  
Writing, testimony and conclusive circumstant ial evidence, as well as eye- witness and 
expert evidence, shall be valid as against other parties, but an admission shall be valid 
against the maker thereof alone.

Article (115)  
Any testimony by which an advantage is gained by or a detriment averted from the witness 
shall be rejected.

Article (116)  
The testimony of a deaf person, and his oath, shall be admitted by his accustomed signs, if 
he is unable to write.  
   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  24

Article (117)  
The burden of proof is upon him who asserts, and the oath (of denial) must be taken by him 
who denies.

Article (118)  
(Independent) evidence must be produced to establish what is contrary to the apparent 
facts, and the oath must be taken to show that the facts presumed to exist are true.

Article (119)  
The oath shall be accepted f rom one who takes it to discharge himself, but not to bind 
another.

Article (120)  
(1)  The oath shall only be taken on the application of the opposing party.  
(2)  It shall be permissible for the judge, of his own motion, to direct that a party take th e 
oath in the following circumstances:  
(a)  if he claims a right in an inheritance and establishes the same, he shall take the oath of 
istithaq to show that he has not received what is due to him from the deceased, and that he has not discharged him, that he has not assigned his rights to another, and that there is no 
pledge in existence as against such right;  
(b)  in the event of proof of his entitlement to property, he shall take the oath to show that 
he has not sold such property or that he has not given it as a gift, or that it has not left his 
possession by any other means;  
(c)  in the event that a sale is rescinded for a defect, he must swear that he did not consent to 
the defect either by word or deed; or  
(d)  in the event of a judgment for a right of pre-emption, he must take the oath to show that 
his right of pre -emption has not lapsed for any reason.  
 
   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  25

Article (121)  
The evidence of a translator registered in the special register shall be accepted, as laid down 
by law.

Article (122)  
Conflicting ev idence shall have no force, but (sic) it shall be of no effect in the judgment of a 
court if it is proved thereafter, and an interested party shall have a claim for indemnity against the witness.  
  
3- Application of the rules of proof

Article (123)  
In the rules and procedures for proof and the adducing of evidence of a right, the Courts 
shall apply the provisions laid down in special laws, to the extent that the same do not conflict with the foregoing provisions.  
 
Book One: Personal obligations and rights  
Section 1: Sources of obligation or personal rights

Article (124)  
Personal obligations or rights shall arise out of dispositions, legal events and the law, and the sources of obligations shall be as follows:-  
1.  contracts;  
2.  unilateral acts;  
3.  acts causing harm (torts);  
4.  acts conferring a benefit; and  
5.  the law.  
 
   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  26 
 Chapter  1: Contracts  
Part  1: General provisions

Article (125)  
A contract is the coming together of an offer made by one of the contracting par ties with the 
acceptance of the other, together with the agreement of them both in such a manner as to 
determine the effect thereof on the subject matter of the contract, and from which results an 
obligation upon each of them with regard to that which each  is bound to do for the other.  
There may be a coincidence of more than two wills over the creation of the legal effect.

Article (126)  
The following may be the subject matter of a contract:  
(a)  property, whether m oveable or immoveable, or corporeal or incorporeal;  
(b)  benefits derived from property;  
(c)  a particular act or service; and  
(d)  any other thing which is not prohibited by a provision of the law and is not contrary to 
public order or morals.

Article (127)  
A contract to do an unlawful thing is unlawful.

Article (128)  
(1)  The general provisions contained in this Part shall apply to nominate and innominate 
contracts.  
(2)  With regard to rules applying to certain contracts only, the special provisi ons governing 
the same shall be laid down in this Law or in other laws.  
  
 
  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  27 
 Part  2: The elements, validity and effect of the contract, and options  
1- The making of the contract

Article (129)  
The necessary elements for the making of a contract are: ‑ 
(a)  that the two parties to the contract should agree upon the essential elements;  
(b)  the subject matter of the contract must be something which is possible and defined or 
capable of being defined and permissible to be dealt in; and  
(c)  there must be a lawf ul purpose for the obligations arising out of the contract.

Article (130)  
A contract shall be made by virtue solely of the confluence of offer and acceptance, subject 
to the specific provisions laid down for the making of the contract by law.

Article (131) 
Both offer and acceptance are any expression of intent used to create a contract.  The first to 
be uttered is the offer, and the second the acceptance.

Article (132)  
An expression of intent may be made orally or in writing, and may be expressed in th e past 
or present tense or in the imperative if the present time is intended or by such means as are 
customary even by a person who is not dumb, or by an interchange of acts demonstrating 
the mutual consent or by adopting any other course in respect of whi ch the circumstances 
leave no doubt that they demonstrate mutual consent.

Article (133)  
The form of acceptance having the purport of a bare promise will give rise to a contract by way of binding promise if such is the intention of both parties.  
   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  28

Article (134)  
(1)  An offer of goods or services accompanied by an indication of the consideration shall be 
regarded as an offer.  
(2)  A publication or advertisement or a current price list or any other statement connected 
with offers or orders directed towards the public or individuals shall not in the event of 
doubt be treated as offers but only as an invitation to enter into a contract.

Article (135)  
(1)  A person who remains silent shall not be deemed to have made a statement, but silence 
in the face o f a circumstance in which a statement is called for shall be regarded as an 
acceptance.  
(2)  In particular, silence shall be deemed to be an acceptance if there has been a prior 
dealing between the contracting parties and the offer is related to such deali ng or if the offer 
will bring about a benefit to the person to whom it is made.

Article (136)  
The contracting parties shall retain the option (to rescind) from the time the offer has been made until the time the majlis ends, and the offer shall be avoided if the offeror retracts it 
after making it and prior to its being accepted by the other side or if either of the contracting parties says or does anything to demonstrate that he is resiling from it, and no acceptance 
made after that shall be of any effec t. 
[Tr: This section embodies the Shari'a concept of "khiyar al -majlis" - literally "the option of 
the session".  This means that while the two parties are still in session, i.e.  they have not 
gone their separate ways, and are still effectively together, each party retains the right to 
revoke any agreement made between them from the moment they came together].

Article (137)  
If the parties concern themselves during the majlis of the contract with extraneous matters, 
that shall be regarded as rejection of the matter in hand.   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  29

Article (138)  
A repetition of the offer prior to acceptance annuls the first offer, and the last made offer 
shall be regarded as the valid one.

Article (139)  
(1)  If a time is fixed for the acceptance to be given, the offeror shall be bound to keep to his 
offer until such time expires.  
(2)  The time may be inferred from the circumstances of the case or from the nature of the 
transaction.

Article (140)  
(1)  The acceptance must coincide with the offer.  
(2)  If the acceptance exceeds the subject matter of the offer or places a restriction on it or 
varies it, that shall be regarded as a rejection containing a new offer.

Article (141)  
(1)  A contract may only be made upon the agreement of the two parties to the essential 
elemen ts of the obligation, and the other lawful conditions which the parties regard as 
essential.  
(2)  If the parties agree on the essential elements of the obligation and the remainder of the 
other lawful conditions which both parties regard as essential and t hey leave matters of 
detail to be agreed upon afterwards but they do not stipulate that the contract shall not be 
regarded as made in the event of absence of agreement upon such matters, the contract 
shall be deemed to have been made, and if a dispute aris es as to the matters which have not 
been agreed upon, the judge shall adjudicate thereon in accordance with the nature of the 
transaction and the provisions of the law. 
  
  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  30

Article (142)  
(1)  A contract made between parties not in each other's presence shal l be deemed to have 
been made at the time and place at which the offeror learns of the acceptance unless there is 
an agreement or a provision of the law to the contrary.  
(2)  The offeror shall be deemed to have learned of the acceptance at the time and pla ce at 
which such acceptance reaches him unless there is evidence to the contrary.

Article (143)  
A contract made by telephone or by any similar means shall be regarded, so far as concerns place, as if it had been made between the contracting parties otherwise than in a single 
majlis with them both present at the time of the contract, and with regard to time, it shall be 
regarded as having been made between those present at the majlis.

Article (144)  
A contract by way of auction shall only be made by the bi d being accepted, and an offer shall 
lapse upon a higher offer being made even though the higher offer may be void, or upon the auction ending without a bid being accepted.

Article (145)  
Acceptance in contracts of adhesion shall be by virtue of simple delivery on conditions similar to those made to all his customers by an offeror who does not accept any negotiation 
about those conditions.

Article (146)  
(1)  An agreement whereby both or one of the contracting parties undertake to make a 
specific contract  in the future may only be made if all of the essential matters of the contract 
intended to be made and the period within which it is to be made are specified.  
(2)  If the law requires that for a contract to be perfected a certain specified form should be 
used, that form must likewise be observed in the agreement containing the promise to make  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  31 
 such contract.

Article (147)  
If a person promises to make a contract and then renegues and is sued by the other person 
for the performance of the promise and the c onditions necessary for the making of the 
contract, in particular the form, are satisfied, the judgment shall, when it becomes final, 
stand as the contract.

Article (148)  
(1)  Payment of earnest money shall be regarded as evidence that the contract has become 
final and irrevocable unless the agreement or custom are to the contrary.  
(2)  If the two parties agree that the earnest money shall be forfeited in the event of 
reneguing, each of them shall have the right to renegue, and if the person who has paid the 
money renegues he shall lose it, and if the person receiving it renegues, he shall pay over 
double that amount.  
 
2- Agency in contracting

Article (149)  
A contract may be made by a principal and it may also be made by an agent unless the law 
stipulates  otherwise.

Article (150)  
(1)  The agency in the contract may be by agreement or by law.  
(2)  The deed of agency {power of attorney) issued by the principal shall specify the extent of 
the powers of the agent if the agency is by agreement, and the law sh all specify such powers 
if the agency is by law. 
  
 
  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  32

Article (151)  
If a person makes a contract on his own and for his own account then he shall be bound by 
the provisions of it to the exclusion of other persons.

Article (152)  
(1)  If a contract is made by means of an agency, it is the person of the agent and not the 
person of the principal to whom regard shall be had when considering defects in consent or 
the effect of knowledge of certain special circumstances or a presumption of knowledge 
thereof.  
(2)  Nevertheless, if the deputy is an agent acting in accordance with specific instructions 
given to him by his principal, the principal may not rely on the ignorance of the agent of 
circumstances of which the principal knew or which he is presumed to have k nown.

Article (153)  
If the agent makes a contract within the limits of his authority in the name of the principal, 
the provisions of that contract and the rights (obligations) arising therefrom shall devolve 
upon the principal.

Article (154)  
If the par ty making a contract does not state at the time the contract is made that he is 
contracting in his capacity as agent, the effect of the contract will not attach to the principal either as obligeee or obligor unless it is conclusively presumed that the pers on with whom 
the agent contracted knew that he was an agent or if it was a matter of indifference for him whether he was contracting with the principal or the agent.  
 
 
  
  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  33

Article (155)  
If the agent and the person contracting with him are both ignorant at t he time the contract is 
made of the agency having been terminated, the effect of the contract made by the agent 
will attach to the principal or his successors.

Article (156)  
It shall not be permissible for a person to contract with himself in the name of  the person for 
whom he is an agent whether the contract is for his own account or for the account of another party without authorisation from the principal, but provided that it is permissible or the principal in that event to approve the contract, having  regard in all of the above to any 
contrary provisions of the law or commercial practice.  
  
3- The capacity to contract

Article (157)  
Every person shall have capacity to contract unless that capacity is taken from him or restricted by operation of law.

Article (158)  
A minor who is not of the age of discretion shall not have the right to deal in his property, 
and all his dealings shall be void.

Article (159)  
(1)  Financial dealings of a minor of the age of discretion shall be valid if they are purely for 
his own benefit, and void if they are purely to his detriment.  
(2)  Dealings falling between pure benefit and pure detriment shall depend upon the 
consent of the guardian within the limits within which it is permissible for him to make 
dispositions either immediately or by ratification by the minor after his attaining the age of 
adulthood.   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  34 
 (3)  The age of discretion shall be 7 complete Hijra years.

Article (160)  
(1)  A guardian may permit a minor who has reached the age of 18 Hijra years to receive all 
or part of his property to administer it.  
(2)  It shall be permissible for the court upon hearing the evidence of the guardian to permit 
a minor who has attained the age of 18 Hijra years to receive all or some of his property to 
administer it.  
(3)  The pro visions relating to the above shall be laid down by law.

Article (161)  
A minor who is authorised to make dealings within the terms of the authorisation shall have the same status as an adult.

Article (162 ) 
It shall not be permissible for a minor whether under guardianship or tutelage to trade 
unless he has attained the age of 18 Hijra years, and the court has given him absolute or 
limited authority so to do.

Article (163)  
(1)  A judge may grant authorisation to a minor of the age of discretion where h is guardian 
has withheld authorisation, and the guardian may impose no restriction upon the minor thereafter.  
(2)  The judge may, after giving authorisation, reimpose the restriction upon the minor.

Article (164)  
The guardian of the property of a minor s hall be first his father then the executor of his 
father then the true grandfather then the judge or the guardian appointed by the judge.   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  35

Article (165)  
The law shall determine the necessary capacity which the guardian must have in order to 
exercise his r ights of guardianship over property.

Article (166)  
Contracts of administration issued by a guardian over the property of a minor shall be valid and effective in accordance with the conditions and provisions laid down by law.

Article (167)  
Dispositions made by the guardian in respect of the property of a minor not falling within 
acts of administration shall be valid and effective in accordance with the provisions and conditions laid down by law.

Article (168)  
(1)  Minors, insane persons and imbeciles shall be ipso facto under a restriction.  
(2)  With regard to idiots and persons under a mental disability, the judge shall impose 
restrictions upon them and lift such restrictions in accordance with the rules and procedures laid down by law.  
(3)  Notice sha ll be given of the restricting order to the persons so restricted, and the reason 
therefor shall be publicly declared.

Article (169)  
Adult insane persons and imbeciles who are under a restriction shall be of the same status as 
a minor of no capacity.  
  
 
  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  36

Article (170)  
(1)  Dispositions made by an idiot or person suffering from a mental disability occurring 
after either an application for a restriction has been made or after an order in that behalf has 
been made or after an application or order for restora tion of guardianship has been made 
shall be subject to the same provisions as govern dispositions made by persons of defective 
capacity.  
(2)  With regard to dispositions made prior to such restriction, they shall not be void or 
voidable unless they result from exploitation or conspiracy.

Article (171)  
(1)  It shall be permissible for the court to permit a person under a restriction on the grounds 
of idiocy or mental disability to have all or part of his property for administration thereof.  
(2)  The law shall lay down provisions in that behalf.

Article (172)  
The laws shall set out the procedures to be followed with regard to restrictions over 
restricted persons, the management and exploitation of their property, and dealing therein, 
and other questions re lating to guardianship, tutelage and protection.

Article (173)  
If a person is deaf and dumb or blind and deaf, or blind and dumb and he is by reason 
thereof unable to express his intent, it shall be permissible for the judge to appoint a judicial 
assistant for him to help him in his dispositions if his interests so require, in such manner as 
is laid down by law.

Article (174)  
Dispositions made by guardians, tutors or protectors shall be valid within the limits laid 
down by law.  
   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  37

Article (175)  
If a pers on of defective capacity uses deceitful means to conceal his defect in capacity, he 
shall be bound to pay compensation.  
  
4- Defects in Consent  
a- Duress

Article (176)  
Duress is coercion of a person without the right of so doing to perform an act without  his 
consent.  Duress may be forcible or non -forcible, and may be material or moral.

Article (177)  
Duress is forcible if it is threat of grave and imminent danger to person or property.  It is 
non -forcible if it involves a lesser threat.

