uae civil code

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Business Lawsof theUnited Arab Emirates-Volume III

- Translated from Arabic into English byMARJORIE JHALL BA, PhDWith an introductory essay by

.NEILcGM~NEILLMA LLB. -::::~ - ~: :'." ...,,~'-~~::S-_:'-. _ -_>;_~ ~'~-~':;'.:." .~ __~ ~ . _:::.: ._~ " .

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ADVISORY EDITORIAL BOARD

'-, EUGENE COTRAN, [{-If LLM, LLD .: :'-'. J . uf Lincoln's Inn, Barrister-at-law, formerly Lecturer in Law, School of Oriental

_. i'~':"~r& African Studies, Ur,iveXiity of London; Law Commissionerand Puisne/~, r . Judge, Kenya. . .

DOREEN HINCHCLIFFE, LLB, LLM, PhDof Gray's Inn, Barrister-at-law, Research Fellow, Centre of Arab Gulf Studies,University of Exeter, formerly Lecturer in Islamic Law, School of Oriental andAfrican Studies and Institute of Advanced Legal Studies, University ofLondon.

ANIS AL-QASEM, LLB, LLM; PhDof Lincoln's Inn, Barrister-at-law, formerly government Legal Advisor, Libya,Chairman of the Libyan Petroleum Commission and visiting Professor,Institute of Arab Studies, Cairo.

Middle East Business Law Series

Graham &1 'I'rotman Limited

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Ninth edition 1987 (three volumes)

Graham & Trotman LimitedSterling House66 Wilton RoadLondon SW1V IDE

Translation: Marjorie JHall, 1987Introduction: N G McNeill, 1981

Volume III: ISBN 0 86010 860 0

Supplement 1 (1987): ISBN 0 86010872 4Supplement 2 (1987): ISBN 0 86010873 2

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All rights reserved. No part of this publication may bereproduced, stored in a retrieval system, or transmitted inany form, or by any means, electronic, mechanicalphotocopying, recording or otherwise, without the priorpermission of the publishers. Whilst the publishers makeevery effort to ensure that the matter used in Business Laws ofthe United Arab Emirates is relevant, accurate and up-to-date, noresponsibility can be accepted by them or their distributorsfor any errors or omisions.

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THE aVIL CODETranslated from Arabic into English byJames Whelan MA (Cantab), Cert. Ed. (London)Resident Manager, Clifford Chance, Sharjah.

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FOREWORD

The Law of Civil Transactions of the State of the UnitedArab Emirates, to give this legislation its official title,or the UAE Civil Code, as it is commonly referred to, waspublished in the December 1985 issue of the UAE OfficialGazette, and came into effect on 29th March 1986. The

.-,' ..... - ",'.. , '. . .' " '.' .. {:.relevant par t of th~::!,o;!,~,~s;tirlg'';'.1:_awFLaw-';No,;",,5'::oL:!98!\ .,jr:elldsas follows:

"The attached Law shall have effect in respect of civiltransactions in the State of the United Arab Emirates."

Shudders went through the banking community when they sawArticle 714. Did this Article prohibit the charging ofinterest? After~;~th'~"~'t-~ncertainty, amending iifa\f~'Nb"'1~1>C)~+98:7r',was passed .: of whi:ch Article 1 reads:....;....... .... ~ ', '. '~~";;-:'~';'. ~

"The text of Article 1 ~f Federal Law No.5 of 1985 ...is hereby replaced by the following text:

The attached law shall apply in respect of civiltransactions in the State of the United ArabEmirates, but commercial transactions shallcontinue to be governed by the laws andregulations in force in that regard until thefederal Commercial Code is enacted,",

Although it is likely that the purpose of the amendinglegislation was to indicate' (inter alia) that interest onbank loans was not pr oh i b i t.ed ; it was no more than anindication, and new uncertainties were born. ~ There is nostatutory definition, in the Civil Code or elsewhere, ofwhat is a civil as opposed to a commercial transaction."Civil" is generally regarded as referring to private,

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personal transactions, and "commercial" to transactionsconducted in the course of business. A transaction can beboth, depending on the standpoint of the contracting party. ,~A property owning company is engaging in a commercialtransaction if it grants a residential lease to a. privateperson. That transaction. is, presumably, civil from thetenant's point of view. However, since any transaction byits nature needs at least two parties, does the Civil Codegovern the relationship?

