Force Majeure UAE: Your Complete Guide to Contract Rights During Crisis in 2026
If your business in the UAE is dealing with disrupted supply chains, cancelled shipments, stranded employees, or suppliers who cannot deliver — you need to understand force majeure UAE law. Whether you are a landlord, tenant, employer, contractor, or service provider, force majeure provisions determine whether you can cancel a contract, suspend obligations, or claim damages when extraordinary events make performance impossible.
Force majeure UAE law is governed primarily by Article 273 of the UAE Civil Code (Federal Law No. 5 of 1985), which will be replaced by Article 236 of the new Civil Transactions Law (Federal Decree-Law No. 25 of 2025) when it takes effect on 1 June 2026. The legal principles remain largely the same under both laws. This guide explains force majeure UAE in simple terms — what it means, when it applies, how to invoke it, what happens to your contract, what your obligations are as an employer, and the mistakes that can cost you your legal protection.
What Is Force Majeure UAE?
Force majeure UAE refers to an extraordinary, unforeseen event that makes it impossible to perform a contractual obligation. The term comes from French law and literally means “superior force.” In UAE law, force majeure UAE is codified in Article 273 of the Civil Code, which provides the legal framework for when contracts can be cancelled or suspended due to events beyond the parties’ control.
The key word in force majeure UAE law is “impossible” — not difficult, not expensive, not inconvenient. The event must make performance genuinely impossible. A supplier whose shipping costs doubled because of a conflict does not have a force majeure claim. But a supplier whose goods are physically stuck at a closed port with no alternative route may have one.
Under UAE law, three conditions must all be met for the defence to apply.
The event must be unforeseeable. At the time the contract was signed, the event could not have been reasonably anticipated. Natural disasters, wars, pandemics, and sudden government orders are classic examples. Routine business risks like market fluctuations, currency changes, or seasonal demand shifts do not qualify.
The event must be unavoidable. The party claiming force majeure UAE must show that they could not have avoided the consequences of the event despite taking reasonable steps. If there was an alternative way to perform the contract — even at higher cost — force majeure may not apply.
The event must make performance impossible. This is the highest threshold. Under UAE law, mere difficulty or increased cost is not enough. Performance must be objectively impossible — not just harder or less profitable.
What Does UAE Law Say About Force Majeure?
The primary legal provisions governing force majeure UAE are found in the Civil Code. Here is what each article covers.
Article 273(1) — Total impossibility. If a force majeure event makes performance of the entire contract impossible, the corresponding obligation ceases and the contract is automatically cancelled. Neither party needs to go to court — the cancellation happens by operation of law. Both parties are returned to their pre-contractual positions.
Article 273(2) — Partial or temporary impossibility. If the force majeure event makes only part of the contract impossible, only that part is extinguished. The rest of the contract remains enforceable. For continuous contracts (like leases or service agreements), if the impossibility is temporary, the contract may be suspended rather than cancelled. The creditor has the right to cancel the contract if they notify the debtor.
Article 249 — Exceptional circumstances (hardship). This is different from force majeure UAE. If an extraordinary event makes performance excessively onerous (but not impossible), the court can adjust the contract to restore balance between the parties. Unlike force majeure UAE, Article 249 does not terminate the contract — it adjusts it.
Article 287 — Exemption from liability. A person is not liable for damages if they can prove the harm was caused by factors beyond their control — including force majeure events, natural disasters, unforeseen circumstances, the act of a third party, or the fault of the injured party.
| Legal Concept | Article | Effect on Contract | Threshold |
|---|---|---|---|
| Force Majeure (total) | Article 273(1) | Automatic cancellation | Performance impossible |
| Force Majeure (partial) | Article 273(2) | Partial extinguishment or suspension | Part of performance impossible |
| Exceptional Circumstances | Article 249 | Court adjusts obligations | Performance excessively onerous |
| Liability exemption | Article 287 | No damages payable | Harm caused by uncontrollable factors |
When Does Force Majeure UAE Apply in Practice?