Article (178)  
A threat to cause harm to a person's parents, children, spouse or sibling or a threat of a risk 
prejudicial to honour shall be regarded as duress, and may be forcible or non -forcible as the 
case may be.

Article (179 ) 
Forcible duress nullifies consent and v itiates free choice.  Non -forcible duress nullifies but 
does not vitiate free choice.

Article (180)  
Duress may vary according to different persons, their age, weakness, position, rank, 
influence, the degree to which they are hurt by the duress whether lesser or greater, and by any factor which may affect the seriousness of the duress.  
  
  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  38

Article (181 ) 
In order for there to be duress the person exercising it must be capable of carrying out his 
threat, and the victim must believe that the threat will be car ried out immediately if he does 
not do that which he is coerced into doing.

Article (182)  
A person who exercises either kind of duress to conclude a contract may not enforce his contract, but the contract will be valid if the victim or his heirs so permi t after the threat has 
ceased, either expressly or by their acts.

Article (183)  
If a husband coerces his wife by beating her or forbidding her to see her family or the like, to cede to him a right of hers or to give him property, the disposition will not  be effective.

Article (184)  
If the duress is exercised otherwise than by one of the contracting parties, the person 
coerced into contracting may not claim that the contract is ineffective unless he proves that 
the other contracting party knew or is pres umed to have known of the duress.  
  
b- Deception and cheating

Article (185)  
Misrepresentation is when one of the two contracting parties deceives the other by means of trickery of word or deed which leads the other to consent to what he would not otherwise 
have consented to.  
  
 
  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  39

Article (186)  
Deliberate silence concerning a fact or set of circumstances shall be deemed to be a 
misrepresentation if it is proved that the person misled thereby would not have made the 
contract had he been aware of that fact or set of circumstances.

Article (187)  
If one of the contracting parties makes a misrepresentation to the other and it transpires that 
the contract was concluded by a gross cheat, the person so misled may cancel the contract.

Article (188 ) 
Gross cheating involving land or otherwise is a bargain which no ordinary person 
conversant with that market could contemplate as reasonable.

Article (189 ) 
If the cheating, however, slight, affects the property of a person under judicial restriction on 
account of a debt or a terminally ill person, and that person's liabilities exceed his assets, the 
contract shall be dependent upon the cheating being redressed, or the consent of the 
creditors, otherwise it shall be void.

Article (190 ) 
If the misrepresentation is made by a person other than the contracting parties, and the 
person to whom the misrepresentation was made proves that the other contracting party 
knew of the misrepresentation, it shall be permissible for him to cancel the contract.

Article (191 ) 
A contract may not be cancelled on the basis of a gross cheat in the absence of 
misrepresentation save in respect of property of a person under restriction, waqf property, 
and property of the State.   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  40

Article (192 ) 
The right to cancel for misrepresentation and gross ch eat shall lapse on the death of the 
person having the right to apply for the cancellation or upon a dealing made in the subject 
matter of the contract in whole or in part in such a way as implies consent, or if the property is destroyed while in the posses sion of the person who would otherwise have such right, or 
if he consumes it, damages it, or increases it.  
  
c- Mistake

Article (193 ) 
No regard shall be had for any mistake save in so far as it is contained in the form of the contract or demonstrated by th e surrounding circumstances and conditions, or the nature of 
things, or custom.

Article (194)  
If there is a mistake as to the identity of the contract or as to one of the conditions upon 
which it is made or as to the subject matter of the contract, the contract shall be void.

Article (195)  
A contracting party shall have the right to cancel the contract if he has made a mistake in a 
desired (non -essential) matter such as a characteristic of the subject matter of the contract or 
the identity of the other  contracting party or as to a characteristic of such person.

Article (196)  
A contracting party shall have the right to cancel the contract if he makes a mistake of law and the conditions relating to a mistake of fact under Articles 193 and 195 are satisfied, 
unless the law provides otherwise.  
 
   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  41

Article (197)  
A mere mistake in an account or in a writing shall not affect the contract, and it shall simply 
be rectified.

Article (198)  
A person who has made a mistake may not rely on it in a manner inconsiste nt with good 
faith.  
  
5- The subject matter and purpose of the contract  
a- The subject matter of the contract

Article (199)  
Every contract must have a subject matter to which it attaches.

Article (200)  
(1)  In transactions involving property, the subject matter of the contract must be property 
which may lawfully be dealt in.  
 (2)  The subject matter may be specific property or a benefit or any other right in property, 
and likewise the subject matter may be an act or refraining from an act.

Article (201) 
If the subject matter is inherently impossible at the time the contract is made, the contract shall be void.

Article (202)  
(1)  A future thing may properly be the subject matter of commutative contracts involving 
property, in the absence of uncertainty  (Gharar see Chapter IV of Book Two).  
(2)  It shall not, however, be permissible to deal in the after death estate of a person still  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  42 
 living notwithstanding that that person may have consented, save in the cases provided for 
by law.

Article (203)  
(1)  In commutative contracts involving property the subject matter must be specified in 
such a way as to avoid gross uncertainty by reference to it or to the place where it is if it is in 
existence at the time of the contract or a statement of its distinguishing  character­istics, and 
the amount thereof must be stated if it is measurable property or the like, so as to avoid 
gross uncertainty.  
(2)  If the subject matter is known to both contracting parties there is no requirement that it 
should be otherwise described or defined.  
(3)  If the subject matter is not specified as aforesaid, the contract shall be void.

Article (204)  
If the subject matter of the disposition or the consideration therefor is money, its amount and type must be specified without any increase or decrease in the value of that money at 
the time of payment having any effect.

Article (205)  
(1)  The subject matter must be such as falls within the ambit of a contract.  
(2)  If the law prohibits dealing in a thing or if it is contrary to public order or morals, the 
contract shall be void.

Article (206)  
The contract may be accompanied by a condition confirming its purport or consistent with it or in accordance with usage and custom or containing an advantage to one of the 
contracting parties or a t hird party, provided that in the case of all of the foregoing it is not 
prohibited by law or contrary to public order or morals, otherwise the condition shall be 
void and the contract shall be valid, unless the condition is the inducement to make the  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  43 
 contr act, in which case the contract also shall be void. 
  
b- The purpose of the contract

Article (207)  
(1)  The reason is the direct purpose aimed at by the contract.  
(2)  The reason must be existent, valid, and permitted, and not contrary to public order or 
morals.

Article (208)  
(1)  The contract shall not be valid if it does not contain a lawful benefit to both contracting 
parties.  
(2)  A contract shall be presumed to contain such lawful benefit unless there is evidence to 
the contrary.  
  
6- Valid, void a nd defective contracts 
a- The valid contract.

Article (209)  
A valid contract is a contract which is lawful in its essence and description, being made by a 
competent person in respect of a subject matter properly falling within the ambit of a contract, havi ng an existing, valid and lawful purpose and in proper form, and 
unaccompanied by any vitiating condition.  
  
b- The void contract

Article (210) 
(1)  A void contract is one which is unlawful in its essence and form, lacking the elements of 
a contract or defective in its subject matter or purpose or form as laid down by law for the 
making of a contract, and such contract shall be of no effect and shall not be capable of 
being rectified by consent.   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  44 
 (2)  Any person having an interest may rely on the voidness of the contract and a judge may 
so rule of his own motion.  
(3)  No claim (for a declaration) that a contract is void shall be heard after the expiry of 15 
years from the date the contract was made, but any person having an interest may raise the 
defence of  the voidness of the contract at any time.

Article (211)  
(1)  If part of a contract is void the entire contract shall be void unless the subject matter of 
each part is (separately) specified in which case it shall be void as to the void part, and the 
rem ainder shall be valid.  
(2)  If part of a contract is dependent upon the grant of a consent, then if the consent is given 
the whole contract will be effective and if the consent is not given only that part will be void 
together with the consideration theref or, and the remainder of the contract with its 
consideration will be valid.  
  
c- The defective contract

Article (212)  
(1)  A voidable contract is one which is lawful in its essence but not in form, and if the cause 
of the voidability is removed, the contra ct shall be valid.  
(2)  A transfer of ownership under a voidable contract shall only be effective if the property 
itself has been received.  
(3)  A voidable contract shall only have effect within the area laid down by the provisions of 
the law.  
(4)  Each o f the parties to the contract and their heirs shall have the right to cancel the 
contract after giving notice to the other contracting parties.  
  
 
 
  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  45 
 7- Suspended and non- binding contracts  
a- The suspended contract

Article (213)  
A disposition shall be dependent for the effectiveness thereof upon ratification if it is made 
by a volunteer in respect of property belonging to another or by an owner in respect of 
property of his encumbered by a third party right or by a person lacking capacity in respect 
of his own property, where such transaction lies in the area between (pure) advantage and 
(pure) detriment or is made under duress, or if the law so provides.

Article (214)  
The right to grant or withhold consent to the contract shall be that of the owner or th e 
person in whose favour the right over the thing contracted for exists, or in the tutor or 
guardian, or in the person of defective capacity after the defect has been remedied, or the 
person who has suffered duress after the duress has been removed, or suc h person to whom 
the law gives that power.

Article (215)  
(1)  Consent may be by any act or word indicating the same expressly or by implication.  
(2)  Silence shall be taken to be consent if by custom it indicates consent.

Article (216)  
It is a condition of the validity of the consent that the disposition should have been one 
capable of  being consented to at the time it was made and at the time the consent is given, 
and it is likewise a condition that at the time the consent is given, th ere should be in 
existence the person who had the right to give the consent, the two parties to the contract, the subject matter of the contract, or a substitute therefor if it is a specified thing.  
  
  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  46

Article (217)  
(1)  If consentis given to a suspended t ransaction, it shall become effective retroactively to 
the time it was made, and the subsequent consent shall have the same effect as a prior 
agency.  
(2)  If consent is refused, the disposition shall be void.  
  
b- The non- binding contract

Article (218)  
(1) A contract shall not be binding on one or both of the contracting parties despite its 
validity and effectiveness if there is a condition that such party may cancel it without mutual 
consent or an order of the court.  
(2)  Each party may act unilaterally i n cancelling it if by its nature the contract is not binding 
upon him or if he has made it a condition in his own favour that he has the option to cancel.  
 
8- Options affecting the binding nature of the contract  
a- The option of conditionality

Article (219 ) 
In binding contracts which are liable to be cancelled it shall be permissible for the 
contracting parties or either of them to make it a condition in the contract or thereafter that he should enjoy the benefit of the option of conditionality in his own o r another's favour for 
such period as may be agreed between the parties, and if they do not agree on a particular 
period, it shall be permissible for the judge to specify that period in accordance with custom.  
  
 
 
 
  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  47

Article (220)  
If each of the two contracting parties has the advantage of the benefit of conditionality in 
commutative contracts involving property and the consideration on both sides has not left 
the ownership of either of the contracting parties but one then exercises  the option to 
cancel, that property shall not pass out of his ownership neither shall the property of the 
other pass into the ownership of the first.

Article (221)  
(1)  The person having the benefit of the option of conditionality shall have the right t o 
cancel or to affirm the contract.  
(2)  If he elects to confirm the contract, it shall become binding with retroactive effect to the 
date on which it was made, and if he elects to cancel it, the contract shall be cancelled and 
deemed void ab initio.

Article (222 ) 
If both of the contracting parties have the advantage of the option of conditionality and one of them elects to cancel the contract, the contract shall be cancelled notwithstanding that 
the other may have affirmed, and if one affirms the contrac t the other shall retain his option 
to cancel throughout the period laid down for the option.

Article (223)  
(1)  Cancellation or affirmation may take place by any act or word indicating the same, 
whether expressly or by implication.  
(2)  If the period expires without the option to cancel or to affirm being exercised, the 
contract shall become binding.  
 
 
 
   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  48

Article (224)  
(1)  In order for the cancellation to be valid, the option in that behalf must have been 
exercised within the period thereof and the other party notified thereof if the cancellation is 
effected by words and is not dependent on mutual consent or an order of the court.  
(2)  With regard to affirmation, it is not a requirement (of the contract becoming binding) 
that the other party should know of it.

Article (225 ) 
The option shall lapse upon the death of the person entitled to exercise it during the period 
thereof.  The contract shall become binding with regard to his heirs, and the other party shall 
retain his option, if he originally had an option, until the expiry of the period thereof.  
  
b- The option to inspect

Article (226)  
The option to inspect shall arise in c ontracts liable to cancellation in favour of the person to 
whom the disposition is made even though not expressly stipulated if the subject matter of 
the contract has not been seen, and is specified.

Article (227)  
The option to inspect shall remain until  the inspection is carried out within the agreed 
period, or until anything occurs which causes it to lapse.

Article (228)  
The option to inspect shall not prevent the contract becoming effective but will only prevent 
it becoming binding on the person in whose favour the option exists.  
  
  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  49

Article (229)  
(1)  The option to inspect shall not lapse by non -exercise.  
(2)  The option will lapse upon the inspection of the thing contracted for and its acceptance 
whether expressly or by implication, and it will likewise lapse upon the death of the person 
having the option, the destruction of the goods concerned, whether in whole or in part, or by 
their becoming defective, or the disposition thereof by a person having the right so to do by 
way of a disposition which may not be cancelled, or in such a way as gives rise to a right in a 
third party.

Article (230 ) 
Cancellation under the option to inspect may be by any act or word indi cating the same 
whether expressly or by implication, but on condition that the other contracting party is aware thereof.  
  
c-The option to specify (one out of two or more potential objects of the 
contract)

Article (231)  
It shall be permissible to agree tha t the subject matter of the contract shall be one of two or 
three things, and that one of the contracting parties should have the right to choose between 
them on condition that the consideration for each and the period of the option is expressed.

Article (232)  
If the contracting parties do not specify the period of the option or if the period laid down for 
one of them to exercise it expires without the election being made, it shall be permissible for 
the other party to apply  to the judge to fix the period of the option or to determine the 
subject matter of the disposition.  
 
   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  50

Article (233)  
The contract shall not be binding upon the person having the right to exercise the option 
until that right is exercised, and if the option is exercised expressly or by implication the 
contract shall become binding and effective in connection with the subject matter over which the option is exercised.

Article (234)  
The exercise of the option shall relate back to the time the contract came into existence.

Article (235 ) 
(1)  If the option to select is vested in a purchaser and one of the two things is lost while in 
the hands of the seller, the purchaser shall have the option if he so wishes to take the other 
thing at its price or to leave it, but if both things are lost,  the sale shall be void.  
If the loss takes place after the purchaser has received the things to be sold and one of the two things is lost while in the hands of the purchaser, that thing shall be designated as the 
thing sold and the purchaser shall be bound  to pay the price, and the other thing shall be 
regarded as being held in trust.  
If the two things are lost in succession, the first shall be regarded as the thing sold and the second as held in trust, and if they are lost simultaneously the purchaser shal l be bound to 
pay half the price of each.  
(2)  If the option to appoint is vested in the seller and one of the things is lost before or after 
receipt, the seller shall have the right to elect either that the purchaser shall be bound to take 
the remaining t hing or that the contract be cancelled, and if both things are lost before 
receipt, the contract shall be void.  
If the two things are lost in succession after receipt, the first thing lost shall be regarded as 
held in trust and the second as the thing sold, and if they are lost at the same time, the purchaser shall be bound to pay half the price of each.  
  
  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  51

Article (236)  
If the person having the option to appoint dies during the period of the option, his right shall 
be transferred to his heirs.  
 
d- The o ption to reject for defects

Article (237 ) 
Contracts capable of being cancelled shall carry with them the right to cancel the contract 
under the defects option without there being a condition in that behalf in the contract.

