The New UAE Civil Transactions Law: What Changed on 1 June 2026

Federal Decree-Law No. 25 of 2025 promulgating the Civil Transactions Law was issued on 1 October 2025 and published in Official Gazette No. 809 on 14 October 2025. Article 2 repeals Federal Law No. 5 of 1985, as amended; Article 3 brought the new law into force on 1 June 2026. On 24 September 2026 the federal legislation portal listed it as active, with no amendment.

It is the general law behind most onshore private-law relationships: forming and interpreting contracts, non-performance, liability for harm, capacity, named contracts such as sale and contracts for work, and property rights. Whether you see it called “Federal Law No. 25”, “the new Civil Code” or “the 2026 civil law”, its correct name is Federal Decree-Law No. 25 of 2025.

• Federal Decree-Law No. 25 of 2025 — uaelegislation.gov.ae ↗

Mainland and commercial free zones. The law is federal and applies on the mainland of every emirate — in the Dubai Courts, the Abu Dhabi courts and the other emirates' courts alike; only the court differs. Its position inside a particular commercial free zone was not confirmed for this guide, so ask a lawyer.

DIFC. The DIFC has its own civil and commercial legislation, applied by the DIFC Courts; a contract governed by DIFC law is not governed by this code. The federal article usually cited for the financial free zones' separate status was not confirmed, so none is cited here.

ADGM. English common law, including equity, and a set of English statutes apply in ADGM through the ADGM Application of English Law Regulations 2015. For both zones, which law governs a contract turns on its governing-law clause and connections, not just an address — see our guide on which court hears a DIFC or ADGM contract.

Other federal laws that come first. Special provisions are not repealed by later general ones unless expressly stated (Art. 4(3)), and the special rules for particular contracts, in this law or others, apply, with the general provisions filling gaps (Art. 115). In commercial matters the Commercial Transactions Law (Federal Decree-Law No. 50 of 2022) looks first to the parties' agreement (subject to its mandatory provisions), then to commercial custom, and only then to civil provisions. Where no legislation applies, the court turns to Islamic Shari'ah, then custom (Urf), then natural law and the rules of justice (Art. 1).

The law states the general rule itself: it “shall not apply retroactively to preceding facts and acts, unless the law provides otherwise” (Art. 4(1)). No article was found on contracts signed earlier that continue after 1 June 2026, contracts renewed or amended after that date, or pending cases. Some commentary states a firm rule for older contracts; this guide does not, because the text read contains none.

Three transitional rules are settled. Capacity rules apply to everyone who meets their conditions, and where a person with full capacity under the old rules has limited capacity under the new ones, their earlier acts are unaffected (Art. 5). New limitation provisions apply to every period not completed on 1 June 2026; a shorter new period runs from that date, unless what remains of the old one is shorter (Arts. 6–7). Evidence follows the rules in force when it was, or ought to have been, prepared (Art. 8).

Four questions to answer before anything else. When was the contract signed? Has it been renewed, extended or amended since, and on what terms? What law does it choose, and which court or arbitration does it name? Does it have a DIFC or ADGM connection? Take the answers and the contract to a lawyer, who decides which text governs which part of the relationship.

Each row reads: topic — former position (where confirmed) — new position — what it means — who it affects — status. “Confirmed” means checked against the gazetted text of Federal Decree-Law No. 25 of 2025 for this guide; “Reported” means described in commentary but not confirmed, so no article number is given.

Repeal and commencement — 1985 law in force — repealed (Art. 2); new law from 1 June 2026 (Art. 3) — anything citing the 1985 law as current is out of date — everyone — Confirmed.

Application in time — not compared — no retroactivity unless the law provides otherwise, with rules for capacity, limitation and evidence (Arts. 4–8) — older contracts need individual review — anyone whose contract straddles 1 June 2026 — Confirmed.

Age of majority — a higher age — 18 Gregorian years (Art. 84(2)) — see the next section — young adults, parents, guardians, businesses — Confirmed.

Negotiation and disclosure — not compared — good-faith negotiation and a mutual duty to disclose decisive information that cannot be limited by agreement (Arts. 121–122) — due diligence and term sheets — anyone negotiating a deal — Confirmed.

Framework agreements — not compared — expressly recognised; their terms form part of each contract made under them unless agreed otherwise (Art. 138) — master supply and service agreements — suppliers and distributors — Confirmed.