Understanding force majeure UAE in theory is one thing. Knowing when it actually applies in real business situations is what matters.
Supply chain disruption. If your supplier cannot deliver goods because ports are closed, shipping lanes are blocked, or airspace is restricted, force majeure may apply — but only if there is genuinely no alternative route or method of delivery. If the goods could be shipped through a different port at higher cost, force majeure UAE likely does not apply because performance is still possible, just more expensive.
Construction delays. If a construction project is halted because workers cannot access the site, materials cannot be imported, or government orders mandate work stoppages, force majeure may apply to excuse delays. FIDIC contracts commonly used in UAE construction have their own force majeure provisions (Sub-Clause 19) which may differ from the Civil Code.
Lease and tenancy agreements. If a commercial tenant cannot operate their business due to government-ordered closures, they may seek relief under force majeure UAE. However, merely experiencing reduced revenue is not force majeure — the tenant must show that operating from the premises became impossible, not just unprofitable.
Employment contracts. Under UAE Labour Law (Federal Decree-Law No. 33 of 2021), force majeure UAE can affect employment relationships. If a business genuinely cannot operate due to a force majeure event, employers may implement temporary measures such as reduced working hours, unpaid leave (subject to MOHRE approval), or remote work. However, force majeure is not grounds for immediate termination without proper procedure.
Service agreements. If you provide services that require physical presence, travel, or access to specific locations, and a force majeure event prevents this, you may be excused from performance. But you must notify the other party promptly and provide evidence that performance is impossible.
Need Help Reviewing Your Contracts?
Velmont Crest helps businesses in Dubai review their contracts, document force majeure claims, and protect their financial position during disruptions. We work with your legal advisors to ensure your accounting records support your claim.
How to Invoke Force Majeure UAE in Your Contract
If you believe a force majeure event has affected your ability to perform a contract, follow these steps carefully. Missing any step can destroy your legal protection.
Force Majeure UAE and Employer Obligations
If you are an employer in the UAE dealing with a crisis, force majeure has specific implications for your workforce. The UAE Labour Law does not use the exact term “force majeure” but the principles apply through the Civil Code.
You must continue paying salaries. A crisis does not automatically relieve you of your obligation to pay employees. If your business is temporarily closed due to a crisis, you cannot simply stop paying wages. You must either continue paying or apply to MOHRE for temporary measures like reduced working hours or unpaid leave.
You cannot force annual leave. Under UAE law, you cannot force employees to take their annual leave to cover a force majeure closure period. Annual leave must be agreed between employer and employee.
Termination requires proper procedure. Force majeure UAE is not a shortcut to terminate employees. Even during a crisis, you must follow the Labour Law termination procedures — notice periods, end-of-service gratuity, and documentation. Wrongful termination during a force majeure event can result in compensation claims against you.
Remote work is the preferred solution. MOHRE has encouraged employers to implement remote work during disruptions. If your employees can work from home, this is the expected approach — not termination or forced leave.
Force Majeure UAE and Insurance
One of the most common misconceptions during a crisis is that insurance will cover everything. In reality, most standard business insurance policies in the UAE exclude war and related events. Understanding how force majeure interacts with your insurance is critical.
Standard policies often exclude war. Most commercial property and business interruption policies specifically exclude losses caused by war, hostilities, military action, and related events. Check your policy wording carefully — the exclusion may be buried in the fine print.
Terrorism coverage is often separate. Some policies offer terrorism coverage as an additional rider. This may or may not cover the specific events affecting your business. The definition of “terrorism” in your policy may differ from the events actually occurring.
Business interruption insurance has specific triggers. Even if your policy covers business interruption, it typically requires a specific insured event (like fire or flood) to trigger the coverage. A general economic downturn or reduced customer traffic due to a regional crisis is usually not covered.
Document everything for potential claims. Regardless of whether you think your policy covers the situation, document all losses — property damage, lost revenue, additional expenses, and disruption to operations. Take photographs, keep receipts, record dates and times, and collect witness statements. If a claim becomes viable later, you will need this evidence.