It is submitted that the better view is that the Civil Code:does apply according to its own terms, indeed according tothe first sentence of Article I in the body of the Codeitself, to all matters save those where the provisions ofparticular laws (e.g. the UAE Maritime Code) areinconsistent with the provisions of the Code.

.~

The code is thus the basep.Lat;e of the law of the UAE;andits provisions will apply both where there is no specifici~g'is]Iti7on to the contra~'y, and where specific legislationis silent on a point in issue. Thus, a contract may begoverned by the Maritime Code or the Law of Agencies, butthe Civil Code will govern ~hether the contract was valid inthe first place, the capacity of the parties to contract,remedies for fraud, and so on ..JThe Code draws heavily on the civil codes of other Arabcountr ies, notably Egypt ,.which, since modern codif ica tionof laws began in some cases to supersede and in other casesto coexist with the Islamic Shari'ah, has been at theforefront of Arab law-making. The draftsmen of the Codewould scarcely seek to deny their indebtedness to the lawsof the sister Arab states. Quite the contrary: theincreasing sense of a pan-Aab as opposed to a purelynational cultural and historial identity renders it laudablefor any state within the Arab community to demonstrate by

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its legislation or any other public act that it swims in thesame stream and joins with its sister states in seeking

,,--' their communal goals.

The resurgence of Islam, the bedrock of the pan-Arabnational identity, is probably more than marked in the UAECivil Code than in the civil codes of any other Arabcountry. It is marked not only in the content, but in thelanguage used. This has posed particular problems for thetranslator.

It would be a bold translator who claimed to offer to hisreaders a perfect and definitive translation of legislationsuch as the UAE Civil Code, and such a claim would be notmerely bold but brazen if made by a translator who, as inthis instance, is also a lawyer practising in the UnitedArab~Emirates. The translator has held many difficult butentertaining sessions with Arab lawyers,. both .of UAE- or igin

.and from other Arab countries, practising in the UAE,attempting to extract a definitive meaning from some of themore obscure passages in the Code. In some cases it is aquestion of quot homines tot sententiae, or Allahu a'alam -God knows best.

In the ultimate test, argument before a judge, one mayexpect to see the judge applying, whether consciously or

,

not, his learning in the laws of his own background, whetherthat of the United Arab Emirates themselves, or of othercountries, principally Egypt, Sudan, Lebanon, and Syria.

For this reason a caution must be given to those who rely onthis English translation in seeking to ascertaining what thelaw is. Other translations may be different, but equallysustainable. Although the translator hopes that despite thelength and intricacy of the task there is nothing which isactually wrong, .there are many instances in which no

3.1 - iii

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: ',',right. Perhaps importantly, it has not always been~ ,t more

.: }!.'~: ~:. possible to avoid the temptation to slip into the ,.\j l -'J,I:' .~; comfortable vocabulary of English law, and the reader is, '

, , warned that it is not usually safe to apply to technical'j \

legal terms appearing in this translation the meanings with,'

which they are clothed in the common law jurisdictions.

In many cases, Arabic does not distinguish between words'which have related but distinct meanings in English law,e.g. hire/lease, company/partnership, pledge/mortgage.Rather than using the word which would have been moreappropriate in a given context, this translation does, byand large, use the same word where English law would havedifferentiated, particularly as many provisions of the Codeapply, equally to both.

In certain cases an alternative word or phrase has beenputin brackets in the body of the text eJther forclarification, or to show that there is a valid alternative.There are bracketed words in the original, and the.onlyArticles in which they have been reproduced in thetranslation are nos. 153, 243 and 570. All other bracketsrepresent interpolations by the translator.

It is now my pleasant task to acknowledge the assistancegiven to .me in preparing this work. Fuad Barahim and mycolleague at work, Essam Al Tamimi, have placed at mydisposal their knowledge and experience ,in battling withnumerous obscurities. Dr. Hassan Alloub, formerly a judgeof the Supreme Court of the Sudan, has placed me in his debt

.' I

by applying his profound lea~ning and meticulous attentionto detail to points which had defeated my own unaidedefforts. All three are in active practice as advocates ,inthe courts of the UAE. Nagib Ghafoor, a solicitor of theSupreme Court of England anq Wales, and also my colleague at

3.1 - iv

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work, has applied the invaluable combination of his Englishlegal training and complete bilingualism to probe andresolve ambiguities and tortuous constructions. This work

\_. is the better for their generosity, but any errors are minealone .