Choice of law — not compared — the chosen law; failing that, common domicile; failing that, the place where the main obligation is performed (Art. 19) — cross-border contracts — Confirmed.

Hardship — not compared — the court may reduce the obligation or rescind the contract, and contracting out is void (Art. 224) — long-term contracts — Confirmed.

Force majeure — not compared — impossibility extinguishes the corresponding obligations and rescinds the contract automatically (Art. 236) — any bilateral contract — Confirmed.

Liability for harm — not compared — chapter from Art. 245; moral harm compensable (Art. 254); Diya or Arsh a floor, not a cap (Art. 259(2)) — injury and damage claims — Confirmed.

Limitation for harm — three years from awareness, fifteen-year longstop (1985 law, Art. 298) — the same (Art. 258) — unchanged — injured parties — Confirmed.

Decennial liability — not compared — Arts. 821–824, with the main contractor–subcontractor relationship excluded (Art. 821(4)) — contractors, subcontractors and project owners — relied on after a second verification round; Book Two not read directly for this guide.

Betting and wagering — void — still void, the rule relocated to Art. 946(4); only a six-month reclaim remedy dropped — status as for decennial liability.

Agency — not compared — the code's agency rules and the Commercial Agencies Law (Federal Law No. 3 of 2022) remain separate regimes (Arts. 4(3), 115) — agents and distributors — Confirmed as to the relationship; chapter numbering not stated.

Reported, not confirmed (no article numbers): a revised court power over agreed-compensation (penalty) clauses; contract-for-work changes on termination for convenience, lump-sum adjustment and notices; the general limitation period for contract claims; and the period for a decennial claim.

• UAE legislation portal ↗

Article 84(2): “A person reaches the age of majority upon completing eighteen (18) Gregorian years.” The age under the former code was higher; the old figure is not restated here because it was not re-checked for this guide.

What changes at 18. Eighteen is now the civil code's age of majority, and its capacity rules apply to everyone who meets their conditions (Art. 5(1)). Banks, land departments and licensing authorities apply their own procedures, and whether each has updated them was not confirmed — check with the institution.

What this law does not change. Other age rules — for example on criminal responsibility or driving — are set by separate laws, not by this code.

If you were already 18, 19 or 20 on 1 June 2026. No article specific to that group was found; the code sets majority at 18 and applies its capacity rules to everyone who meets them. How an existing guardianship order is formally closed is not addressed in the text read — the court that made it, or a lawyer, can confirm the step. Do not assume it ends automatically.

For parents and guardians. The guardian of a minor's property is the father, then the father's testamentary guardian, then the paternal grandfather, then the court or its appointee (Art. 150). After investigation, a court may authorise a discerning minor who has completed 15 Gregorian years to administer all or part of their property, at the request of the guardian, the tutor or the minor (Art. 149(1)).

For businesses that serve young customers. If onboarding, terms or age checks were built around the former civil-law age, review them against 18 — remembering that sector-specific age rules come from other laws.

Article 121(1): “The initiation of pre-contractual negotiations, their conduct, and their termination shall be in accordance with the requirements of good faith.” Negotiating does not oblige anyone to sign, but negotiating or breaking off in bad faith can create liability for the actual damage caused.

Article 122 requires each party to disclose information of “decisive importance to the consent of the other party”, and the parties “may not agree to limit the obligation of disclosure” — a clause that tries is void. Article 138 recognises framework agreements: a master agreement's principal terms form part of each contract made under it unless agreed otherwise.

For an SME, that means keeping a record of negotiations, disclosing what you know to be decisive, asking direct questions, ending talks for reasons you could explain, and reading master agreements together with their call-off terms. A corporate and commercial lawyer can adapt your templates.

Hardship. Where “exceptional, general circumstances” that could not have been foreseen make performance onerous and threaten the debtor with serious loss, the court may reduce the obligation to a reasonable limit or rescind the contract, and “any agreement to the contrary shall be void” (Art. 224). The power belongs to the court: a counterparty's letter invoking hardship is a position, not a ruling.

Force majeure. In bilateral contracts, force majeure that makes performance impossible extinguishes the corresponding obligations and rescinds the contract automatically; partial and temporary impossibility have their own rules (Art. 236).

Penalty and liquidated-damages clauses. Commentary reports that the new code revises the court's power to adjust agreed compensation. That provision sits in a part of the text that could not be read for this guide, so no rule or article is stated, and provisions of the repealed 1985 law still quoted on the point no longer apply. For what to do when the other side broke the contract, see our page on that situation.