Article (238 ) 
In order for a defect to give rise to an option to reject, it must be old (pre- existing), it must 
affect the value of the subject matter of the contract, it must be unknown to the purchaser, and the seller must not have contracted for an exemption from liability in respect  of it.

Article (239 ) 
(1)  If the conditions set out in the preceding Article are satisfied in respect of a defect, the 
contract is not binding on the person having the right to exercise the option before taking delivery, and is liable to cancellation th ereafter.  
(2)  The contract will be cancelled prior to taking delivery by any matter demonstrating the 
same, without the need for mutual agreement or an order of the court on condition that the other party is aware (of the cancellation), but after delivery  has been taken cancellation 
must be by mutual consent or by order of the court.

Article (240)  
If a contract is cancelled by reason of a defect, the subject matter of the contract is to be returned to the owner, and the price paid is recoverable.  
  
   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  52

Article (241)  
(1)  The option to reject for a defect shall lapse by non -exercise or by acceptance of the 
defect after knowledge thereof, by dealing in the thing contracted for even prior to such 
knowledge, by its being destroyed or damaged after receipt or by  its being increased prior to 
receipt by way of direct connection with the thing, not arising from the thing itself, by the act 
of the purchaser, or after receipt by way of a single increase arising out of the thing itself.  
(2)  The option to reject for a defect shall not lapse by reason of the death of the person 
having that option, but shall enure to the benefit of his heirs.

Article (242 ) 
The person having the option to reject for a defect may also retain the thing contracted for and claim for the redu ction in value.  
  
Part  3: The effects of the contract  
1- With regard to the contracting parties

Article (243) 
(1)  The contract shall apply to the subject matter of the contract and the consideration 
therefor as soon as the contract is made, and shall not depend upon receipt or any other 
thing unless the law provides otherwise.  
(2)  With regard to the rights (obligations) arising out of the contract, each of the contracting 
parties must perform that which he is obliged to do under the contract.

Article (244 ) 
In the case of commutative contracts for specific property, provided the conditions for the validity thereof are satisfied, each of the contracting parties must have an established right 
to dispose of the property, and each shall have an obligation to deliver the subject matter of 
the contract to the other.  
    
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  53

Article (245 ) 
In the case of commutative contracts to derive benefits from property, provided the 
conditions for the validity thereof are satisfied, the person dealing in the property shall have 
the obligation to deliver it to the usufructuary, and the usufructuary shall have the obligation to deliver the consideration for the benefit to the owner of the property.

Article (246 ) 
(1)  The contract must be performed in accordance with its contents,  and in a manner 
consistent with the requirements of good faith.  
(2)  The contract shall not be restricted to an obligation upon the contracting party to do that 
which is (expressly) contained in it, but shall also embrace that which is appurtenant to it b y 
virtue of the law, custom, and the nature of the transaction.

Article (247 ) 
In contracts binding upon both parties, if the mutual obligations are due for performance, 
each of the parties may refuse to perform his obligation if the other contracting par ty does 
not perform that which he is obliged to do.

Article (248 ) 
If the contract is made by way of adhesion and contains unfair provisions, it shall be 
permissible for the judge to vary those provisions or to exempt the adhering party therefrom 
in accor dance with the requirements of justice, and any agreement to the contrary shall be 
void.

Article (249 ) 
If exceptional circumstances of a public nature which could not have been foreseen occur as 
a result of which the performance of the contractual obliga tion, even if not impossible, 
becomes oppressive for the obligor so as to threaten him with grave loss, it shall be permissible for the judge, in accordance with the circumstances and after weighing up the  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  54 
 interests of each party, to reduce the oppressive obligation to a reasonable level if justice so 
requires, and any agreement to the contrary shall be void.  
 
2- With regard to third parties

Article (250 ) 
The effects of the contract shall extend to the contracting parties and their general 
successors witho ut prejudice to the rules relating to inheritance, unless it appears from the 
contract or from the nature of the transaction or from the provisions of the law that the effects were not to extend to a general successor.

Article (251 ) 
If the contract gives  rise to personal rights connected with a thing transferred thereafter to a 
special successor, such rights shall be transferred to such successor at the time at which the 
thing is transferred if it is one of the appurtenances thereof and the special successor was 
aware of those rights at the time of the transfer of the thing to him.

Article (252 ) 
A contract may not impose an obligation upon a third party but it may create a right in him.

Article (253 ) 
(1)  If a person undertakes to procure a third party  to enter into an obligation the third party 
will not be bound by that undertaking, and if the third party refuses to be bound the person making the undertaking must compensate the other contracting party.  
He may nevertheless be released from having to mak e compensation by himself performing 
the obligation in respect of which he gave the undertaking.  
(2)  If however the third party agrees to the undertaking, his agreement shall take effect only 
from the time it was given, unless it appeared that he expressl y or impliedly intended that 
the effect of the agreement should relate back to the time the undertaking was made.  
   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  55

Article (254 ) 
(1)  It shall be permissible for a person to contract in his own name imposing a condition 
that rights are to enure to the ben efit of a third party if he has a personal interest, whether 
material or moral, in the performance thereof.  
(2)  Such a condition shall confer upon the third party a direct right against the undertaker 
for the performance of that condition in the contract enabling him to demand the 
performance thereof unless there is a contrary agreement, and such undertaker may rely as 
against the beneficiary on any defences arising out of the contract.  
(3)  The person making the condition may also demand the performance of the condition in 
favour of the beneficiary, unless it appears from the contract that the beneficiary alone has 
such a right.

Article (255 ) 
(1)  The person imposing that condition in the contract, but not his obligees or heirs, may 
cancel that condition  before the beneficiary gives notice to the undertaker or the person 
imposing the condition of his intention to benefit thereby, unless that is contrary to the 
purport of the contract.  
(2)  The cancellation of the condition shall not relieve the undertaker  of his obligation to the 
party imposing it unless there is an express or implied agreement to the contrary.  
The person imposing the condition may replace the first beneficiary by another, and he may 
also allocate the benefit of the condition for himself.

Article (256 ) 
In imposing a condition in favour of a third party it shall be permissible for the beneficiary to be a future person or future body, and the beneficiary may also be a person or body not 
specified at the time the contract is made if such ben eficiary is ascertainable at the time the 
contract is to be given effect to in accordance with the condition.  
 
 
   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  56 
 Section 4 : The construction of contracts

Article (257 ) 
The basic principle in contracts is the consent of the contracting parties and that whi ch they 
have undertaken to do in the contract.

Article (258 ) 
(1)  The criterion in (the construction of) contracts is intentions and meanings and not words 
and form.  
(2)  The primary rule is that words have their true meaning and a word may not be 
construed figuratively unless it is impossible to give it its direct meaning.

Article (259 ) 
There shall be no scope for implications in the face of clear words.

Article (260 ) 
Words should be given effect to rather than ignored, but if it is impossible to give effect to 
words, they shall be ignored.

Article (261 ) 
Reference to part of an indivisible shall count as reference to the whole.

Article (262 ) 
An unconditional provisi on shall be so construed unless there is evidence, whether textual 
or circumstantial, restricting it.

Article (263 ) 
A description of that which is present is a superfluity, but a description of that which is absent shall have effect.  
   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  57

Article (264 ) 
Known custom as between merchants shall have the effect of (express) conditions made 
between them.

Article (265 ) 
(1) If the wording of a contract is clear, it may not be departed from by way of interpretation to ascertain the intention of the parties. 
(2) If there is scope for an interpretative construction of the contract, an enquiry shall be made into the mutual intentions of the parties beyond the literal meaning of the words, and 
guidance may be sought in so doing from the nature of the transaction, a nd the trust and 
confidence which should exist between the parties in accordance with the custom current in (such) dealings.

Article (266 ) 
(1) A doubt shall be resolved in favour of the obligor.  
(2) Nevertheless it shall not be permissible to construe ambiguous words in contracts of 
adhesion in a manner detrimental to the interests of the adhering party. 
  
Part 5: The dissolution of a contract  
1- General provisions

Article (267 ) 
If the contract is valid and binding, it shall not be permissible for either of the contracting 
parties to resile from it, nor to vary or rescind it, save by mutual consent or an order of the 
court, or under a provision of the law.

Article (268 ) 
The contracting parties may mutually revoke the contract by their mutual consent after it 
has been concluded.  
   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  58

Article (269 ) 
So far as concerns the contracting parties revocation amounts to cancellation, and with 
regard to a third party amounts to a new c ontract.

Article (270 ) 
Revocation shall be by offer and acceptance in the session (majlis), and by receiving (back 
the thing contracted for) on condition that the subject matter of the contract is in existence 
and in the possession of the contracting par ty at the time of the revocation, and if part of it 
has been lost the revocation shall be valid as to the remainder to the extent of the amount of 
the consideration attributable to it.

Article (271 ) 
It shall be permissible to agree that a contract shall be regarded as being cancelled 
spontaneously (automatically) without the need for a judicial order failing performance of 
the obligations arising thereout, and such agreement shall not dispense with notice unless 
the contracting parties have expressl y agreed that it should be dispensed with.

Article (272 ) 
(1) In contracts binding on both parties, if one of the parties does not do what he is obliged to do under the contract, the other party may, after giving notice to the obligor, require that 
the contract be performed or cancelled.  
(2) The judge may order the obligor to perform the contract forthwith or may defer (performance) to a specified time, and he may also order that the contract be cancelled and 
compensation paid in any case if appropriate.

Article (273 ) 
(1) In contracts binding on both parties, if force majeure supervenes which makes the performance of the obligation impossible, the corresponding obligation shall cease, and the 
contract shall be automatically cancelled.   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  59 
 (2) In the case of partial impossibility, that part of the contract which is impossible shall be 
extinguished, and the same shall apply to temporary impossibility in continuing contracts, 
and in those two cases it shall be permissible for the obligee to ca ncel the contract provided 
that the obligor is so aware.  
  
2- The effects of dissolution of the contract

Article (274 ) 
If the contract is cancelled automatically or by the act of the parties, the two contracting parties shall be restored to the position th ey were in before the contract was made, and if 
that is not possible, compensation shall be ordered.

Article (275 ) 
If the contract is dissolved by reason of voidness or cancellation or through any other cause 
and each of the parties is obliged to return that which he has obtained, it shall be permissible 
for each of them to detain what he has received so long as the other party has not returned 
what he has received from the former, or provided security for such return.  
  
Part 2 : Unilateral dispositions

Article (276 ) 
It shall be permissible for a disposition to take place through the unilateral intention of the disponor without depending on the acceptance of the disponee unless a third party becomes obligated in any respect as laid down in the law, provided that there is no provision 
in the law to the contrary.

Article (277 ) 
The provisions relating to contracts shall apply to unilateral acts with the exception of those 
provisions relating necessarily to the existence of a mutual corresponding intention to 
establish a contract, unless the law provides to the contrary.  
   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  60

Article (278 ) 
If the elements and conditions of a unilateral disposition are satisfie d, it shall not be 
permissible for the disponor to resile from it, unless the law provides to the contrary.

Article (279 ) 
(1) If the unilateral disposition amounts to a passing of property, then it shall only be 
effective with regard to the disponee upon  his acceptance thereof.  
(2) If the act is a waiver amounting to a passing of property or a discharge from an 
obligation, it shall be effective with regard to the disponee but may be retracted during the 
time of the majlis.  
(3)  If the act is a pure waiver , it shall be effective with regard to the disponee and may not be 
retracted.  
(4)  All of the above is subject to any provision of the law to the contrary.

Article (280 ) 
(1) A promise is something imposed by a person on himself in favour of another relat ing to 
the future, otherwise than by way of an obligation with regard to property, and it may be for 
a contract or to do an act.  
(2) A promise binds the maker unless he dies or becomes bankrupt.

Article (281 ) 
(1) Whoever promises a prize to the public for performing a particular act and fixes a time limit for it shall be bound to give the prize to the person who performs that act notwithstanding that the act was performed without regard to the promise of the prize.  
(2) If the promisor does not fix a time limit for the performance of the act it shall be permissible for him to resile from his promise by a public notice but provided that that shall 
not affect the rights of a person who has performed the act prior to the revocation of the 
promise.  No claim fo r the prize shall be heard unless it is brought within three months from 
the date of notice being given of the revocation of the promise.   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  61 
 Chapter Three:  Acts causing harm  
Part 1: General provisions

Article (282 ) 
Any harm done to another shall render the act or, even though not a person of discretion, 
liable to make good the harm.

Article (283 ) 
(1) Harm may be direct or consequential.  
(2) If the harm is direct, it must unconditionally be made good, and if it is consequential 
there must be a wrongful or deliberate element and the act must have led to the damage.

Article (284 ) 
If the harm is both direct and consequential, the rules rela ting to direct harm shall apply.

Article (285 ) 
If a person deceives another he shall be liable to make good the harm resulting from that 
deception.

Article (286 ) 
No person who has been caused loss in his property by another may cause that other loss in  
his property, otherwise each shall be bound to make good the loss he has caused to the 
other.

Article (287 ) 
If a person proves that the loss arose out of an extraneous cause in which he played no part 
such as a natural disaster, unavoidable accident, fo rce majeure, act of a third party, or act of 
the person suffering loss, he shall not be bound to make it good in the absence of a legal 
provision or agreement to the contrary.   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  62

Article (288 ) 
Any person who causes damage in the c ourse of lawful defence of himself, his honour, or his 
property, or the defence of the person, honour or property of another, shall not be 
responsible for such damage provided that he has done no more than was necessary, otherwise he shall be bound to make good the excess.

Article (289 ) 
(1) The act shall be regarded as being that of the actor and not of the person who ordered him to do it unless the actor is so compelled, provided that for there to be compulsion in respect of a physical act it must amount to forcible duress and no less.  
(2)  Nevertheless a public servant shall not be liable for his acts causing harm to others if he 
performed them in execution of an order given to him by his superior, and he is obliged to obey such order, or believed that h e had to do so, and if he provides evidence of his belief in 
the lawfulness of the act which he does, such belief being based on reasonable grounds, and provided that he acts with prudence and caution.

Article (290 ) 
It shall be permissible for the judge to reduce the level by which an act has to be made good or to order that it need not be made good if the person suffering harm participated by his 
own act in bringing about or aggravating the damage.

Article (291 ) 
If a number of persons are responsible f or a harmful act, each of them shall be liable in 
proportion to his share in it, and the judge may make an order against them in equal shares 
or by way of joint or several liability.  
  
 
 
  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  63

Article (292 ) 
In all cases the compensation shall be assessed on the  basis of the amount of harm suffered 
by the victim, together with loss of profit, provided that that is a natural result of the harmful 
act.

Article (293 ) 
(1) The right to have damage made good shall  include moral damage, and an infringement 
of the liberty, dignity, honour, reputation, social standing or financial condition of another shall be regarded as being moral damage.  
(2)  It shall be permissible for an order to be made by way of compensation f or moral 
damage caused to a spouse, or relatives of the family, by reason of the death of the victim.  
(3)  The right to receive compensation for moral damage may not be transferred to a third 
party unless the amount of it has been fixed by agreement or by a final judicial order.

Article (294 ) 
The compensation may be made payable by instalments or by of a regular income, and in those events the obligor may be ordered to provide a guarantee assessed by the judge, or 
acceptable security.

Article (295) 
The compensation shall be assessed in money, but provided that the judge may, according 
to the circumstances and upon the application of the victim, order that the plaintiff be 
restored to his former position, and he may also order that a specific act connected with the harmful act be performed by way of making good.

Article (296 ) 
Any condition purporting to provide exemption from liability for a harmful act shall be void.  
  
