The UAE Government has recently announced the enactment of a new Civil Code, marking a significant legislative milestone. While this announcement has attracted widespread attention and commentary, any substantive legal assessment remains necessarily preliminary. Until the full text of the law is officially published and thoroughly reviewed, the extent of this analysis is limited and can only be based on the key enhancements outlined in the public government announcement.
The new Civil Code is presented as a qualitative legislative shift. This is particularly notable given that the current Civil Transactions Law, promulgated in 1985, has only been amended twice – once in 1987 and again in 2020 – highlighting the extent and depth of the current reform.
The Government announcement refers to numerous significant amendments and structural changes. At this stage, attention is best directed toward the most impactful developments likely to affect civil and commercial transactions in the UAE, including the following:
- Legislative streamlining: The Code eliminates provisions that duplicate rules already governed by recently enacted private laws, enhancing clarity and coherence across the legislative framework. Such streamlining signals a deliberate move toward a more coherent and non-fragmented private law framework. By removing duplicated provisions, the legislature reduces the risk of conflicting interpretations and uncertainty as to which statute should prevail. In practical terms, parties, practitioners, and courts will be guided more clearly to the specialized legislation governing specific matters (such as companies, commercial transactions, or insolvency), rather than relying on parallel civil law provisions. This is likely to enhance predictability in contractual enforcement, reduce litigation driven by statutory overlap, and reinforce the hierarchy and functional separation between the Civil Code and sector-specific private laws.
- Judicial reasoning and Sharia principles: The law expands the scope of judicial discretion by allowing judges, in the absence of explicit or implicit statutory provisions, to refer directly to the principles of Islamic Sharia, thereby broadening interpretive tools available to the courts. This development reinforces the Civil Code’s role as a flexible and principle-based legal framework rather than a closed set of rigid rules. By expressly expanding judicial discretion to refer to the principles of Islamic Sharia where no explicit or implicit statutory provision exists, the law equips courts with a broader normative foundation for resolving novel or complex disputes. In practical terms, this may lead to more equitable outcomes in cases involving legal gaps, evolving commercial practices, or unconventional contractual arrangements. At the same time, it places greater emphasis on judicial reasoning and consistency, as courts will be expected to articulate how Sharia principles are identified, interpreted, and applied. This evolution is likely to enrich jurisprudence while requiring intricacy to ensure predictability and legal certainty.
- Proprietary and usufructuary rights: The rules governing usufructuary construction rights have been reorganized, introducing mandatory registration with the competent authority and providing for nullity where registration is absent. This reorganization reflects a clear legislative intent to strengthen legal certainty in relation to proprietary and usufructuary construction rights. By making registration with the competent authority a constitutive requirement rather than a mere formality, the law enhances transparency and protects third parties who rely on public records when assessing rights over property. In practical terms, unregistered usufructuary construction arrangements will be deemed legally effective, exposing parties to nullity risks if registration is overlooked. This change is likely to impose stricter compliance standards on developers, investors, and contracting parties, while reducing disputes arising from informal or undocumented property arrangements and reinforcing confidence in real estate transactions.
- Legal capacity: The age of adulthood has been reduced from 21 to 18, unifying standards of full legal capacity and aligning civil law with juvenile, labour, and criminal legislation. Lowering the age of adulthood to 18 represents a significant shift toward legal harmonization across the UAE’s legislative framework. By unifying the standard for full legal capacity, the law removes inconsistencies between civil, criminal, juvenile, and labour legislation, thereby enhancing clarity as to when an individual may independently assume rights and obligations. In practical terms, individuals aged 18 and above will now be able to enter into civil and commercial contracts, manage property, and exercise legal rights without the need for guardianship or supplementary approvals. This change is likely to facilitate economic participation, reduce transactional friction, and simplify judicial assessment of capacity-related disputes.