The chapter begins at Article 245: causing harm obliges the person responsible to compensate, even one who lacks discernment (Art. 246); direct harm creates liability without further condition (Art. 247); and an external cause such as force majeure or the injured party's own act is a defence (Art. 249). Moral harm is expressly compensable (Art. 254), compensation covers loss suffered and lost profit that are a natural consequence (Art. 255), and where Diya or Arsh is due the court may add compensation for harm they do not cover (Art. 259(2)). Our guide to claiming for an injury has the detail.

Decennial liability. The decennial-liability rules are now Articles 821–824, and Article 821(4) excludes the relationship between a main contractor and its subcontractor — which matters for how defect risk is allocated down a contracting chain. These points rest on a second verification round that relied on two independent sources quoting the statutory text; Book Two could not be read directly for this guide. The period for bringing a decennial claim was not confirmed.

Contracts for work (muqawala). Commentary reports changes on termination for convenience, lump-sum price adjustment and notices. They were not confirmed on the gazetted text, so no article is cited; if a counterparty relies on one, ask for the exact article and have a lawyer read it. LEXNOVA's Construction Disputes & Claims page and our guide to FIDIC contracts in the UAE go further.

Betting and wagering contracts were not legalised. The voidness rule was relocated to Article 946(4); only the narrower six-month reclaim remedy was dropped.

Agency. The code's general agency (wakala) rules sit alongside the Commercial Agencies Law, Federal Law No. 3 of 2022, a separate special law for registered commercial agencies, and the code itself preserves special provisions (Arts. 4(3), 115). See our pages on a terminated distribution or agency agreement and on franchising and commercial agency.

Harm claims: unchanged — three years from awareness of the damage and the person responsible, with a fifteen-year longstop (Art. 258, matching Art. 298 of the 1985 law).

Claims between merchants: five years from the date performance fell due, under the Commercial Transactions Law (Federal Decree-Law No. 50 of 2022, Art. 92), in force since 2 January 2023. That is not a 2026 change and not part of the civil code; pages crediting the new civil code with shortening commercial limitation cite the wrong law.

Contract claims generally: the period under the new code was not confirmed for this guide, and the repealed 1985 law's general period should not be relied on. A claim of absolute nullity lapses fifteen years after the contract was concluded (Art. 187(3)). Periods running on 1 June 2026 follow Articles 6–7. A lawyer computes your deadline.

• Federal Decree-Law No. 50 of 2022 — uaelegislation.gov.ae ↗

Ask, in writing, for the exact provision relied on. Check the signing date, any renewal or amendment, the governing-law and jurisdiction clauses and any DIFC or ADGM connection. Check whether it rests on a provision confirmed in the new text — hardship, force majeure, disclosure — or on one only reported in commentary. Reply in writing, reserving your position, and do not concede price or performance changes, or stop performing, before taking advice. If it becomes a claim, see our guide to filing a civil case in the Dubai Courts.

A contract dispute, or a counterparty invoking the new law — litigation or corporate and commercial lawyers — our page for when the other side broke the contract.

New deals, templates and master agreements — corporate and commercial lawyers.

A construction project, defects or decennial liability — construction disputes lawyers — our guide to FIDIC contracts in the UAE.

A property sale, lease or off-plan purchase — real estate lawyers.

Guardianship, turning 18 or a minor's property — family lawyers.

An injury or other harm — personal injury lawyers — our guide to claiming for an injury.

Distribution, agency or franchise — corporate and commercial or franchise lawyers — our page on a terminated distribution or agency agreement.

A DIFC or ADGM contract — a lawyer who practises before those courts — our guide on which court has jurisdiction.

LEXNOVA is a lawyer-matching service, not a law firm. It does not read or advise on your contract and promises no outcome; it helps you describe the topic, the signing date and the forum so that you can explore potentially suitable lawyers through LEXNOVA Legal Connect. Every match is reviewed by a person, and advice is between you and the lawyer.

Change log. 1 October 2025 — Federal Decree-Law No. 25 of 2025 issued. 14 October 2025 — published in Official Gazette No. 809. 1 June 2026 — in force; Federal Law No. 5 of 1985 repealed. 24 September 2026 — guide first published, checked against the text on the federal legislation portal (listed active, no amendment); Book Two provisions flagged as not read directly. Later entries will record any executive regulation, amendment or Cabinet decision, and any correction to this page.