My secretary, Alice D'Souza, has with her characteristiclightning speed and personal pride in her work lightened myburden in producing a flow of accurate working copy at arate which defjes belief. Cheryl Tait, a house guestattempting to have a holiday, entered the fray without amurmur at a critical time when dragged in to perform thetedious task of checking article and paragraph numberings.

This work began before May 1987, when Coward Chance, whom Ijoined in August 1984, merged with Clifford-Turner to becomeClifford Chance, I give my thanks to my colleagues inCoward Chance as was and Clifford Chance as is for._theoi.J;,.:-_:..;.:.; _. .-" . "";;'~~'_~_,,:,-_,,-=_t._ _P-"'~!eU.~._-__~kindness Tn placing at my d i sposa l the secretariar--:'aifu:.:="t,=,,~::D:S7

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UJ\.E 2/87

Introductory ChapterGeneral Provisions

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THE CIVIL CODE

Article No.

t .'i"'. Part 1 Provisions governing the application of the

Law with regard to time and place.

1-3

4-!! .:

10-28

Part 2

Part 3

Certain jurisprudentialof interpretation

Persons

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UAE 2/87 THE CIVIL CODE

Section 4 Proof of rights(1) Categories of evidence(2) General rules of proof(3) Application of the rules

of proof

112113-122

123

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BOOK ONECHAPTER I

Personal obligations and rights

Sources of personal obligations and rights 124

Part 1 Contracts

Section 1 General Provisions 125-128

The elements.=viniditY~aoo,,;ef.fec.t~~':;;-~~,:~~=~..--:.'.CT...:3a.:m,:.~,tjl!~Ii1V.C.~I$T....:::J~c{~eJ:83e~~ij~!I':!r!!L~' -, '~5...._.--e.-.

of the contract~' and 'optIons ~.-"--_.=...:~ "~~=,"",:c"~" -'=-," '- , - .

(1) .The making st",Stt,~.:Ec:l9;;t,;;,~\=.s"=.~/,,,,,>:W,J:'~_~=,"6C::'~'----...::.-~-.-~--,~~~~,-":"-..:-----~ .-( 2) Ag ency Inecenrrac t i ng.",,"'


(7) Suspended and non-bindingcontracts

(a) The suspended contract(b) The non-binding contract

'(8) Options affecting the bindingnature of the contract(a) The option of cond i tionali ty(bl The option to inspect(c l The option to specify (one

out of two or more potential

'.",objects of the contract)

(d) The option to reject for"

,_.~ defects

213-217218

219-225226-230

231-236

237-242

'Section 3 The effects of the contract

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UAE 2/87."." .

THE CIVIL CODE

Section 2 Liabillf.Y:ffo'i'\pers'onal "'ac tSh_'t,-,

( 1 l,1!.,ilXl1!if.dc:ine::;:to';'fh'e"pe r son( 2';,Daniage~~t;;""'~'{'b'~~iti ,.'(3;: ;~~pf6p'tT~ti 6n'"~:fi(j"' tr-e'spa:~~

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299300-303 J

304-312

Section 3 Liability ,.,for theacts of .others 313...,:. ~ '...,.~'-'. " " . '." '. .'.

Section 4 Liability for animals and objects,and use of pUblic roads(1) Damage done hy animals 314( 2 ) Collapse of buildings 315

( 3 ) Th ings and equipment 316 'J( 4 ) Use of public t'oads 317

Part 4 Acts conferring an advantage

Sect.ion::=:L_="-,Acqutiiit,ion~.. i".thou t-='cause-~~;;;="" .~.-:':.-: '.'=~'; '.~~~ :-:~:;"~'::-::':~-":?::~~~'?:"?j.~,--';~~::f~~ .;~~-;:.. .. - - ~ ,._'.

. (unJust ennchment) 318-319. ...

