Last reviewed: 5 October 2026
Your standard contract may have worked well for years. That does not mean it is ready for your next transaction. The UAE’s new Civil Transactions Law, issued by Federal Decree-Law No. 25 of 2025, took effect on 1 June 2026, replacing the 1985 law. Businesses using UAE-law agreements should review their templates and negotiation practices. [1]
A review does not mean every existing agreement must be rewritten or signed again. The relevant questions are which law governs the transaction, when the agreement and relevant events occurred, whether special legislation applies, and which provisions create practical exposure. This article concerns the federal civil-law framework; DIFC and ADGM transactions require separate analysis.
Start before the signature
The new law expressly addresses negotiations, disclosure and confidentiality. Entering negotiations does not itself oblige a party to conclude a contract, but the parties’ conduct can still have legal consequences. Essential and decisive information cannot simply be excluded from the disclosure obligation by agreement. Unauthorised use or disclosure of confidential information obtained during negotiations or a contract can also attract liability. [2]
For a business, the practical response is to organise the negotiation record. Identify who can make commitments, what information has been provided, and which assumptions remain unverified. A sales team should distinguish a confirmed delivery date from an estimate that depends on regulatory approval or a supplier’s availability.
Consider an illustrative equipment supply negotiation. The buyer explains that delivery before a particular opening date is essential. The seller knows a necessary approval remains outstanding but continues presenting the date as confirmed. The risk is not solved merely by placing an entire-agreement clause in the eventual contract. The information shared during negotiations needs its own review.
Make the contract match the transaction
A useful agreement explains what must be delivered, how acceptance works and when payment becomes due. Broad descriptions such as “complete business support” often leave both parties with different expectations. List the deliverables, client dependencies, exclusions and procedure for approving additional work.
For recurring services, consider a master agreement supported by clear individual orders. The government’s explanation of the new law highlights its recognition of framework agreements for continuing or repeated dealings. [3] The drafting task is to decide which terms apply to every order and which can change. Specify the order of priority if a purchase order conflicts with the master agreement.
Check how your team actually operates. If staff regularly approve changes by email, a contract that recognises only a signed paper variation may create unnecessary uncertainty. Agree who can approve a variation, how price and timing are recorded, and where the final version will be stored.
Review termination and liability together
Termination provisions should answer practical questions. What constitutes a material breach? Is there an opportunity to remedy it? Where must notice be sent? What happens to deposits, completed work, customer data and intellectual property after the relationship ends?
Avoid assuming that a clause headed “automatic termination” eliminates every procedural or legal requirement. Its effect depends on the wording, the facts and applicable law. Before suspending services or terminating an important agreement, check both the contractual steps and any mandatory rules.
Liability clauses need the same attention. A monetary cap, exclusion of particular losses or agreed compensation provision should be assessed against the transaction and applicable legal limits. Copying a foreign template without review can produce protection that looks stronger on paper than it is in a dispute.
Prioritise the contracts that matter most
Begin with agreements involving large advances, long commitments, sensitive information, intellectual property or business-critical suppliers. Next review templates used frequently by the sales and procurement teams. A short, workable template that staff understand is often more useful than a long document they routinely bypass.
Keep existing agreements separate from new templates. For each live contract, record its date, renewal mechanism, governing law and any planned variation. Have the transitional position assessed before applying a new rule to an older transaction. An amendment should identify exactly what changes and what continues.
Practical contract review checklist
- Identify the governing law, dispute forum and any sector-specific rules.
- Record material negotiation statements and outstanding assumptions.
- Define deliverables, acceptance criteria and payment milestones.
- Set a clear process for variations and authorised approvals.
- Check notice, suspension, termination and handover provisions.
- Review liability allocation and confidentiality obligations.
- Train the people who issue quotations and sign contracts.
The most useful outcome is a contract process that works from the first quotation to the final payment. Assign an owner to the approved templates and keep a version register, so outdated wording does not return through an old email attachment.
For a review of your commercial agreements and contracting process, contact Prosperiti about contract advisory.
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This article provides general information. The applicable rules and transitional position depend on the agreement and circumstances.
Official sources
[1] Dubai Legal Affairs Department — Civil Transaction Law Update 2026
[2] Federal Decree-Law No. 25 of 2025 — Civil Transactions Law
[3] UAE Government explanation of the new Civil Transactions Law