  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  64

Article (297 ) 
Civil liability shall be without prejudice to criminal liability provided that the elements of 
criminal liability are present, and no criminal penalty shall limit the scope of the civil liability 
or the assessment of the compensation.

Article (298 ) 
(1) No claim for compensation arising out of a harmful act shall be hear d after the expiration 
of three years from the day on which the victim became aware of the occurrence of the harm and of the identity of the person responsible for it.  
(2)  Provided that if such claim arises out of a crime and the criminal proceedings are still 
current after the expiry of the time limit referred to in the foregoing paragraph, the claim for 
compensation shall not be barred.  
(3)  No claim for compensation shall be heard in any case upon the expiration of fifteen 
years from the day on which th e harmful act took place.  
  
Part  2: Liability for personal acts  
1- Harm done to the person

Article (299 ) 
Compensation shall be payable for any harm caused to a person.  Provided that in cases in 
which the diya (blood money) or arsh (shari'a damages for pe rsonal injury not resulting in 
death) are payable, they shall not be payable in addition to such compensation unless the 
parties agree to the contrary.  
  
2- Damage to property

Article (300 ) 
Whoever destroys or damages property of another shall be obliged to make it good in kind if it can be so made good, and to pay the value thereof otherwise, subject to the general 
provisions relating to indemnification.   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  65

Article (301 ) 
If the damage is partial, the person causing it shall be bound to make good the decrea se in 
value, and if the decrease in value is serious (gross) the owner of the property may elect 
between taking the equivalent of the decrease in value, or abandoning the damaged 
property and taking the (full) value thereof, subject to the general provisions relating to 
indemnification.

Article (302 ) 
(1) If a person damages the property of another in the belief that if it is his own, he shall be bound to make good the loss.  
(2)  If a person damages the property of another with the permission of the owner thereof, 
he shall not be bound to make good the loss.

Article (303 ) 
If a minor, whether of discretion or not, or any person of similar status, damages the property of another, he shall be bound to make it good out of his own property.  
  
3- Expropriation  and trespass to goods

Article (304 ) 
(1) The hand shall be bound to restore that which it has taken, and shall remain bound until it does so.  
(2) Whoever misappropriates property belonging to another must restore it to that other in 
the condition it was in  when, and at the same place where, the misappropriation took place.  
(3)  If (the tortfeasor) has consumed or damaged the goods or if they have diminished or 
been damaged either with or without a wrongful act on his part, he must make good in kind or in va lue as at the day and place of misappropriation.  
(4)  He must also hand over any benefits or increase he has obtained from such property. 
   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  66

Article (305 ) 
If a person damages misappropriated goods in the hands of the misappropriator, the person 
from whom th e goods have been misappropriated shall have an election whether to make 
the misappropriator liable, and the latter may have recourse against the person who caused 
the damage, or he may, if he wishes, impose the liability on the person causing the damage, 
in which case the person causing the damage will not have any recourse against the 
misappropriator.

Article (306 ) 
If the misappropriator disposes of the goods misappropriated by way of commutative 
contract or by way of gift and the goods misappropriated are lost in whole or in part in the 
hands of the person to whom the misappropriator made the disposition, the person from 
whom the goods have been misappropriated may elect to make either of them liable, and if 
he elects to make the misappropriator liable his disposition shall be valid, and if he elects to 
make the person to whom the misappropriator has made the disposition liable, such person 
shall have a right of recourse against the misappropriator in accordance with the provisions 
of the law.

Article (307 ) 
(1) A person who misappropriates goods from a misappropriator shall himself be regarded 
as a misappropriator.  
(2)  If the misappropriator from a misappropriator returns the goods misappropriated to the 
first misappropriator, he alone shall be dischar ged of liability, and if he returns the goods to 
the person from whom they were misappropriated both he and the original misappropriator 
shall be discharged.  
(3)  If the goods become damaged in the hands of a mis ­appropriator from a 
misappropriator, the pe rson from whom they have been misappropriated shall have an 
election whether to make the first misappropriator or the second misappropriator liable.  
He may also make the first liable for part and the second liable for part, and if he makes the  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  67 
 first misapp ropriator liable, such person shall have a right of recourse against the second 
misappropriator, and if he makes the second misappropriator liable, the last mentioned 
person shall have no right of recourse against the first.

Article (308 ) 
The judge may i n all cases order the misappropriator to pay such compensation as he thinks 
appropriate if in his opinion that course is justified.

Article (309 ) 
If a person has goods in his possession by way of trust and he is guilty of a default in preserving them, or  is guilty of a wrong -doing in respect of them or refuses to return them to 
the owner without right, or if he wrongfully asserts that they are his own, or if he dies and it 
is not known where the goods are, he shall be liable to return similar goods or the value 
thereof as the case may be.

Article (310 ) 
Whoever steals goods or seizes them by violence or takes goods must return them to their 
owner if they are still in existence, or must return similar goods or the value thereof if the 
goods are no longer a vailable, notwithstanding that a criminal penalty may have been 
imposed upon him.

Article (311 ) 
(1) If goods misappropriated change of their own, then the person from whom they have been misappropriated may elect between the recovery of those same goods,  or a 
replacement thereof.  
(2)  If goods misappropriated change in such a way that they become of a different 
description, (the misappropriator) shall be liable to make a replacement.  
(3)  If goods misappropriated change by reason of a misappropriator havi ng added 
something of his own to them, the person from whom they have been misappropriated may  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  68 
 elect between paying the value of the increase and recovering the goods misappropriated in 
specie, or making the misappropriator liable to provide a replacement.  
(4)  If the goods misappropriated suffer a decrease in value as a result of the use made by the 
misappropriator, the misappropriator must return those same goods and shall be liable for 
the shortfall in value.

Article (312)  
Any act of the same nature as misapprop­ riation shall be treated as misappropriation.  
  
Part  3: Liability for the acts of others

Article (313 ) 
(1) No person shall be liable for the act of another person, but nevertheless the judge may, 
upon the application of an injured party and in the event that in his opinion there is 
justification for taking that course, render any of the following persons liable as the case may 
be to satisfy any amount awarded against a person who has caused the harm:  
(a)  any person who by law or by agreement is obliged to supervise a person who requires 
supervision by virtue of his being an infant or by reason of his mental or physical condition, unless it is proved that he carried out his duty of supervision or that the damage would 
necessarily have occurred even if that duty had been carried out with the proper care; or  
(b)  any person who has actual control, by way of supervision and direction, over a person 
who has caused the damage, notwithstanding that he may not have had a free choice, if the 
act causing ha rm was committed by a person subordinate to him in or by reason of the 
execution of his duty.  
(2)  Any person obliged to make good may have a recourse against the person against whom 
the original award was made.  
  
  
  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  69 
 Part  4: Liability for animals and objec ts, and use of public roads  
1- Damage done by animals

Article (314 ) 
Acts done by animals shall be regarded as inevitable, but that which they do shall be made 
good by the person having control of the animals, whether he is the owner or not, if he has 
been in default or guilty of a wrongdoing.  
  
2- Collapse of buildings

Article (315 ) 
(1) Harm done to a third party by reason of the collapse of a building whether in whole or in 
part shall be made good by the owner of the building or the person having control over it 
unless it is proved that he was not guilty of any wrongdoing or default.  
(2)  Any person who is threatened with harm which may befall him from a building may 
require the owner to take the necessary measures to avert the risk, and if the owner does n ot 
take such measures, the judge may permit him to take those measures at the expense of the 
owner.  
  
3- Things and equipment

Article (316 ) 
Any person who has things under his control which require special care in order to prevent 
their causing damage, or mechanical equipment, shall be liable for any harm done by such 
things or equipment, save to the extent that damage could not have been averted.  The 
above is without prejudice to any special provisions laid down in this regard.  
 
 
   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  70 
 4- Use of public roa ds

Article (317 ) 
The use of a public right is restricted (so far as is necessary to ensure) the safety of others, 
and any person who uses his public right and causes harm to another person which could 
have been avoided, shall be liable for the same.  
  
Chap ter Four:  Acts conferring a benefit 
Part  1: Unjust enrichment

Article (318 ) 
No person may take the property of another without lawful cause, and if he takes it he must 
return it.

Article (319 ) 
(1) Any person who acquires the property of another person without any disposition 
entitling him so to do must return it if that property still exists, or similar property or the 
value thereof if it no longer exists, unless the law otherwise provides. (2) If the property of any person leaves his possession without his so intending and by 
unavoidable process merges with the property of another person in such a way that it 
cannot be separated therefrom without causing harm to one of the owners, the property of 
the lesser value shall be regarded as part of the property  of the greater value after paying the 
value thereof, and if (the two parts) are of equal value then the property shall be sold and 
the proceeds distributed, unless there is an agreement or a provision of law to the contrary.  
 
Part 2:  Unjustified expropria tion

Article (320 ) 
Whoever hands over a thing believing that he has a duty so to do, and it then becomes 
apparent that he had no such duty, may recover it from the person who took it if it still 
exists, or similar property or the value thereof if it does n ot still exist.   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  71

Article (321 ) 
A recovery of property handed over without entitlement may be made if payment was made 
in satisfaction of a debt for which the cause had not materialised, or for a debt of which the 
cause has ceased to exist after it had mater ialised.

Article (322 ) 
It shall be proper to recover money paid in satisfaction of a debt which has not matured, and 
in respect of which the payer was ignorant of the due date for payment.

Article (323 ) 
If payment is obtained from a person other than t he obligor and the result of that is that the 
obligee acting in good faith has been deprived of an instrument proving the debt or any 
security attaching thereto or if he has foreborne to make a claim against the true obligor within the time limit laid down , he does not have to return what he has taken, but the 
person who has paid may have a recourse against the true obligor for the obligation and render him a guarantor thereof if appropriate.

Article (324 ) 
Whoever takes a thing without a claim of right mu st return it to its owner together with any 
profits or yield it has produced, and the judge may compensate the owner of the right for 
any shortfall in the return of the yield on the part of the person who had taken the goods.  
  
Part  3: Voluntary agency

Article (325 ) 
Whoever performs an act beneficial to a third party otherwise than upon the latter's instructions, but by leave of a judge, or under compelling necessity, or by the dictate of 
custom, shall be deemed to be acting on his behalf, and the following  provisions shall apply 
to such person.  
   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  72

Article (326 ) 
The rules of agency shall apply if the principal ratifies the act of the voluntary agent.

Article (327 ) 
A voluntary agent must continue the work which he has commenced until the principal is 
able to undertake it himself, and he must also inform the principal of his intervention as 
soon as he is able.

Article (328 ) 
A voluntary agent is liable for any losses sustained by the principal, and the judge may limit 
(also: determine) the extent of the liabi lity if the circumstances justify that course.

Article (329 ) 
If a voluntary agent delegates the whole or part of the work to another person, he shall be 
liable for the acts of his deputy, without prejudice to any direct recourse which the principal may h ave against such deputy.

Article (330 ) 
A voluntary agent shall have the same obligations as a (duly constituted) agent in restoring that which he has obtained by reason of the voluntary agency, and in giving an account of 
what he has done.

Article (331)  
The principal must perform the obligations entered into by the voluntary agent on his 
account, and must indemnify him against the obligations which he has undertaken, 
reimburse necessary and useful expenses justified by the circumstances, and compensate 
him for any loss sustained by reason of his carrying out the work, and the voluntary agent 
shall not be entitled to a fee for his work unless such work is performed in the course of his 
profession.   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  73

Article (332)  
(1) If a voluntary agent dies, his heirs shall be under the same obligations as the heirs of a 
(duly constituted) agent upon the termination of the agency by the death of such agent.  
(2) If the principal dies, the voluntary agent shall remain under the same duties towards his 
heirs as he was towards the principal.  
  
Part 4: Discharging the debt of another

Article (333 ) 
If a person discharges the obligations of a third party upon his directions, he shall have a right of recourse against the person so directing him for what he has performed on his 
beha lf, and he shall take the place of the original obligee in his right to claim against the 
obligor, whether or not such right of recourse was (expressly) agreed.

Article (334 ) 
If a person discharges the obligations of a third party otherwise than upon his  directions, he 
shall not have a right of recourse against the obligor for moneys he has paid save in the 
circumstances provided for in Article 325, and there shall be no recourse against the obligee 
unless he has discharged the obligor of the obligation, even after obtaining satisfaction of the obligation from the person performing it.

Article (335 ) 
If a pledgor discharges the debt of a third party in order to release his property pledged by way of security for such debt, he shall have a right of recours e against the debtor for the 
money he has paid.  
  
 
   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  74 
 Part  5: Mutual  provisions

Article (336 ) 
No claims arising out of a beneficial act shall be heard after the expiration of three years 
from the day on which the obligee became aware of his right of recours e, and in no case 
shall claims be heard after the expiration of fifteen years from the day on which the right of 
recourse arose.  
  
Chapter  Five:  The Law

Article (337 ) 
Rights arising directly and exclusively out of the law shall be governed by the legal 
provisions out of which they arose.  
  
Section 2:  The effects of a right 
Chapter One:  General provisions

Article (338 ) 
A right must be satisfied when the legal conditions rendering it due for performance exist, 
and if an obligor fails to perform an obligation,  he shall be compelled to do so either by way 
of specific performance or by way of compensation in accordance with the provisions of the law.

Article (339 ) 
(1) Performance shall be voluntary if it takes place by satisfaction or the equivalent.  
(2) Performance shall be compulsory if it takes place by (an order for) specific performance or by way of compensation.

Article (340 ) 
If a right loses the protection of the law for any reason, there shall be no compulsory performance, and the obligation shall become a non -enforceable obligation of the obligor.   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  75

Article (341 ) 
If an obligor discharges a non -enforceable obligation, such discharge shall be valid, and shall 
not be deemed to be a discharge of what he was not obliged to perform.  
  
Chapter  Two:  Means of enforcement  
Part  1: Voluntary execution  
1- Satisfaction  
a- The parties to the satisfaction

Article (342 ) 
(1) Discharge shall be good if performed by the obligor or his representative or by any other 
person having an interest in the discharge.  
(2) Discharge  shall also be good if performed by a person not having an interest in the 
discharge upon the directions of the obligor or otherwise and provided that the obligee shall 
have the right to refuse the discharge by a third party if the obligor objects thereto and 
notifies the obligee of his objection.

Article (343 ) 
In order for there to be a valid discharge of an obligation, the person performing it must be 
the owner of that by which the performance is effected, and if the obligor is a minor of the 
age of dis cretion, or is of the age of majority but an imbecile or subject to a restriction on the 
grounds of idiocy or feeble- mindedness and he discharges the obligation by which he is 
bound, such discharge shall be good, unless it causes damage to the person makin g the 
discharge.  
  
 
  
  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  76

Article (344 ) 
Discharge made to certain obligees shall be of no effect against other obligees if the obligor 
is under a restriction with regard to that obligation, or if the discharge is made out of 
restricted property, or if the obligor is terminally ill and the discha rge would prejudice the 
remaining obligees.  
  
b- The person to whom satisfaction is made

Article (345 ) 
Discharge may be performed to the obligee or his representative, and any person who gives 
a receipt issued by the obligee shall be regarded as a proper r ecipient of the discharge unless 
it is agreed that the discharge shall be performed towards the obligee in person.

Article (346 ) 
If an obligee is not a person of full capacity, an obligor shall not be released save by 
dischar ging the obligation towards his guardian, and if discharge is effected to the obligee 
and that whereby discharge was made is destroyed or lost in his hands, the guardian may make a claim against the obligor for satisfaction.  
  
c- Rejection of discharge

Article (347 ) 
If an obligee rejects without justification a discharge validly offered to him in circumstances 
when he should accept it, or if he refuses to perform an act without which the discharge may 
not be effected, or if he states that he will not acc ept the discharge, the obligor shall give him 
notice specifying a reasonable period to perform what he is obliged to do to obtain 
satisfaction of his right.  
  