- Pre-contractual negotiations: An advanced framework now imposes disclosure obligations of fundamental information, promoting informed contractual decision-making and reducing disputes at an early stage. Parties that enter into commercial transactions that have a re-occurring nature, are enabled to pre-define core terms. This is construed as a tactical measure to be more time and cost efficient, and limiting divergence in the future. This framework reflects a shift toward greater emphasis on good faith and transparency at the pre-contractual stage. By imposing an obligation to disclose fundamental information, the law seeks to ensure that contractual consent is informed and conscious, rather than merely formal. In practical terms, parties may now face liability for withholding material facts that could have influenced the other party’s decision to contract, even before an agreement is concluded. This is likely to raise standards of conduct during negotiations, encourage more diligent information sharing, and reduce disputes rooted in misrepresentation or unequal knowledge, while also increasing the importance of careful documentation of negotiations and disclosures.
- Company continuity and corporate stability: The Civil Code has been modernized to align with commercial legislation, distinguishing between civil and commercial companies, permitting single-person companies, regulating partner withdrawal, company continuation, and liquidation, and enhancing overall corporate stability. These reforms reflect a clear legislative objective to support business continuity and reduce structural vulnerabilities within companies. By aligning the Civil Code with commercial legislation, the law clarifies the legal regime applicable to different types of companies based on activity and legal form, thereby reducing uncertainty in corporate structuring. In practical terms, provisions permitting single-person companies, regulating partner withdrawal, and facilitating company continuation limit the risk of dissolution triggered by changes in ownership or management. Historically, courts have ordered the liquidation of companies upon a shareholder’s request to exit, particularly where continuation was deemed legally or structurally unfeasible. However, with the Commercial Companies Law expressly permitting the establishment and continuation of single-person companies, shareholder exit will no longer result in the termination of a company. Enhanced liquidation rules further contribute to orderly exit mechanisms where continuation is no longer viable. Collectively, these changes are likely to strengthen investor confidence, promote long-term corporate stability, and ensure that companies are better equipped to withstand internal disruptions without undermining their legal existence.
- Judicial assistance for individuals who lack capacity: The law provides new regulations by offering a judicial assistant to help individuals who do not possess the full capacity or ability to deliver their legal intentions as a measure to safeguard their best interest.
- Safeguarding minor’s interest: In the event a minor, had entered into a financial transaction/ agreement which poses to be advantageous to them as well as potentially harmful to them, the new law deduced that the agreement shall be deemed voidable in favour of the minor. From a statute of limitation perspective, the minor’s guardian has the right to annul the agreement within one year of knowledge of such transaction, while the minor has the right to annul the agreement within one year post reaching the legal age.
- Compensation of Blood Money: The law has enhanced its rules governing blood money in lieu of severe moral or physical injury or death. Whereby in the circumstance that the blood money was not sufficient, the law will provide additional measured compensation along with damages. This reaffirms the new law’s position of safeguarding overall public interest and justice.
- Sale of goods contracts: Further amendments have been made in respect to sale of goods contracts. By way of example, more clarity is given to the process of selling goods i.e. sample or model. In addition, safeguarding people who do not attain full capacity when it involves real estate transactions. Also, the law has refined the legal framework that governs latent defects in products. In this case, the buyers are given wider discretion if the product is defective; to reject the goods completely; keep the goods but at a lower price; or request the seller to replace the goods with defect-less goods. The statute of limitation for raising claim in that regard has increased from six months to one year after delivery, unless the guarantee period is contractually different.
- The sale of disputed rights: When there are two or more people in conflict over ownership of property, money owed, or a certain right subject to the case, the new law forbids certain officials from purchasing the disputed rights in question, i.e. Court judges, prosectors, Court clerks, and attorneys involved in the same dispute. Doing so serves to eliminate conflict of interest, injustice and bias, and maintain impartiality and justice of the judicial system in the UAE.
- Non-profit organizations: A legal framework to regulate the non-profit organizations will be put in place to ensure that all the profits generated from their activities will be re-invested back into the company’s mission, which in return will aid in promoting long-term sustainable development
A comprehensive in-depth analysis will follow once the full text of the law is published and examined. Considerable attention will also be aimed toward how courts interpret and apply these provisions in practice. At present, the date of enforcement remains unknown, pending official publication of the new Code.