This article examines the concept of force majeure clauses, the statutory framework governing it under UAE law, its role in commercial agreements along with its legal consequences.
Concept and Legal Nature of Force Majeure
The term “force majeure,” derived from French legal terminology, refers to events that occur outside the control of contracting parties and render the performance of contractual obligations absolutely impossible. Technically, force majeure encompasses circumstances that satisfy the following conditions:-
- Unforeseeable – The event must not have been reasonably foreseeable at the time the contract was concluded. If the risk of the event could have been anticipated, the parties are expected to allocate that risk through contractual provisions.
- Externality – The event must arise from external circumstances beyond the control of the party invoking the doctrine. A party cannot rely on force majeure where the inability to perform results from its own fault or negligence.
- Unavoidability – The consequences of the event must be unavoidable despite reasonable efforts to mitigate its impact.
- Impossibility of Performance – The event must render contractual performance objectively impossible rather than merely more expensive or commercially impractical.
The burden of proof lies with the party invoking the doctrine, and UAE courts generally require strong evidence demonstrating the existence and impact of the force majeure event.
Typical examples of force majeure events include natural disasters, wars, governmental actions, embargoes, pandemics, strikes, and other extraordinary events that absolutely prevent contractual performance.
Statutory Framework under the UAE Civil Code
In the United Arab Emirates (UAE), the legal treatment of force majeure differs from that of many common law jurisdictions. Whereas common law systems typically recognize force majeure only if expressly incorporated in the contract, UAE law incorporates the doctrine directly through statutory provisions contained in the UAE Civil Transactions Law (Federal Law No. 5 of 1985) commonly referred to as the UAE Civil Code which is applicable until 1 June 2026 when the new Civil Transactions Law (Federal Decree-Law No. 25 of 2025) comes into force. The statutory framework is supplemented by general principles of commercial law contained in the UAE Commercial Transactions Law (Federal Decree-Law No. 50 of 2022) and the overarching principle of good faith governing contractual performance. Together, these legal statutes determine the operation and effect of force majeure clauses in contracts governed by UAE law.
Article 249 – Exceptional Circumstances (Doctrine of Hardship)
The UAE Civil Code recognizes a related but distinct concept under Article 249, commonly referred to as the doctrine of exceptional circumstances or hardship. Article 249 applies where an unforeseen public event occurs which does not render performance impossible but makes the contractual obligation excessively onerous or threatens the obligor with grave loss. In such cases, the court has the authority to reduce the burdensome obligation to a reasonable level in order to restore contractual balance. Unlike force majeure under Article 273, the hardship doctrine does not automatically terminate the contract. Instead, the court may adjust the obligations of the parties to mitigate any commercial hardship. The distinction between impossibility (force majeure) and excessive hardship is therefore critical under UAE law.
Article 273 – Impossibility of Performance
Article 273 of the UAE Civil Code represents the cornerstone of the force majeure doctrine under UAE law. It provides that where force majeure occurs in a bilateral contract and renders the performance of the corresponding obligation impossible, the contract shall be automatically terminated and the obligation extinguished.
The article establishes three key legal consequences:-
- If the force majeure event results in total impossibility, the contract is rescinded automatically by operation of law. The parties are discharged from their obligations without liability.
- If the impossibility is partial, only the part of the contract that has become impossible is extinguished, while the remainder continues to operate.
- In the context of continuing or long-term contracts, the obligation may be suspended for the duration of the force majeure event if the impossibility is temporary.
These principles reflect the civil law approach that contractual obligations cannot be enforced where performance has become objectively impossible due to events beyond the control of the parties.
Article 287 – Exemption from Liability
Further, Article 287 of the UAE Civil Code further reinforces the protection afforded to parties affected by force majeure. The provision states that a person shall not be liable to compensate for damage if it arises from a cause beyond their control and played no part such as natural disaster, unavoidable or sudden accident, force majeure or the act of a third party or act of the person suffering loss unless there is any legal provision or agreement to the contrary. This provision establishes an important defense against claims for damages. Thus, if contractual obligations cannot be performed, the party affected by the force majeure event may rely on Article 287 to avoid liability provided that the causal connection between the event and the failure to perform can be established.
Contractual Force Majeure Clauses
Given the UAE’s position as a global commercial hub, force majeure clauses are particularly relevant in cross-border transactions. Although UAE law expressly provides statutory relief, commercial agreements should typically include explicit force majeure clauses. These clauses serve to clarify the scope of events that may trigger relief and to regulate the procedure for invoking such relief. As stated earlier, commercial contracts often include a list of events such as natural disasters, war, terrorism, governmental action, labor strikes, epidemics, and infrastructure failures. These lists are frequently followed by broader language covering events beyond the reasonable control of the parties.
Thus, force majeure clauses commonly perform several functions such as:
- Defining the events that constitute force majeure.
- Establishing notification procedures.
- Specifying the consequences of such events.
- Allocating the risk of non-performance between the parties.
Role of Force Majeure in Commercial Contracts
Force majeure clauses play a particularly significant role in commercial contracts across several sectors. Some of these sectors are inter alia enlisted below.
- Construction and Infrastructure – Large-scale infrastructure projects are highly susceptible to delays caused by weather conditions, supply disruptions, or government actions. Construction contracts therefore should contain detailed provisions addressing force majeure events and their consequences.
- International Trade and Supply Agreements – Supply chain disruptions, port closures, trade sanctions, or transportation failures may trigger force majeure clauses in international trade agreements and thus should be minutely looked into.
- Technology and Service Agreements – Technology service contracts should comprehensively address events such as cyberattacks, telecommunications failures, or government restrictions affecting digital infrastructure.
Legal Consequences of Force Majeure
When force majeure is successfully invoked under UAE law, several legal consequences may arise depending on the nature of the event and the contractual provisions involved.
- Suspension of Obligations – Where the force majeure event is temporary, the contractual obligations may be suspended for the duration of the event. Performance is resumed once the impediment ceases.
- Extension of Time – In certain commercial arrangements, particularly construction contracts, the affected party may be granted an extension of time for performance.
- Termination of the Contract – If the event results in permanent impossibility of performance, the contract may be automatically terminated pursuant to Article 273 of the Civil Code.
- Exemption from Liability – The party affected by the force majeure event is generally relieved from liability for damages resulting from the non-performance of the contractual obligation.
Conclusion
Force majeure constitutes an essential risk allocation mechanism in commercial contracts. Under UAE law, the doctrine is firmly grounded in statutory provisions of the currently applicable UAE Civil Transactions Law (Federal Law No. 5 of 1985), particularly Articles 249, 273, and 287. These provisions establish the legal consequences of unforeseen events that render contractual performance impossible or excessively burdensome. UAE courts interpret force majeure strictly and require clear evidence demonstrating that the event was unforeseeable, unavoidable, and directly responsible for the failure to perform. Accordingly, parties entering into commercial agreements governed by UAE law must ensure that force majeure clauses are carefully drafted to align with the statutory framework and judicial practice. A well-structured force majeure clause not only provides contractual clarity but also ensures that the parties’ rights and obligations remain balanced in the face of extraordinary circumstances. In an increasingly interconnected global economy, such clauses remain indispensable for managing commercial risk and preserving contractual stability.
For further insight into force majeure, contractual risk allocation, and dispute mitigation under UAE law, please contact Rajiv Suri at r.suri@alsuwaidi.ae