  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  77

Article (348 ) 
The result of the giving of such notice by the obligor shall be that the thing which was the 
subject matter of the obligation shall come under the responsibility of the obligee if it had 
previously been under the responsibility of the obligor, and the obli gor shall have the right 
to put it into safe keeping at the expense of the obligee, under the responsibility of the latter 
for any harm that may be sustained by it.

Article (349 ) 
If the subject matter of the discharge is a specific thing, and the obligat ion is to deliver it at 
the place in which it is, the obligor may, after giving notice to the obligee to take delivery of 
it, obtain the leave of the judge to put it into safe keeping, and if such thing is real property 
or deemed to be so by affixation in the place where it is, the obligor may apply that it be 
placed under guard.

Article (350 ) 
If the subject matter of the discharge is a perishable thing or if it requires the incurring of 
substantial expense to keep it safe or under guard, the obligor may,  after obtaining the leave 
of the judge, or without such leave in compelling circumstances, sell it at its customary 
market value, or, if that is impossible, by public auction, and shall lodge the proceeds in 
place of putting the thing itself in safe keepi ng.

Article (351 ) 
The placing in safe keeping or the act performed in its stead shall also be permissible if the 
obligor is unaware of the identity or place of residence of the obligee or if the obligor is 
under a restriction and does not have a representative who can accept discharge on his behalf, or if the obligation is the subject of a dispute among several persons, or  if there are 
other serious reasons justifying that course.  
   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  78

Article (352 ) 
A valid offer shall, with regard to the obligor, take the place of discharge if it is followed by a 
deposit satisfying the legal requirements, or by any similar procedure, if accepted by the 
obligee or if a final judgment is made to the effect that it is valid.

Article (353 ) 
(1) If the obligor tenders discharge and the tender is followed by a deposit or similar procedure, he may resile from that tender so long as the obligee has n ot accepted it and 
there has been no final judgment as to its validity, and if he does so resile, neither his 
co-obligors nor his guarantors shall be discharged.  
(2) If an obligor resiles from the tender after the obligee has accepted it or after a judgmen t 
as to its validity, and the obligee accepts such resilement from him, the obligee may not 
thereafter rely on any securities for the performance of the obligation, and the co- obligees 
and the guarantors shall be discharged.  
  
d- The subject matter, time and place of the satisfaction, expenses thereof, 
and proof

Article (354 ) 
(1) If the obligation is one which must be specifically performed, the obligor may not effect substituted performance of it without the consent of the obligee, notwithstanding that such substituted performance is of a value equivalent to or greater than the thing due.  
(2) If, however, the obligation is not one to be specifically performed, the obligor may discharge it by similar performance, even without the c onsent of the obligee.

Article (355 ) 
(1) The obligor may not compel the obligee to accept partial performance of the obligation unless there is an agreement or a provision of law permitting that.  
(2) If, there is a dispute as to part of the obligation and the obligee agrees to accept performance of the agreed part, the obligor may not refuse performance of such part.   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  79

Article (356 ) 
If the obligee is bound to discharge any expenses together with the obligation, and his 
performance does not cover the obligat ion as well as those expenses, what he has 
performed shall be deducted firstly from those expenses and then from the principal 
obligation, unless a contrary agreement is made.

Article (357 ) 
If an obligor is bound by several obligations  of the same kind towards the same obligee, and 
the performance made by the obligor does not satisfy all of those obligations, the obligee 
may, upon performance, specify the particular obligation which he wishes to be (regarded 
as) performed, unless there is any legal or contractual bar preventing such a course.

Article (358 ) 
If the obligation is not specified as set out in the foregoing Article, the performance shall be attributed to such obligation as has matured, and if there are several such obligations, then 
the attribution shall be to the most burdensome of the obligations upon the obligee, and if 
the obligations are of equal burden, the attribution shall be to such obligation as the obligee 
shall specify.

Article (359 ) 
(1) An obligation must be di scharged as soon as it becomes final and binding as against the 
obligor, in the absence of an agreement or provision of law to the contrary.  
(2) Provided that a judge may, in exceptional circumstances and if not prevented by any 
provision in the law, grant  a reasonable period or periods to the obligor for the performance 
of his obligations if his circumstances so warrant, and provided that such granting of time 
does not cause serious loss to the obligee.  
  
 
  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  80

Article (360 ) 
(1) If an obligation is deferred, the obligor may discharge it prior to its falling due if the 
deferment is to his advantage, and the obligee must accept.  
(2) If an obligor discharges an obligation before it falls due, and a third party right arises over 
that whereby discharge is performed, the obligation shall again become deferred as before.

Article (361 ) 
(1) If the subject matter of the obligation is one for specific performance, it must be delivered at the place where it is at the time the obligation arose, unless there is an agreemen t or 
provisions of law to the contrary.  
(2) In the case of other obligations performance shall be at the place where the obligor has 
his residence at the time of discharge or at the place where he carries on business, if the 
obligation relates to his busin ess.

Article (362 ) 
If the obligor sends that wherewith discharge is to be made with his messenger to the obligee and the thing is lost in the hands of the messenger before he arrives, the loss shall 
fall on the obligor.  If the obligee directs the obligor to discharge the obligations to the 
messenger of the obligee and he does so, thereafter the loss shall fall upon the obligee and 
the obligor shall be discharged from his obligation.

Article (363 ) 
The costs of discharge shall be borne by the obligee unl ess there is an agreement or a 
provision of law to the contrary.

Article (364 ) 
(1) Any person discharging part of an obligation may require a receipt as to that which has 
been performed, with an endorsement on the document relating to the obligation that  such 
discharge has been received, and if the obligation is discharged in full he may require that  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  81 
 such document be returned to him or cancelled.  If the document has been lost, he may 
require the obligee to make a written acknowledgment of the loss of the document.  
(2) If the obligee refuses to comply with his obligations under the foregoing paragraph, the 
obligor may deposit the thing due with the court.  
  
2- Quasi -satisfaction  
a-Substituted satisfaction

Article (365 ) 
An obligee may, in satisfaction of  his right, accept another thing or another act performed by 
the obligor, and the agreement to the substitution shall be subject to the general provisions governing contracts as laid down in this Law.

Article (366 ) 
(1) Substituted performance governed by  the provisions relating to sale if that which is given 
in performance is a specific thing in place of discharge of the (original) obligation.  
(2) The provisions governing performance in the termination of an obligation shall apply 
thereto.

Article (367 ) 
The original obligation, together with any securities pertaining thereto, shall be extinguished 
by the substituted performance, and the rights of the obligee shall be transferred to the substitute.  
 
b- Set-off

Article (368 ) 
Set-off is the satisfaction of an obligation of the obligee by an obligation to be performed by 
the obligor.  
 
   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  82

Article (369 ) 
Set-off may either be mandatory, occurring by operation of law, or voluntary, occurring by 
agreement between the parties, or judicial, occurring by order of the court.

Article (370 ) 
In the case of mandatory set- off, each of the parties must be both the obligor and the obligee 
of the other, and the obligations must be of the same type and description, must be equally 
due and of equal strength or weakness, and the making of the set -off must not be prejudicial 
to the rights of third parties, whether the cause of the arising of the obligations is the same or 
different.

Article (371 ) 
A set -off may be made by agreement if any of the conditions for a mandatory set -off is not 
satisfied.

Article (372 ) 
A judicial set -off takes place by order of a judge if the conditions thereof are satisfied, either 
upon an original application or upon an objection.

Article (373 ) 
If a bailee is under an obligation to his bailor, or i f a person who has misappropriated goods 
is owed an obligation by the person from whom the goods have been misappropriated, and 
the obligation is of the same nature as the goods deposited or misappropriated, there shall be no set -off save by the agreement of the parties.

Article (374 ) 
If an obligee loses property of the obligor, of the same kind as the subject matter of the 
obligation, such property shall fall into the set -off, and if it is not of the same kind, it shall not 
fall into the set- off save with the agreement of the parties.   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  83

Article (375 ) 
A set -off may be made upon the request of a person having an interest therein, and the 
set-off shall be effective to the amount of the lesser of the two obligations.

Article (376 ) 
If the obligation is one for  which a claim has become time- barred by the time the set -off is 
claimed, that fact shall not operate to prevent a set -off provided that the period causing the 
claim to be time barred had not already expired by the time the set -off first became possible.

Article (377 ) 
If an obligor discharges an obligation of his and has a right to claim a set- off for a right due to 
him, he may not rely on the guarantees of that right to the detriment of third parties unless 
he was unaware of the existence (or a right of set-off), and has a reasonable excuse for such 
ignorance.  
  
c- The merger of capacities

Article (378 ) 
(1) If the same person acquired the status of both obligor and obligee with regard to a single 
obligation, the obligation shall become extinguished to the extent to which the two statuses 
have merged.  
(2) Obligations shall not merge if the obligor is the heir of the obligee and he joins with the other obligors in obtaining satisfaction of the obligation out of the estate.

Article (379 ) 
If the cause of the merging of the two statuses ceases retrospectively, the obligation shall revert to its former position.  
  
   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  84 
 Part  2: Compulsory enforcement  
1- Specific Performance

Article (380 ) 
(1) An obligor shall, after being given notice, be compelled to discharge hi s obligation by 
way of specific performance, if that is possible.  
(2) Provided that if specific performance would be oppressive for the obligor, the judge may, 
upon the application of the obligor, restrict the right of the obligee to a monetary substitute 
unless that would cause him serious loss.

Article (381 ) 
(1) If the subject matter of the right is an act which, by its nature or by virtue of a contractual 
provision, the obligor must perform personally, the obligee may reject performance thereof 
by anot her person.  
(2) If the obligor does not perform the act, the obligee may seek the leave of the judge to perform it (himself), and he may also perform it (himself) without leave under compelling 
necessity, and in both cases the performance shall be at the expense of the obligor (debtor).

Article (382) 
The judgment of the court shall take the place of performance if the subject matter of the right is an act, and the nature of the case so allows.

Article (383 ) 
(1) If that which is required of an obligor is  the preservation of a thing, or the management 
thereof, or the exercise of care in the performance of his obligation, he shall have discharged 
that obligation if, in the performance thereof, he exercises all such care as the reasonable 
man would exercise,  notwithstanding that the intended object is not achieved, unless there 
is an agreement or a provision of law to the contrary.  
(2) In all cases, the obligor shall remain liable for any fraud or gross negligence on his part.  
   
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Article (384 ) 
If the subject matter of the right is the refraining from an act, and the obligor is in breach of 
that obligation, the obligee may require that the effects of such breach be removed, or apply 
to a judge for leave to remove such effects at the expense of the obligor.

Article (385 ) 
If specific performance has taken place, or if the obligor persists in refusing performance, the judge shall determine the amount of compensation to be paid by the obligor, having regard therein to the prejudice suffered by the obligee, and the unreasonableness of the attitude of 
the obligor.  
 
2- Performance by way of compensation

Article (386 ) 
If it is impossible for an obligor to give specific performance of an obligation, he shall be 
ordered to pay compensation for non -performance of his oblig ation, unless it is proved that 
the impossibility of performance arose out of an external cause in which (the obligor) played no part.  The same shall apply in the event that the obligor defaults in the performance of his 
obligation.

Article (387 ) 
Compen sation shall not be due until after the obligor has been put on notice, unless there is 
a contrary provision in the law or in the contract.

Article (388 ) 
It shall not be obligatory to give notice to the obligor in the following circumstances: ‑ 
(a) if the  performance of the obligation becomes impossible or useless through the act of the 
obligor;  
(b) if the subject matter of the obligation is compensation arising out of an unlawful act;  
(c) if the subject matter of the obligation is the return of a thing wh ich the obligor knows is  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  86 
 stolen, or a thing received by him without claim of right and the obligor is aware of that; or  
(d) if the obligor states in writing that he does not wish to perform his obligation.

Article (389 ) 
If the amount of compensation is n ot fixed by law or by the contract, the judge shall assess it 
in an amount equivalent to the damage in fact suffered at the time of the occurrence thereof.

Article (390 ) 
(1) The contracting parties may fix the amount of compensation in advance by making  a 
provision therefor in the contract or in a subsequent agreement, subject to the provisions of 
the law.  
(2) The judge may in all cases, upon the application of either of the parties, vary such 
agreement so as to make the compensation equal to the loss, a nd any agreement to the 
contrary shall be void.  
  
Part  3: Lawful means to safeguard performance  
1- Security of the assets of the debtor for performance

Article (391 ) 
(1) All of the property of the obligor stands as security for the performance of his obli gations.  
(2) All creditors stand pari passu in respect of such security, without prejudice to any 
provisions of the law to the contrary.  
  
2- Indirect claims

Article (392 ) 
(1) Every obligee, notwithstanding that his right may not be due for discharge, may exercise, 
in the name of his obligor, all of the rights of that obligor, save those that relate particularly to his person or which are not capable of being attached.  
(2) The exercise by the obligee of the rights of his obligor shall not be permitted un less it is 
established that the obligor has not exercised those rights and that his failure so to do is such  
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 as may lead to or aggravate his bankruptcy, and the obligor must be brought into the claim.

Article (393 ) 
The obligee shall be regarded as acting on behalf of his obligor in exercising his rights, and 
any benefit arising out of the exercise of those rights shall be brought into the obligor's 
property and shall stand as security for all his creditors.  
  
3- Sha m arrangements

Article (394 ) 
(1) If a sham contract is made, the obligees of the contracting parties, and special successors, may, if they are acting in good faith, rely on the sham contract and also rely on the hidden 
contract, and prove by all means the sham nature of the contract by which they are 
prejudiced.  
(2) If there is a conflict of interest between the parties concerned and some of them rely on 
the apparent contract and others on the hidden contract, the former shall take precedence.

Article (395) 
If the contracting parties conceal a true contract with an apparent contract, the true contract 
will be the effective one as between the contracting parties and a special successor.  
 
4- Claims against a debtor not to make dispositions detrimental to the 
creditor

Article (396 ) 
If obligations, whether due or deferred, exceed or are equal to the assets of the obligor, then he may not make any gift he is not bound to make or which custom does not dictate that he must, and an obligee may ask for an order declaring that such disposition is ineffective as 
against him.

Article (397 ) 
If obligees are making a claim against an obligor whose assets do not exceed the obligations  
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 due to them, he may not make any gifts of his property or dispose of it by way of 
commu tative contract notwithstanding the absence of preference, and the obligees may 
seek an order declaring that the disposition is ineffective as against them, and may also seek 
an order for the sale of his property and that they do share in the proceeds ther eof in 
accordance with the provisions of the law.

Article (398 ) 
If an obligee alleges that the property of the obligor does not exceed the amou nt of the debt, 
he need only prove the amount of the obligations to him, and the obligor himself must prove that he has assets exceeding the amount of the obligations.

Article (399 ) 
If an order is made declaring that the disposition is ineffective, the obligees prejudiced by such disposition shall have the benefit of that order.

Article (400 ) 
(1) No claim for a declaration that a disposition is ineffective shall be heard after the expiration of three years from the day on which the obligee learned of th e cause rendering 
the disposition ineffective.  
(2) In no circumstances shall such claims be heard after the expiration of fifteen years from the time the disposition was made.  
  
5- Restrictions on bankrupt obligors

Article (401 ) 
A restriction may be placed on a obligor if his obligations due exceed his assets.

