Force Majeure in the UAE: What Every Business Should Know 2026

Force Majeure in the UAE: What Every Business Should Know

Since 2020, “force majeure” has increasingly featured in business discussions concerning contractual disruption. A shipping route gets disrupted, material costs jump, or a key supplier delays — and the word gets reached for almost automatically. But under UAE law, force majeure has a precise legal meaning, and it does not apply to every disruption or commercial difficulty.

Getting this wrong is costly. Mischaracterising a commercial setback as force majeure — when it’s really a case of hardship, delay, or ordinary business risk — may  expose a company to breach of contract claims, damages, and disputes that a more accurate reading of the contract would have avoided.

This guide breaks down how force majeure actually works under UAE law, what has changed under the country’s New Civil Transactions Law, and the practical steps businesses in Dubai and across the UAE should take when disruption hits.

What Does Force Majeure Actually Mean Under UAE Law?

In simple terms, force majeure refers to an exceptional event, beyond  the control ofthe affected party, , that makes it objectively impossible to perform a contract — not just more difficult, slower, or more expensive.

For an event to qualify, it generally needs to meet three practical markers:

• The event is external and could not reasonably have been anticipated or prevented.
• The affected party is not at fault.
• Performance becomes objectively  impossible — not merely costly or inconvenient.

Increased shipping costs, longer lead times, or a less profitable deal are commercial realities, not legal grounds for force majeure — even when they’re linked to a genuine global disruption.

What’s Changing Under the New UAE Civil Transactions Law

Businesses in the UAE are now navigating a legal transition. Federal Law No. 25 of 2025 (the “New Civil Code”) came into force on 1 June 2026, and it is generally not expected to have retrospective effect.  This means the applicable law usually depends on when the contract was signed:

• Contracts signed before 1 June 2026 generally remain governed by the previous Civil Code, where force majeure was addressed under Article 273 and shaped by a substantial body of UAE court decisions.
• Contracts signed on or after 1 June 2026 will generally be governed by  the New Civil Code’s Article 236.

The core test — objective impossibility — hasn’t changed. What has changed is how the law handles partial or temporary impossibility. Under the previous regime, the legal outcome was largely automatic: total impossibility rescinded the contract by law, while partial or temporary impossibility only extinguished the affected part. The New Civil Code gives businesses more flexibility, allowing either party to actively choose between extinguishing the impossible part of the obligation, seeking amendment of the contract in cases of temporary impossibility, or applying to the court for full rescission.

In practice, this means the first question for any UAE business facing disruption is no longer just “is this force majeure?” — it’s “which law governs this contract, and when was it signed?”

The Four Conditions Every Force Majeure Claim Must Meet

UAE courts assess force majeure strictly, on a case-by-case basis. To succeed, a claiming party generally needs to establish all four of the following:

1. Unforeseeability at the time of contracting — the event must fall outside what the parties could reasonably have contemplated when the contract was signed. Standard commercial risks — market fluctuations, price increases, supply volatility — typically don’t meet this bar.
2. Unavoidability despite reasonable mitigation — the affected party must show it took reasonable steps to prevent, overcome, or reduce the impact, and still could not.
3. Objective impossibility, not mere difficulty — this can be physical (an official closure of transport routes, denial of site access) or legal (a sanction, government ban, or suspension of a required licence that makes performance unlawful).
4. Direct causation, without fault — the event must be the direct cause of non-performance, and not attributable to the invoking party’s own act or omission.

Miss any one of these four, and the claim is unlikely to hold up.

Force Majeure vs. Hardship: Why the Difference Matters

This is one of the most common points of confusion — and one of the most consequential.

Force majeure applies where performance has become objectively impossible. Depending on the circumstances, the affected obligation may be discharged or suspended entirely.

Hardship applies where performance is still possible, but an exceptional and unforeseeable event has made it excessively burdensome, threatening one party with substantial loss. Rising material costs during a regional crisis, for example, is a textbook hardship scenario — the contractor can still deliver, just at significantly higher cost.

The legal consequences differ sharply:

• Hardship does not automatically terminate a contract.
• Contractual obligations generally continue unless the parties agree otherwise or a court intervenes.
• Under the previous Civil Code, courts could reduce an excessively burdensome obligation to a reasonable level. Under the New Civil Code, courts have broader powers — they may modify obligations, suspend performance, or, in exceptional cases, rescind the contract to restore balance between the parties.

Treating a hardship situation as force majeure — and simply stopping performance — can itself constitute a breach of contract, especially where performance and mitigation options remain available.

What Usually Doesn’t Qualify as Force Majeure

Based on established UAE case law, the following are generally insufficient on their own to establish force majeure:

• Cost increases, inflation, or margin pressure
• Supply chain disruptions where alternative suppliers, routes, or arrangements remain available
• Staff shortages or operational inefficiencies
• Reduced demand, lower profitability, or adverse market conditions
• General market disruption or economic uncertainty
• Internal or commercial decisions not driven by a genuine legal or practical inability to perform

A useful test: if an alternative route, supplier, or method exists — even at higher cost or with delay — performance generally remains possible, which points to delay or hardship rather than force majeure.

What Happens Once Force Majeure Is Validly Established

What Happens When Force Majeure Applies?

Where force majeure is validly established:

• The affected obligation may be extinguished or suspended, depending on the circumstances and applicable law.
• The affected party is generally relieved from liability for non-performance caused by the force majeure event.
• Accrued payment obligations generally remain due, unless the contract or applicable law provides otherwise.

The key takeaway: establishing force majeure does not automatically mean that all contractual obligations disappear. Businesses should assess exactly which obligations are affected and what relief is available.

Where Businesses Can Get Support

Not every contractual disruption will qualify as force majeure, and the appropriate response will depend on the wording of the contract, the circumstances of the disruption and the applicable legal framework.

A seemingly straightforward delay or cost increase can raise more complex questions about contractual rights, payment obligations, notice requirements and available remedies.

Before invoking force majeure — or responding to a counterparty who has — businesses should consider obtaining a legal assessment of their specific contractual position.

At ADAM Global, our Legal Department assists businesses in reviewing contracts, assessing contractual risks and navigating issues arising from unexpected disruptions. We can help businesses understand their position and determine the appropriate way forward based on the circumstances of each case.