Common Mistakes with Force Majeure UAE Claims
| Mistake | Consequence | How to Avoid It |
|---|---|---|
| Assuming difficulty equals impossibility | Force majeure UAE claim rejected by court | Only claim when performance is genuinely impossible |
| Not sending written notice | Loss of contractual protection | Send written notice immediately when the event occurs |
| Not documenting the event and its impact | Cannot prove causal link — claim fails | Collect all evidence from day one |
| Not mitigating losses | Court reduces or denies relief | Explore all alternatives and document your efforts |
| Terminating employees without proper procedure | Wrongful termination claims and MOHRE complaints | Follow Labour Law procedures even during force majeure UAE |
| Assuming insurance covers war-related losses | Claim denied — business absorbs the loss | Review policy exclusions before relying on coverage |
How Velmont Crest Helps During Force Majeure UAE Events
At Velmont Crest, we provide accounting and business advisory support to companies navigating force majeure situations. While we are not a law firm, we work alongside your legal advisors to ensure your financial records, documentation, and compliance are in order.
Financial documentation. We help you document the financial impact of force majeure events — lost revenue, additional costs, disrupted cash flow, and supply chain expenses. This documentation is critical for insurance claims, legal proceedings, and FTA compliance.
VAT and corporate tax implications. Force majeure UAE events can affect your VAT filing obligations, corporate tax calculations, and FTA deadlines. We advise on whether you qualify for extensions, voluntary disclosures, or adjustments to your tax position.
Employee cost management. We help you calculate the financial impact of salary continuity, reduced hours, and workforce changes during force majeure events — ensuring your payroll and WPS compliance remain intact.
Insurance claim support. We prepare the financial evidence needed to support insurance claims — revenue loss calculations, cost analysis, and detailed financial summaries that insurers require.
Business continuity planning. We help you build financial contingency plans for future force majeure events — cash reserves, diversified supplier arrangements, and operational flexibility.
Frequently Asked Questions
Does force majeure UAE automatically cancel my contract?
Only if performance is totally impossible. Under Article 273(1), total impossibility results in automatic cancellation. If performance is only partially or temporarily impossible, the contract may be adjusted or suspended — not cancelled.
Can I claim force majeure UAE because my costs increased?
No. Increased cost is not force majeure UAE. If performance is still possible but more expensive, you may seek relief under Article 249 (exceptional circumstances), where the court can adjust obligations — but this requires a court application.
Do I need to go to court to invoke force majeure UAE?
Not necessarily. If your contract has a force majeure clause, follow that procedure. If relying on the statutory provisions, the contract is automatically cancelled by operation of law when performance is impossible. However, if the other party disputes your claim, you may need to go to court to enforce it.
What changes on 1 June 2026?
The new Civil Transactions Law (Federal Decree-Law No. 25 of 2025) replaces the Civil Code. Article 236 of the new law mirrors Article 273 — force majeure principles stay the same. The new law also strengthens hardship provisions, giving courts more power to adjust contracts.
Can Velmont Crest help me during a force majeure event?
Yes. We provide financial documentation, tax advisory, employee cost management, insurance claim support, and business continuity planning. We work alongside your legal advisors to ensure your financial position is protected. Contact us for a consultation.
Protect Your Business During Uncertainty
These events create financial, legal, and compliance challenges. Velmont Crest helps you document losses, manage tax obligations, and maintain business continuity — so you are ready for recovery.
Official References
- Charles Russell Speechlys — Force Majeure Under UAE Law During the Current Crisis
- BSA Law — Force Majeure in the UAE in Times of Regional Tensions
- Al Tamimi — UAE Judgments on Force Majeure
- Rubert & Partners — Iran War Business Impact in the UAE
- Velmont Crest — VAT Services in Dubai
- Velmont Crest — AML Compliance UAE
- Velmont Crest — How to Open a Business in Dubai