Article (402 ) 
(1) The restriction shall be by way of an order made by a judge within whose jurisdiction the  
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 residence of the obligor is situated upon an appli cation made by the obligor or any of the 
obligees, and the application shall be heard promptly.  
(2) Any obligee may, under the restriction order, obtain an order from the competent judge 
attaching all of the property  of the obligor save such as may not be attached.  The 
attachment shall remain in effect over the property of the obligor for the benefit of the 
obligees until the restriction is terminated.

Article (403 ) 
The judge must in each case before imposing a res triction on the obligor have regard in 
exercising his discretion to all of the circumstances surrounding the obligor, the extent to 
which he was responsible for the circumstances which led to the restriction order being 
ought, the lawful interests of his o bligors, and any other circumstances which may affect his 
financial condition.

Article (404 ) 
(1) The Clerk of the Court must, on the day on which the application for a restriction is 
lodged, register the contents of the claim in a special register arrang ed in order of the names 
of the obligors over whom a restriction is applied for, and he must make a note in the margin 
of the said register of the order made in the claim, and of any order made confirming or 
reversing it, on the same day that any such orde r is made.  
(2) The Court Clerk must also send to the office of the Ministry of Justice a copy of these registrations and endorsements for registration on the general register to be kept in 
accordance with a regulation to be issued by the Minister.

Article (405 ) 
If an obligor changes his address he must give notice thereof to the clerk of the court within 
the area of which his old address was and the clerk must, as soon as he learns of the change 
of address, either through notification from the obligor or from any other source, send a 
copy of the restriction order and of the particulars noted in the margin of the register to the 
court within whose jurisdiction the new address is, for registration in its records.   
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Article (406) 
A restriction order shall have the following consequences: ‑ 
(1) any deferred obligations due by the obligor shall become due for performance;  
(2) any disposition by him over his existing and future property shall be ineffective as 
against his obligees as a whole; and  
(3) any acknowledgment of an obligation made by him to another person shall be 
ineffective as from the time the order is registered.

Article (407) 
If a restriction is imposed on an obligor, the president of the court having jurisdiction in the 
restriction may make an order in favour of the obligor on a petition lodged by him for expenses to be paid to him out of his assets, and an objection may be made against such 
order made on the petition within thr ee days from the date of issue thereof if the objection is 
on the part of the obligor, or from the date that the creditors are notified of the order, if the 
objection is from them.

Article (408) 
The property of an obligor under a restriction shall be sold and divided among the creditors 
by way of pro rata sharing in accordance with the procedures laid down by law, and he shall 
be left such money as he needs to maintain himself and other persons whom he has an obligation to maintain.

Article (409) 
An obligor shall be liable to be punished for fraud in the following circumstances: ‑ 
(1) if a claim for an obligation is brought against him and he deliberately becomes bankrupt in order to cause loss to his obligees, and an order is made in the case against him for the 
performance of the obligation and for the making of a restriction against him;  
(2) if, after the judgment against him imposing a restriction, he conceals some of his property in order to a void execution against it, or if he fabricates bogus debts or the amounts  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  91 
 thereof, with the intention of causing loss to his obligees; or  
(3) if he fraudulently changes his place of residence and his obligees suffer loss thereby.

Article (410 ) 
(1) The re striction shall terminate by the order of the judge having jurisdiction in the place 
where the obligor has his residence upon the application of any interested party in the 
following circumstances: ‑ 
(a) if the property subject to a restriction is divided a mong, the creditors;  
(b) if it is established that the obligations of the obligor do not exceed his assets; or  
(c) if the obligor satisfies his obligations which have fallen due without the restriction having 
any effect upon the date of their falling due, and in that event the maturity date of the 
obligations which had fallen due by reason of the restriction shall again become as they 
were before, but provided that the obligor has discharged all the instalments that have fallen 
due.  
(2) The clerk of the cou rt shall of his own motion make an endorsement of the order 
terminating the restriction on the day it is made in the margin of the register provided for in Article 404, and he must send a copy thereof to the office of the Ministry of Justice for 
endorsemen t thereof also.

Article (411 ) 
A restriction order shall terminate by operation of law after the expiration of five years from 
the date of the registration of the order in that behalf.

Article (412 ) 
An obligor may, after the termination of the restri ction, require the return of debts which 
became due and payable by reason of the restriction and for which the original maturity 
date has not yet come, on condition that he has discharged his obligations which have fallen 
due without the restriction having  had any effect on their falling due.  
 
  
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Article (413 ) 
The termination of the restriction shall not prevent the obligees from challenging the 
dispositions of the obligor or from exercising their rights under Articles 392 and 394- 400.  
  
6- Rights of retention

Article (414 ) 
Any person who is obliged to perform a thing may refrain from so doing so long as the obligor has not discharged an obligation of his arising by reason of an obligation of the 
obligee and connected with it.

Article (415 ) 
Each of the contracting parties in a commutative contract generally involving property may retain the thing contracted for while it is in his possession until he receives the consideration 
due.

Article (416 ) 
Any person who has incurred necessary or ben eficial expense on property of another in his 
possession may refuse to return such property until he recovers what is due to him at law, in 
the absence of an agreement or provision of law to the contrary.

Article (417 ) 
(1) Any person who retains a thing must preserve it and must give an account for any yield 
derived therefrom.  
(2) He may seek the leave of the judge to sell the thing retained if he fears that it may suffer loss or deterioration, in accordance with the procedures laid down for sale of goods  held by 
way of possessory pledge, and the right of retention of a thing shall pass to the proceeds of 
sale thereof.  
    
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Article (418 ) 
Any person who retains a thing in the exercise of his right of retention thereof has a prior 
right over other competing creditors for the satisfaction of his rights thereout.

Article (419 ) 
(1) The right of retention shall be extinguished if the thing passes out of the hands of the person in possession or control, in the absence of any provision of law to the contrary.  
(2) Nevertheless it shall be permissible for a person who retains a thing which passes out of 
his possession either without his knowledge or despite his objection t o require within thirty 
days from the time he learns of its having so passed and prior to the expiration of one year of 
its having so passed that it be restored to him.  
  
Chapter  Three : Dispositions conditional by suspension or deferment  
Part  1: The condit ion (subsequent)

Article (420) 
A Condition is a future matter upon the existence or absence of which the full effectiveness 
(of a disposition) depends.

Article (421 ) 
A perfected disposition is one which has been absolutely concluded, is not subj ect to a 
Condition or deferred to a future time, and is of full effect immediately.

Article (422 ) 
A conditional (lit: suspended) disposition is one which is dependent on a not yet existing Condition or on a future event, and whose effect is suspended until such Condition is 
satisfied.  
 
 
   
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Article (423 ) 
In order for the suspension to be valid, the Condi tion must be an event which has not taken 
place, but which could take place and is not impossible.

Article (424 ) 
A disposition shall be void if the existence thereof depends on an impossible Condition, or if 
it permits what is forbidden, or forbids that which is lawful, or is contrary to public order or 
morals.

Article (425) 
A disposition dependent upon a Condition not incompatible with the contract shall be ineffective, unless the Condition materialises.

Article (426 ) 
A disposition shall cease to be effective if the Condition to which it was subject materialises, and the obligee shall be bound to return what he has taken, and if it is impossible to make 
restitution through a cause attributable to him, he shall be bound to give an indemnity.

Article (427 ) 
(A disposition) dependent upon a Condition shall be affirmed upon its being established that the Condition has materialised.

Article (428 ) 
A Condition must be observed as far as is possible.  
  
Part 2: Deferment

Article (429 ) 
It shall be permissible to defer a disposition to a future time, upon the coming of which the provisions (of the disposition) shall become effective or be extinguished.   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  95

Article (430 ) 
If it appears from the disposition that the obligor is not to perform unl ess it is possible or 
convenient for him to do so, the judge shall determine the time for performance having 
regard to the present and future resources of the obligor, and shall require of himthat he exercise due diligence in the performance of his obligat ions.

Article (431 ) 
The right of an obligor to defer shall lapse in the following circumstances: ‑ 
(1) if a bankruptcy or restriction order is made against him;  
(2) if he does not provide the agreed securities for performance; or  
(3) if the securities in rem for the obligation become defective by his act or through a cause in which he has played no part, unless he takes steps to supplement them.

Article (432 ) 
If the deferment is for the benefit of either one of the parties, such party may waive it unilaterally.

Article (433 ) 
A deferred obligation shall not mature upon the death of the obligor, but shall mature on the death of the obligee unless guaranteed by a security in rem.  
  
Chapter  Four: Multiplicity of objects of the contract 
Part  1: The grant of an option as to the thing to be performed

Article (434 ) 
It shall be permissible for the subject matter of a disposition to be a number of things, with the obligation of the obligee being discharged if he performs any one of them.  The option 
shall be that of the obligee if it is absolute, unless there is an agreement or a provision of law to the contrary, and the rules relating to the option of specification shall apply to the subject matter of the disposition.   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  96 
 Part  2: Substitution of the thin g to be performed

Article (435 ) 
(1) A disposition is substitutive if the subject matter thereof is one thing, but the obligation 
of the obligee is discharged upon the performance of another thing in substitution thereof.  
(2) It is the original (subject matter) alone and not the substitute which is the subject matter of the obligation, and that which determines the nature thereof.  
  
Chapter Five:  Multiplicity of parties to a disposition  
Part  1: Joint obligees

Article (436 ) 
Obligees shall not be regarded as being joint save by agreement or by law.

Article (437 ) 
An obligor may discharge his obligation to any of the joint obligees unless any one of them gives him notice that discharge may not be made to him.

Article (438 ) 
If the liability of an obligor is discharged towards one of the joint obligees for a reason other than performance, he shall not be released as against the other obligees save to the extent of 
the share of such obligee.

Article (439 ) 
(1) Joint obligees ma y claim jointly or severally against the obligor for the performance of 
the obligation.  
(2) An obligor may not object to the obligation as towards any one joint obligee on grounds 
particular to another obligee, but he may object on grounds that are particu lar to that 
obligee and also on grounds common to all of the obligees.  
 
   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  97

Article (440 ) 
Any part of an obligation discharged towards joint obligees shall be deemed to have been 
discharged as towards all of them equally , unless there is a provision of law or an agreement 
to the contrary.  
  
Part  2: Joint obligations

Article (441 ) 
An obligation shall be joint if it has the same subject matter, is an obl igation due from a 
family by way of inheritance to a number of heirs, is joint consumed property, or is 
consideration for a loan raised from property owned in common.

Article (442 ) 
All co -obligees in a joint obligation shall have the right to claim their share therein, and 
anything received by one of them shall be the joint property of the co- obligees, to each 
according to his proportion.

Article (443 ) 
(1) If one co -obligee in a joint obligation receives part of the satisfaction of that obligation, 
the other co- obligee may share with him therein in proportion to his share of it.  They may 
pursue the obligor for the balance, or he may leave what the other has received, and pursue 
the obligor for his share.  
(2) If one co -obligee elects to pursue the obligor, he may not have recourse against his 
co-obligee unless his share has been lost, the foregoing applying in the proportion of his 
share in what (the co -obligee) has received.

Article (444 ) 
(1) If one of the co- obligees receives his share of the discharg e of a joint obligation and then 
disposes of it or consumes it, the other co- obligees may have recourse against him for their 
shares therein.   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  98 
 (2) If it is lost in his hands with no fault on his part, he shall not be liable for the shares of his 
co-obligees  therein, but he shall be regarded as having received his share, and the balance of 
the obligation against the obligor shall belong to the other co- obligees.

Article (445 ) 
If one of the co- obligees in an obligation obtains a guarantor for his share in the joint 
obligation or if the obligor assigns the obligation to another, the co- obligees may share with 
him in their shares in the amount which he receives from the guarantor or the assignee.

Article (446 ) 
If one of the co- obligees purchases property from the obligor for his share in the debt, the 
other co- obligees may require him to guarantee any loss in value suffered by their shares up 
to the value of the thing purchased, or they may have recourse against the obligor for their 
shares, and they may share  with him what he has purchased if they so agree.

Article (447 ) 
Any of the co- obligees may give his share to the obligor or may discharge him therefrom, 
and he shall not be required to guarantee the shares of his co- obligees for what he has given 
or rele ased.

Article (448 ) 
Any of the co -obligees in a joint obligation may make a compromise for his share, and if the 
consideration for the settlement is of the same kind as the obligation, the others may share with him the consideration received, or they may  pursue the obligor, and if the 
consideration for the settlement is not of the same kind as the obligation, they may pursue the obligor or the co- obligee who has made the compromise, and the latter may pay them 
his share in the consideration received, or t heir share in the obligation.  
  
 
  
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Article (449 ) 
(1) None of the co -obligees in a joint obligation may defer it on his own without the consent 
of the remaining obligees to such deferment.  
(2) He may defer his share therein without the consent of the others,  and in that event he 
may not participate with them in such part of the debt as they receive.  
  
Part  3: Joint liability between obligors

Article (450 ) 
There shall be no joint liability as between obligors save by agreement or by a provision in 
the law.

Article (451 ) 
If one of the jointly liable obligors satisfies the obligation in full, the others shall be discharged.

Article (452 ) 
(1) An obligee may claim against all or any of the jointly liable obligors, subject to the type of relationship he has with each obligor which may affect the obligation.  
(2) Any obligor may object upon a claim being against him on any grounds of objection particular to him, or common to all of the obligors alone.

Article (453 ) 
If an obligee agrees with one of the jointly lia ble obligors to substituted discharge, the others 
shall be released unless he reserves his rights as against them all.

Article (454 ) 
If the share of one of the jointly liable obligors in an obligation becomes extinguished for any reason other than satisf action, the obligation shall not become extinguished with regard 
to the other obligors save to the extent of that share in the obligation.   
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Article (455 ) 
If an obligee does not agree to discharge the remainder of the jointly liable obligors from the 
obligat ion, he may not make a claim against them for anything other than the balance after 
deducting the share of the obligor whom he has discharged, unless he has reserved his right 
to have recourse against them for the whole obligation, and in that event they s hall have a 
right of recourse against the other obligor for his share therein.

Article (456 ) 
If an obligee discharges one of the jointly liable obligors from the joint liability, he shall 
retain his right to have recourse against the others for the whole  of the obligation unless a 
contrary agreement has been made.

Article (457 ) 
If an obligee discharges one of the jointly liable obligors from the obligation or from the joint 
liability, the remainder of the obligors may have recourse against that obligor for his 
contribution in the share of any of them who is bankrupt, unless the obligee has discharged him from all liability for the obligation, and the obligee shall then be responsible for the 
proportion of such obligor in the share of the bankrupt.

Article (458 ) 
(1) If a claim against one of jointly liable obligors has become barred by effluxion of time, that fact shall not assist the remaining obligors save to the extent of the share of that obligor.  
(2) If time is interrupted or ceases to run with rega rd to one of the jointly liable obligors, the 
obligee may not rely on that fact as against the others.

Article (459 ) 
A jointly liable obligor shall, in the performance of his obligation, be liable for his acts, and if the obligee gives him notice or sues  him, that shall be of no effect so far as concerns the 
remaining obligors, but if one of the jointly liable obligors gives notice to the obligee, that  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  101 
 shall benefit the others.

Article (460 ) 
A composition made by one of the joint liable obligors with th e obligee shall not be effective 
if it creates a new liability as against them or if it increases their liability, unless they accept it 
and benefit from the composition if it involves a discharge from the obligation or a release 
from liability therefor in  any other way.

