Force Majeure UAE
What is Force Majeure?
The French term force majeure originates from the words which mean "superior force." The legal definition describes it as a situation where unexpected events occur which neither party can control and which impede their ability to meet contract requirements.
Generally, the force majeure definition encompasses events as follows:
- Natural disasters (earthquakes, floods, hurricanes)
- War or armed conflict
- Government restrictions or regulations
- Pandemics and public health emergencies
- Strikes or large-scale labour disruptions
The force majeure legal definition exists in different ways throughout various legal services in uae. The main principle of the definition states that when an unforeseen event makes it impossible to complete obligations, the affected party no longer needs to face penalties.
The concept is acknowledged through Article 273 of the UAE Civil Code, which establishes rules for businesses in the UAE. RH and HALE Lawyers & legal consultants in dubai state that the law applies to situations where parties cannot complete their contractual obligations because of unforeseen circumstances.
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Force Majeure Under UAE Law
The concept of force majeure UAE law is governing the concept of force majeure in the UAE is primarily based on the UAE Civil Code.
Under UAE law:
- If performance becomes impossible due to force majeure, the obligation is extinguished
- If there is partial impossibility due to force majeure, only part of the contract is cancelled
- Court determination of force majeure is based on facts and interpretation of the contract
If you’re not sure whether your case falls into the category of force majeure, it would be prudent to consult with legal consultants in Dubai to minimize any potential risks.
Common Conditions Under Force Majeure
Every disruption does not come under the ambit of force majeure. The situations that qualify as legally acceptable under force majeure conditions include the following:
- Natural calamities (earthquake, floods)
- Acts of government or regulations
- Consequences of war, unrest or political upheaval
- Epidemics or health problems
- Disturbances in the supply chain
Financial distress or financial market disturbances do not qualify for force majeure unless stated in the contract.
What is a Force Majeure Clause in a Contract?
Force majeure clause in a contract refers to a contractual provision which outlines how a party will react in case of unforeseen interruptions.
When discussing what is force majeure clause, it includes:
- List of events which will be considered force majeure
- Circumstances under which a force majeure will be granted
- Notification of force majeure
- Legal implications of force majeure
The proper drafted force majeure contract clause helps in providing a clear and concise meaning.
Important Features of an Effective Force Majeure Clause in Contracts
The main features of an effective force majeure clause in contracts include the following:
- Definition of Events
There should be clear definitions of the events.
- Timelines
The timeline is supposed to be outlined clearly in the clause.
- Mitigation Obligations
There should be obligation to mitigate the effects of the disruption reasonably.
- The Legal Consequences
There must be consequences of the clause on the obligations.
- Duration of the Clause
The clause must have clearly specified duration.
Enforcing a Force Majeure Clause in UAE: Challenges
Applying a force majeure clauses UAE is not always straightforward task. In fact, several issues could come up during the course of business activities. These issues could include:
- Issues of qualifying the event
- Breach of the notice provisions
- Impossibility vs Inconvenience
- The issue of wording of the clause
Inappropriate application of the force majeure clause in contract could amount to breach of contract and consequences thereof.
Practical Application in Contracts
Force majeure clauses are frequently found in commercial and real estate contracts. For instance, any delay caused by an external disruption may fall under force majeure.
Nevertheless, it does not apply to all delays. The disruption must satisfy the conditions set by UAE law and the contract terms.
To learn more about force majeure in real estate transactions, visit our article on off-plan property cancellation before SPA and before Oqood registration.
How RH & HALE Can Help
At RH & HALE, one of the best law firms in UAE, we offer legal services in UAE for contract drafting and dispute resolution in UAE.
We help you with:
- Force majeure clause drafting
- Contract review
- Risk analysis
- Compliance
- Dispute resolution
- Litigation
We make sure that your contracts have robust legal provisions for any contingencies.
Why You Need Legal Knowledge?
The knowledge of what is a force majeure clause is just the beginning of the road. The true challenge lies in the efficient use of the clause.
Improper use of a force majeure clause can result in:
- Consequences for the termination of the contract
- Fines
- Complications in business relations
With the right legal approach, such problems will never occur.
Get Professional Advice on Force Majeure
In case you are facing unforeseen disruptions in your business or need help drafting a force majeure clause UAE, timely legal advice is the need of the hour.
Delays or wrong interpretation of force majeure UAE law may put your business in a precarious position.
Seek the expertise of experienced legal consultants at RH & HALE today.
Frequently Asked Questions
What is a force majeure clause in a contract?
The force majeure clause of a contract is a provision of a contract intended to protect parties when unforeseen events hinder them from fulfilling the obligations of a contract.
What are the conditions of force majeure under UAE law?
Force majeure conditions include events such as natural disasters, government restrictions, war, or pandemics that hinder parties from fulfilling obligations of a contract.
Can financial loss be a condition of force majeure?
No. Under normal circumstances, financial hardships cannot be a condition of force majeure unless specified by the terms of a contract.
When can force majeure be invoked under UAE law?
Force majeure can be invoked when an unforeseen event beyond a party’s control hinders them from fulfilling a contract and when it meets the conditions of force majeure UAE law.
Is force majeure different from force majeure?
No. “Force majeure” is simply a misspelling of the word “force majeure,” and both terms refer to the same concept.