Article (461 ) 
An admission of an obligation made by a jointly liable obligor shall be of no effect as against the others, nor shall the other jointly liable obligors be prejudiced if the obligee demands the 
oath from the obligor and he refuses or if the obligor demands the oath from the obligee and 
he takes it, but if the obligee demands the oath from the obligor and he takes it, the other obligors shall have the benefit thereof.

Article (462 ) 
If a judgment is made against one of the joi ntly liable obligors, that shall be of no effect as 
against the remainder, but they shall benefit by it if the judgment is in his favour, unless it is based on a reason particular to him.

Article (463 ) 
Any jointly liable obligor who has satisfied the obl igation shall have a right of recourse 
against any of the others up to the amount of that other's share, and if one of them is bankrupt he shall bear the consequences of that bankruptcy with the jointly liable obligors 
who are solvent, without prejudice to their right of recourse against the bankrupt if he 
becomes solvent again.  
  
 
  
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Article (464 ) 
If one of the jointly liable obligors is the obligor originally liable under an obligation and the 
other obligors are guarantors, he shall not, after satisfying the obligation, have any right of 
recourse against them.  
  
Part  4: Indivisibility of dispositions

Article (465 ) 
A disposition shall be indivisible if the nature of the subject matter precludes divisibility or if it appears from the intention of the contracti ng parties that it should not be permitted.

Article (466 ) 
(1) If there are several obligees in an indivisible disposition, or if there are several heirs of the obligee in such disposition, any obligor or heir may make a claim for the satisfaction of the 
right in full.  
(2) If one of them objects, the obligor must discharge the obligation to them all jointly, or 
must lodge it with the competent authority as the law may provide.  
(3) Each of the obligors shall have a right of recourse for the amount of his share against the obligor who has received satisfaction of the right.

Article (467 ) 
(1) If there are several obligees in an indivisible disposition, each of them shall be liable for the whole obligation.  
(2) A person who has satisfied a right shall have a right of recourse against each of the others up to the amount of his share.  
  
  
 
  
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 Chapter Six:  Extinguishment of rights  
Part  1: Discharge

Article ( 468 ) 
If the obligor discharges his obligee voluntarily of a right due to him, the right shall be 
extinguished.

Article (469 ) 
The discharge shall not be dependent upon the agreement of the obligor, but shall be ineffective if rejected by him and if he dies bef ore acceptance the debt may not be recovered 
from his estate.

Article (470 ) 
Discharge may only be in respect of an existing obligation, not a future obligation.

Article (471 ) 
(1) The substantive provisions relating to gifts shall apply to discharges.  
(2) No particular form is required for a discharge but if it applies to a disposition it must 
satisfy the form laid down by law or agreed by the contracting parties.  
  
Part  2: Impossibility of performance

Article (472 ) 
The rig ht shall expire if the obligor proves that the performance of it has become impossible 
for him for an extraneous cause in which he played no part.  
  
Part  3: Lapse of time barring a right

Article (473 ) 
A right shall not expire by the passage of time but no claim shall be heard if denied after the 
lapse of fifteen years without lawful excuse, but having regard to any special provisions  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  104 
 relating thereto.

Article (474 ) 
(1) No claim shall be heard in respe ct of any periodical renewing right, if denied, upon the 
lapse of five years, in the absence of lawful excuse. 
(2) With regard to yields accruing due by a person in possession acting in bad faith, the claim 
shall not be heard if denied upon the lapse of fi fteen years, in the absence of a lawful excuse.

Article (475 ) 
If denied, and in the absence of lawful excuse, no claim shall be heard in respect of the 
following rights after the passage of five years: ‑ 
(1) rights of doctors, pharmacists, lawyers, engineers, experts, professors, teachers and 
brokers, if such rights are due to them by reason of professional services rendered, or by 
reason of disbursements incurred; 
(2) moneys reclaimable by reason of overpayment of taxes or duties, but without prejudice to the provisions of the special laws.

Article (476 ) 
If denied, and in the absence of lawful excuse, no claim shall be heard in respect of the 
following rights upon the expiry of two years: - 
(a) rights of merchants and craftsmen in respect of items supplie d by them to persons not 
trading in those items, and rights of owners of hotels and restaurants in respect of the cost of 
accommodation and the cost of food, and moneys expended by them on account of their 
customers;  
(b) rights of workers, servants, and hi red people for daily or non -daily wages and the cost of 
supplies provided by them.

Article (477 ) 
(1) Claims shall not be heard in the circumstances referred to in the foregoing article 
notwithstanding that the obligee may still be carrying out other work  for the obligor.   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  105 
 (2) If there is a written acknowledgement or paper proving any of the rights set out in Article 
474, 475 or 476, the claim shall not be heard upon the lapse of fifteen years from their 
becoming due.

Article (478 ) 
The period laid down fo r the prescription of claims shall commence as from the day upon 
which the right falls due for exercise and from the time a condition is satisfied if the right is 
dependent upon a condition, and from the time the entitlement is proved in claims under a 
guarantee of an entitlement.

Article (479 ) 
Claims shall not be heard if left by a predecessor and then by the successor after him, and 
the total of the two periods amounts to the period laid down for prescription.

Article (480 ) 
The period for t he prescription of claims shall be calculated in days.  The first day of that 
period shall not be taken into account, and the time shall expire at the end of the last day of 
the period, unless that day is an official holiday in which case the time shall be  extended to 
the following day.

Article (481 ) 
(1) The running of time for prescription shall be suspended if there is a lawful excuse whereby the claim for the right could not be made.  
(2) The period during which that excuse subsisted shall not be taken into account in the 
prescription period.

Article (482 ) 
If certain heirs do not bring a claim relating to their inheritance (during) the period laid 
down for such claim, with no lawful excuse, and the other heirs have a lawful excuse, the  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  106 
 claim of those h eirs shall be heard up to the amount of their shares.

Article (483 ) 
An admission by an obligor of a right, whether express or by implication, shall interrupt the 
time laid down for prescription.

Article (484 ) 
The prescription period shall be interrupted upon a judicial claim being made or by any 
judicial proceeding being taken by an obligee to enforce his right.

Article (485 ) 
(1) If the period of prescription is interrupted, a new period equivalent to the firs t period 
shall commence.  
(2) No right of whatever kind shall lapse if adjudicated upon by a judge in such a manner as not to admit of challenge.

Article (486 ) 
If a claim for a right is barred by passage of time, no claim may be made in respect of matters  
ancillary to that right notwithstanding that the period of prescription for such ancillary 
matters may not have expired.

Article (487 ) 
(1) It shall not be permissible to waive a time- bar defence prior to the establishment of the 
right to raise such defe nce, nor shall it be permissible to agree that a claim may not be 
brought after a period differing from the period laid down by law.  
(2) It shall be permissible for any person having the competence to make dispositions in 
respect of his rights to waive the defence, even by way of implied waiver, after the right has 
been established, but provided that such waiver shall not be effective in respect of obligees if it is made so as to cause them detriment.   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  107

Article (488 ) 
(1) It shall not be permissible for a judge to judge of his own motion that a case may not be 
heard.  Such order may only be made upon the application of the obligor or a party to the 
proceedings having an interest therein.  
(2) The defence may be raised at any stage of the proceedings unless it appears from the 
circumstances that the person having the right has waived it expressly or impliedly.  
  
Book Two: Contracts  
Section 1:  Contracts conferring ownership  
Chapter One:  Sale and Barter  
Part:  1 Sale 
(1) Definition and elements of sale

Article (489 ) 
A sale is the exchange of non -money property for money.

Article (490 ) 
(1) The property sold must be known to the purchaser sufficiently to avoid gross 
uncertainty.  
(2) The property sold must be known to the purchaser by its distinguishing characteristics  
and descriptions, and if the property is in his presence, an indication of it shall be sufficient.

Article (491 ) 
If the contract of sale states that the purchaser is sufficiently aware of the property sold, he 
shall not have the right to avoid the contr act on the grounds of his lack of knowledge, unless 
he proves that the seller deceived him about it.  
  
 
  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  108

Article (492 ) 
(1) If the sale is by sample, it shall be sufficient for that to be seen, and the property sold 
must conform to it.  
(2) If it appears tha t the property sold does not conform to the sample, the purchaser may 
elect to accept or reject it.

Article (493 ) 
(1) If there is a dispute between the two contracting parties as to whether the thing sold 
conforms to the sample, and both the thing and th e sample are available, regard shall be had 
to the opinion of experts, and if the sample has been lost in the hands of one of the contracting parties, the other party shall have the last word as to whether the goods are in 
conformity or not, unless the oth er proves the contrary.  
(2) If the sample is in the hands of a third party by agreement between the parties, and is 
lost, and the object of sale is a specified thing and is agreed to be the thing contracted for, the 
seller shall have the last word as to whether the thing is in conformity unless the purchaser 
proves the contrary, and if the goods sold are specified by type, or are a specified thing and it 
is not agreed to be the thing contracted for, the purchaser shall have the last word as to 
whether the property is in conformity, unless the other party proves the contrary.

Article (494 ) 
(1) It shall be permissible to make a sale subject to testing, with an agreement on a known period, and if the parties do not specify such period in the contract, a reasonable period shall 
apply.  
(2) The seller shall be obliged to give the buyer the opportunity to test.

Article (495 ) 
(1) The purchaser may, within the testing period, either affirm or reject the sale, 
notwithstanding that the goods have not been tested, an d in the event of rejection the seller 
must be notified.  
(2) If the testing period expires and the purchaser remains silent, he having had the  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  109 
 opportunity to test the goods, his silence shall be taken as an acceptance and the sale shall 
be binding.

Article (496 ) 
If the object of the sale is destroyed in the hands of the purchaser after he has taken delivery of it, he shall be bound to pay to the seller the price specified, and if it is destroyed through a 
cause in which the purchaser played no part prior to delivery, such loss shall fall on the seller.

Article (497 ) 
The provisions relating to sales shall apply to the goods sold as from the date of the sale, 
after testing and the purchaser consenting.

Article (498 ) 
If the purchaser ceases to be of full capacity before he affirms the sale, the guardian or tutor or protector must elect what is in the purchaser's best interests, subject to the conditions and 
provisions laid down by law.

Article (499 ) 
If the purchaser dies before he makes his election, and he has an obligee the extent of whose 
rights exceeds the deceased's assets, the right of approval shall be transferred to him, 
otherwise that right shall be transferred to his heirs, and if they agree to affirm or reject the 
same, what they agree on shall  be binding, and if some affirm and some reject, the rejection 
shall be binding.

Article (500 ) 
The purchaser may not use the goods sold during the testing period save to the extent 
required by the testing as generally recognised, and if a greater use is made of which the aim 
is not testing, then the sale shall be binding.   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  110

Article (501 ) 
The provisions relating to sales subject to testing shall apply to sales subject to tasting, save 
that the right of election subject to tasting shall not devolve by inherit ance, and the sale shall 
be conclusive.

Article (502 ) 
The proceeds of the goods during the testing period shall belong to the seller, and the costs 
thereof shall be borne by him, but the proceeds shall be treated as part of the goods and shall belong to the purchaser if the sale becomes final.

Article (503 ) 
"Price" means that which the parties have agreed in consideration of the sale, whether it is 
greater or less than the value, and "value" means the (true) value of the goods, neither more 
nor less.

Article (504 ) 
If the parties to the sale agree to define the price by reference to the market rate, the rate shall be the market rate at the time and place of sale, and if there is no market at that place, the relevant place shall be that the current rates  of which are recognised by custom.

Article (505 ) 
If the contracting parties declare a price contrary to their true agreement, the true price shall 
be taken to be the valid one.

Article (506 ) 
(1) A sale may be by way of resale with a profit, a loss, or  at cost price if the capital value of 
the thing sold is known at the time of the contract, and the amount of the profit or loss is 
specified.  
(2) If it appears that the seller has exaggerated in declaring the amount of the capital value,  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  111 
 the purchaser may  reduce (the amount) by the amount of the excess.  
(3) If the capital value of the thing sold is not known when the contract is made, the 
purchaser may rescind the contract when he learns of it, and the same shall apply if the seller conceals a matter affec ting the thing sold or the capital value, and he shall lose his 
right to elect if the goods are sold or consumed or pass out of his ownership after delivery.

Article (507 ) 
(1) An increase in price on the part of the purchaser after the contract is made s hall attach to 
the principal of the contract if the seller accepts, and the designated price plus the increase shall become the consideration for the entire subject matter of the sale.  
(2) Any deduction by the seller from the designated price after the con tract is made shall 
attach to the principal of the contract if the purchaser accepts, and the remaining balance 
shall become the designated price.

Article (508 ) 
The price shall be payable immediately unless there is an agreement or a custom that it 
shoul d be deferred or paid in instalments over a known period.

Article (509 ) 
If the price is deferred or payable in instalments, the period of deferment shall commence as at the date of delivery of the goods.

Article (510 ) 
If the purchaser pays part of the price, he may not demand delivery of an equivalent part of 
the goods sold if dividing them up would result in a decrease in the value thereof.  
 
 
 
  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  112 
 2- Effects of sale  
a- Obligations of the seller  
1- Transfer of ownership

Article (511 ) 
(1) The ownership of the goods sold shall be transferred to the purchaser as soon as the sale 
is concluded, unless there is a provision of law or of the agreement to the contrary.  
(2) Each of the contracting parties shall (immediately) proceed to carry out  his obligations 
save such of them as are deferred.

Article (512 ) 
If the sale is of unascertained goods, ownership shall be transferred to the purchaser in the 
same manner as it is transferred in respect of a specifically ascertained thing.

Article (513) 
(1) If the price is deferred or payable in instalments, the seller may stipulate that the transfer of ownership to the purchaser be suspended until he pays the whole price, notwithstanding 
that the goods have been delivered.  
(2) If the price is paid in full, the transfer of ownership to the purchaser shall operate 
retrospectively to the time of the sale.  
 
2- Delivery of the property sold

Article (514 ) 
The seller must deliver the goods to the purchaser free of a ny third party right unless there is 
an agreement or provision of law to the contrary, and the seller must also do what is necessary on his part to transfer ownership to the purchaser.

Article (515 ) 
If, by law or in accordance with current practice, the nature of the goods sold requires the 
delivery of documents of title, the seller must deliver such documents to the purchaser, and  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  113 
 if he fails to deliver them or alleges that they have been lost and th ey then appear, the judge 
shall order him to deliver them, and if in the event of an allegation that they are lost, they do 
not appear, the purchaser may elect between rejecting or affirming the contract.

Article (516 ) 
The seller shall be obliged to deli ver the goods sold to the purchaser in the same condition 
as they were at the time of the sale.

Article (517 ) 
Delivery shall include the appurtenances of the thing sold, and such things as have been affixed to it or made for the use thereof in a permanen t manner, and everything which, by 
custom, is ancillary to the thing sold, notwithstanding that it is not mentioned in the contract.

Article (518 ) 
Contracts over buildings or trees shall include the land upon which the building stands, and the land to wh ich the roots of the tree extends, and a contract over land shall include the 
buildings and trees on it unless there is a stipulation or a custom to the contrary in either such contract over land and a contract over a house shall include the fixtures there in but not 
the moveables, unless the purchaser stipulates that they should be included in the contract.

Article (519 ) 
The sale of land shall not include crops growing on it in the absence of a provision or custom to the contrary.

Article (520 ) 
The sale  of trees, whether directly or by way of appurtenance to the land, shall include the 
fruits on them which have not been pollinated or have not budded as to the whole or greater part thereof, but if they have been pollinated or have budded as to the whole o r  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  114 
 greater part thereof, the fruit shall not be included in the sale unless there is a provision or a 
custom that they shall form part of the subject matter of the sale, and if the pollinated or 
budded part amounts to one half only, each part shall be treat ed (separately) as aforesaid.

Article (521 ) 
A contract for harvestable crops shall not include the second crop (in the same year) unless 
there is a provision or custom to the contrary.

Article (522 ) 
If the seller validly delivers the goods sol d to the purchaser, he shall not thereafter be liable 
for what happens to the goods.

Article (523 ) 
If the contract specifies the quantity of the goods to be sold and it appears that there is a shortfall or an excess in them, then, if there is no provisio n or custom in that regard, the 
following rules shall have effect:  
(1) If the goods sold would not be harmed by being divided, the excess belongs to the seller, 
and he may recover the same in specie, and any shortfall is to his account, whether the price 
is fixed per unit or by measure, or for the whole goods.  
(2) If the goods would be harmed by being divided and the price has been fixed by unit or measure, then the excess shall belong to the seller and he shall be entitled to the price 
thereof, and any sho rtfall shall be to his account. If however a price has been fixed for the 
goods as a lot, the excess shall belong to the purchaser, and there shall be no change in the 
price if there is a shortfall. 
(3) If the excess or shortfall places a greater obligation upon the purchaser than that for 
which he contracted to purchase or amounts to a different bargain for him, he shall have the 
option to rescind the contract unless the amount is minimal, and the shortfall does not 
prejudice the intention of the purchaser .  
(4) If the purchaser takes delivery of the goods sold knowing that they are short, he shall lose 
his right to elect to rescind the contract as referred to in the foregoing paragraph.   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  115

Article (524 ) 
No claim for rescission of a contract or for a reduction  in or supplement to the purchase 
price shall be heard after the expiration of one year from the date of delivery of the goods.

Article (525 ) 
(1) Delivery of the goods may be by actual delivery or by the seller leaving the way open to 
the purchaser to ta ke the goods, with permission for him to take them, without there being 
any obstacle to his coming into possession of them.  
(2) The delivery of anything  shall be according to the nature thereof, and in accordance with 
the agreement or custom.

Article (526 ) 
If the goods sold are in the possession of the purchaser prior to the sale in any capacity or for 
any reason, such possession shall be regarded as delivery in the absence of an agreement to the contrary.

Article (527 ) 
If the contracting parties agree t hat in a specific instance the purchaser should be regarded 
as having taken delivery of the goods sold, or if the law requires that certain instances 
should be regarded as amounting to delivery, constructive delivery shall be deemed to have 
taken place.

Article (528 ) 
Constructive delivery shall be deemed to have taken place by registration of the thing sold in the name of the purchaser if the law requires the registration of the transfer of ownership.

Article (529 ) 
Constructive delivery shall likewise b e deemed to have taken place in the two following 
cases:   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  116 
 (1) If the seller retains the goods sold in his possession at the request of the purchaser. 
(2) If the seller gives notice to the purchaser to pay the price and take delivery of the goods 
within a fi xed period, failing which they will be deemed to have been delivered, and he does 
not do so.

Article (530 ) 
(1) The seller shall be obliged to deliver the goods sold at the place where they are at the 
time the contract is made.  
(2) If it is stipulated in the contract, or if there is a custom, that the goods sold should be sent 
to the purchaser, delivery will only be made if the goods reach him, unless there is an 
agreement to the contrary.

Article (531 ) 
(1) If the goods sold are destroyed prior to delivery through a cause in which neither of the 
contracting parties played any part, the sale shall be cancelled and the purchaser shall be 
entitled to recover the price which he has paid.  
 (2) If part of the goods sold are lost, the purchaser shall have the option as he wishes either 
to cancel the sale or to take the balance for the appropriate portion of the price.

Article (532 ) 
 (1) If the goods sold are destroyed prior to delivery or if part of them is los t through the act 
of the purchaser, he shall be deemed to have taken delivery of the goods sold, and he shall 
be bound to pay the price.  
(2) If the seller has the right to elect in such circumstances and he chooses to cancel , the 
purchaser shall be liable either to provide the equivalent of the goods sold or the value 
thereof, and he shall be the owner of the remainder.

Article (533 ) 
(1) If the goods sold are destroyed prior to delivery through the act of a third party, the  
purchaser shall have the option as he wishes either to cancel the sale or to affirm it, and he  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  117 
 shall have a right of recourse against the person who has caused the loss either for 
equivalent goods or for the value thereof.  
(2) If part of the goods are des troyed, the purchaser may elect between the following 
options:  
(a) to cancel the contract;  
(b) to take the remainder for the appropriate proportion of the price and to rescind the 
contract with regard to the balance; or  
(c) to affirm the contract as to the  whole of the goods sold at the stipulated price, and to 
have recourse against the person who has caused the loss for that loss to be made good.

Article (534 ) 
(1) The seller shall ensure that the goods sold are free of the right of any third party who ma y 
object to the purchaser (sic) if the cause of that third party right antedates the contract of 
sale.  
(2) The seller shall also ensure that the goods sold are free of any third party right if such 
right is based on a cause arising after the sale out of hi s act.

Article (535 ) 
(1) Any claim by a third party for his rights over the goods sold prior to delivery thereof must 
be directed both against the seller and the purchaser.  
(2) If the claim is brought after delivery of the goods sold and the purchaser does not join the 
seller in the action at the appropriate time and a judgment is issued against him which 
becomes final, he shall lose his right of recourse for an indemnity if the seller proves that if 
he had been joined in the action the result would have been the dismissal of the third party's 
claim of right.

Article (536 ) 
(1) If judgment is passed affirming a third party right over the goods sold, such third party may have recourse against the seller for the price if he affirms the sale, and the goods sold 
shall then belong exclusively to the purchaser.   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  118 
 (2) If the third party claimant does not affirm the sale, the contract shall be cancelled, and 
the purchaser may have recourse against the seller for the price.  
(3) The seller shall compensate the purchas er for any useful improvement in the goods sold 
made by the latter calculated on the value thereof on the day of delivery to the third party 
claimant.  
(4) The buyer shall likewise make good to the purchaser any loss arising out of the third party claim to the goods sold.

Article (537 ) 
(1) Any condition that the seller shall not be liable for the price if there is a third party claim 
over the goods sold shall be invalid, and the sale shall be defective (voidable) on account of 
such condition.  
(2) If the purchaser knows that the goods sold are not the property of the seller, that fact 
shall be no bar to his having recourse for the price in the event of there being a third party 
right.

Article (538 ) 
If the third party right is based on an admission by the purchaser or his refusal to take the 
oath, he shall have no recourse against the seller.

Article (539 ) 
(1) If the purchaser makes a settlement with a third party claimant over property prior to judgment in favour of the latter, and the seller  denies the right of the claimant, it shall be 
open to the purchaser to prove that the claimant was justified in his claim, and, after proving 
the foregoing, the seller shall have the option either to pay the equivalent of the settlement 
amount or to retur n the price to the purchaser.  
(2) If settlement is made after judgment in favour of the third party claimant, the purchaser shall (sic) retain the goods sold, and he shall have a right of recourse against the seller for the price.  
   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  119

Article (540 ) 
(1) If a third party claim arises over part of the goods sold prior to the purchaser taking 
delivery of the whole of it, he may return what he has taken and recover the price, or he may 
accept the sale and have a recourse in respect of that part subject to the third party right.  
(2) If a third party right arises over part of the goods sold after delivery of the whole of them 
and the third party right gives rise to a defect in the remainder, the purchaser may return the 
goods and have a recourse against the seller for the price, or he may keep the remainder for 
the appropriate proportion of the price, and if the third party claim does not give rise to a 
defect and the part over which the third party claim has arisen is the lesser part, the 
purchaser may only have recourse for that part over which the third party claim has arisen.  
(3) If it becomes apparent after the sale that there is a right over the goods sold in favour of a third party, the purchaser shall have the option either to wait until that right cea ses, or to 
cancel the sale and have recourse against the seller for the price.  
(4) It shall be presumed in the case of an easement that the seller had stipulated that he should not be liable in respect thereof if such right was obvious, or if the seller ha d informed 
the purchaser of it.

Article (541 ) 
(1) If a third party claim is made after the goods have been destroyed in the hands of the 
purchaser, he shall make good to the third party claimant the value thereof as at the date of the purchase, and shall  have a right of recourse against the seller for the price.  
(2) If the value which the purchaser has to make good is greater than the stipulated price, he 
shall have a recourse for the difference and shall be entitled to an indemnity  for the damages 
due to him in accordance with Article 536(4).

Article (542 ) 
The third party claimant may claim against the purchaser for any yield deriving from the  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  120 
 goods sold or exploitation made thereof after deducting any expenses necessary to produc e 
such a profit, and the purchaser shall have a right of recourse against the seller for anything 
he has paid to the third party claimant.  
 
3- Liability for latent defects

Article (543 ) 
(1) A sale shall be deemed to have been concluded on the basis that t he goods sold are free 
of any defects, save such as are within the customary tolerance.  
(2) The general rules relating to the option for defects shall apply to the contract of sale, 
subject to the provisions of the following Articles.

Article (544 ) 
(1) I f an old (pre -existing) defect appears in the goods sold, the purchaser shall have the 
option as he wishes either to return the goods or to accept them at the stipulated price, but he may not keep them and claim for any reduction in price (sic: should poss ibly be "value") 
caused by the defect.  
(2) The defect shall be deemed to be old if it was present in the goods sold prior to the sale, or if it arises thereafter while the goods are still in the hands of the seller prior to delivery.  
(3) A new defect (whic h arises while the goods are) with the purchaser shall be regarded as 
an old defect if it is attributable to an old cause which existed in the goods when they were still with the seller.  
(4) For a defect to be regarded as old it must have been latent, and a latent defect is one 
which cannot be observed by an external inspection of the goods, or which would not be 
apparent to the ordinary man, or which could not be discovered by any person other than an 
expert, or which would only be apparent upon testing.  
 
 
 
  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  121

Article (545 ) 
The seller shall not be responsible for old defects in the following circumstances:  
(1) If the seller disclosed the defect to the purchaser at the time of sale.  
(2) If the seller accepted the defect after he had seen i t, or after learning thereof from 
another person.  
(3) If the purchaser purchases the goods with knowledge of the defect therein.  
(4) if the seller sells the goods with a condition that he is not to be liable for any defect 
therein, or for a specified defect, unless the seller deliberately conceals the defect or if the 
buyer is prevented from seeing the defect.  
(5) If the sale is by public auction by the judicial or administrative authorities.

Article (546 ) 
If the purchaser disposes the goods as owner aft er becoming aware of the old defect, his 
option shall lapse.

Article (547 ) 
If goods with an old defect are lost in the hands of the purchaser or if he consumes them 
prior to his knowledge of the defect, he shall have a right of recourse against the seller for 
any reduction in price (sic) caused by the defect.

Article (548 ) 
(1) If a new defect arises in the goods in the hands of the purchaser, he may not return them 
on the grounds of an old defect, but he shall be restricted to a claim against the seller for the 
reduction in price, unless the seller agrees to take the goods back with the new defect.  
(2) If the new defect is removed, the purchaser shall again have a righ t to return the goods to 
the seller on the grounds of the old defect.  
 
  
  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  122

Article (549 ) 
(1) If an addition is made to the property sold which prevents its being returned, and an old 
defect in it subsequently becomes apparent to the purchaser, he shall have a right of 
recourse against the seller for the reduction (in value) caused by the defect, but the seller shall not have the right to recover the property sold.  
(2) An addition which prevents return is any thing from the property of the purchaser which 
becomes joined with the property sold.

Article (550 ) 
(1) If several things are sold under one agreement and a defect appears in part of them prior 
to delivery, the purchaser shall have the option either to accept them at the stipulated price, 
or to return the whole of them.  
(2) If several things are sold under one agreement and an old defect becomes apparent in 
part of them after delivery, and no loss would be caused by dividing them, the purchaser 
may return the defective part for an appropriate portion of the price, but he may not return 
the whole of the goods without the consent of the seller, but if loss woul d be caused by 
dividing them, he may either return the whole of the goods or accept them at the full price.

Article (551 ) 
(1) If the property sold has a defect whereby it may be returned, and the purchaser has 
created a third party right thereover prior to his knowledge of the defect, but the property 
still remains within his ownership, he may return it to the seller with that defect free of such 
third party right if the property has not been altered during that period.  
(2) If the purchaser creates a thir d party right after becoming aware of the defect, he shall 
lose his right to return goods, and if the property has been altered it shall be treated as a new 
alteration to property with an old defect.  
  
 
  
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  123

Article (552 ) 
The right of the purchaser to return the property on the grounds of a defect shall not lapse 
by reason of a change in the value thereof.

Article (553 ) 
(1) Any yield of the property returned on the grounds of a defect which is not regarded as 
part of the property shall belong to the purchaser  as from the time he receives the goods 
until the time the sale is cancelled, and he shall not have any recourse against the seller for any moneys expended on the property.  
(2) Any yield of the property sold which is deemed to be part of it shall belong to the seller.  
(3) As for property which has no yield, the purchaser shall have a right of recourse against the seller for moneys spent on it.

Article (554 ) 
Liability for property returned on the grounds of a defect shall pass from the purchaser to 
the sel ler as soon as the seller agrees to take it back from the purchaser notwithstanding that 
he has not in fact taken it back, or immediately upon proof in a court of law of the defect in 
the property sold giving a right to return the same, notwithstanding tha t there is no order 
that it be returned, in the event that the seller is present, and if he is absent the liability shall 
only pass to him upon the issue of a judgment for the return of the property.

Article (555 ) 
(1) A claim of liability for a defect sh all become time barred upon the expiration of six 
months from receipt of the property unless the seller has undertaken to be responsible for a 
longer period.  
(2) The seller may not rely on that time limit if it is approved that the concealment of the defec t was by a fraud on his part.  
 
   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  124 
 b- Obligations of the purchaser 
1- Payment of the price and taking delivery of the goods

Article (556 ) 
The purchaser must pay the price when the contract is initially made and before the delivery 
of the property and before a claim is made for it, unless a contrary agreement has been 
made.

Article (557 ) 
(1) The seller may retain the property until the price due to him is paid, notwithstanding that 
the purchaser may have delivered a pledge or a guarantee.  
(2) If the seller a grees to defer the price, his right to retain the property sold shall lapse, and 
he shall be obliged to deliver it to the purchaser.

Article (558 ) 
If the property sold is destroyed in the hands of the seller while he is retaining it, the loss shall fall on the purchaser unless the destruction of the property was due to the act of the 
seller.

Article (559 ) 
(1) If the purchaser takes the property in the sight of the seller before paying the price and the seller does not prevent him, that fact shall amount  to permission to take delivery.  
(2) If the purchaser takes the property sold before paying the price, without the permission 
of the seller, the seller shall have the right to recover it, and if the property is destroyed or 
becomes defective in the hands o f the seller, he shall be deemed to have taken delivery of it.

Article (560 ) 
If the purchaser damages the goods, even unintentionally, that shall be regarded as taking delivery.  
   
Federal Law No. (5) of 1985 C oncerning the I ssuance of the C ivil Transactions Law of the  United Arab Emirates  125

Article (561 ) 
If the purchaser does not know where the property sold is at the time of the contract and he 
thereafter finds out, he shall have the option as he wishes to cancel or to affirm the sale, and 
to take delivery of the property at the place where it is.

Article (562 ) 
(1) The purchaser shall be obliged to hand over t he price if it is immediately payable at the 
place where the property is at the time of the contract, unless there is an agreement or a custom to the contrary.  
(2) If the price is a deferred debt owed by the purchaser and there is no agreement for payment thereof at a specified place, he shall be obliged to pay it at the residence of the 
purchaser (sic) when payment falls due.