Sectionf.2 320-324

Part 5

Section 3

Section 4

Section 5

The Law

Voluntary agency

Discharging the debt of another

General provision

325-332

333-335

336

337

Part 1

3.1-4

CH~TER IIThe effects .of a right

General Provisions 338-341

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Part 2 Means of Enforcement"

342-344

345-346347-353

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Section 1 Voluntary execution(1) Satisfaction

(a) The pa~ties to thesatisfaction

(b) The ~erson to whomsatisfaction is made

(c) Rejection of satisfaction(d) The subject matter, time,

and place of the satisfaction,expenses thereof, and proof 354-364,

(2) Quasi-sdtisfaction(a) Substituted satisfaction(b) Set-off(cl The merger of capacities

365-367368-377378-379

386-390

380-3B5

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UAE 2/87

Part 3

THE CIVIL CODE

Dispositions conditional by suspensionor deferment

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Section 1

Section 2

The condition (subsequent)

Deferment

420-428

429-433

Part 4 Multiplicity of objects of the contract

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Section 1

Section 2

The grant of an option as tothe thing to be performed

Substitution of the thingto be performed

434

435

Part 5 Multiplicity of parties to a disposition

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BOOK TWOCONTRACTS

CHAPTER IContracts conferring ownership

Part 1 Sale and barter

Section 1 Sale

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(ll( 2l

Definition and elements of saleEffects of sale(al Obligations of the seller

(i) Transfer of ownership(ii) Delivery at the

489-510

511-513

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( iii)property soldLiabili ty fordefects_

latent514-542

543-555

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UAE 2/87

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THE CIVIL CODE

I, ..Part 2

Section 3

Section 4

Gifts

Section 1

(10) Sale of foodstuffs inside andan outer casing

(11) Sale of an inheritance(12) Sales by terminally ill person(13) Sale by an agent to himself(14) Sale of property to a third

party

Barter

Forbidden Sales and barters

Elements of and conditions forthe effectiveness of gift

592-593594-596 \J597-601602-604

605-606

'607-611

612-613

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'::"c;S~~tion ~i~~ Effeets of a gift

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Section 3

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(1) In ~:1}3i~'?:~~t?:,,,:\he,donor(2) In relation to the donee

Revocation of gifts

637.,.641642-645

646-653

Part 3 Companies/partnerships

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Section 1 Companies generally(1) General provisions(2) Elements of a company(3) The management of the company

'(4) The effects of a company(5) The termination of a company(6) The iiquidation and division

of (assets of) companies

654-655656-662663-668669-672673-677

678-682

UAE 2/87

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TflE CIVIL CODE

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Part 4

Section 2

Loans'

Certain types of companies(1) Companies to perfotm work(2) Speculative venture

partnerships(3) Mudaraba companies '(where one

partner places assets at thedisposal of another to make ap r of i t )

683-690

691-692

693-709

710-721

Part 5

Part 1

Accords (settlement of disputes)

CHAPTER IIUsufructuary contracts

Hire

722-741

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Section'l Hire in general.,l'lY';';'Defir.ition of hire(2) Elements of hire(3) Effects of hire(4) Obligations of the lessor

(a) Delivery of the thinghi red

(b) Maintenance of the thinghired

(cl Liability for the tbinghired

(5) Obligations of the Lessee(a) The preserve and return

of the thing hired(0) Lending and (sub) hiring

the thing n i red(6) The termination of the hire

3.1-9

742743-760761-762

763-766

767-769

770-77 5

776-785

786-790791-796

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UAE 2/87

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THE CIVIL CODE

Section 2 ,Cectain types of hice(1) Leases of agricultural land 797-808(2) Muzara'a (share cropping contract) ~

(a ) De fin i t i on of mu za ra ' 'a 809(b) The creation of a muzara'a 810-812(c) The effects of a muzara'a

contract 813-814(d) The obligations of the

landowner 815(e) The obligations of the

share cropper 816-818(e ( f ) The terminat ion of the ,~-, muzara' a 819-821

(3) Musaqah (cohtract to performwork on another's agriculturalland in consideration of part

=,.,=~-,",~~pf the crop)(4) Mugharasa (variety of

agricultural contract: jointownership of the land and thecrop) ,

(5) Lease of a waqf (charitableendowment)

822-834

835-837

838-848

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Loans

Section 1

Section 2

Section 3

General provisions

Obligations of the bocrower

Tennination of the loan

849-860

861-866

867-871

UAE 2/87

CHAPTER IIIContracts of work

....~ ,

THE CIVIL CODE

Part 1 Muqawala (contract to make a thing orto perform a task)

Section 1 Definition and scope of muqawala 872-874

Secti9n 2 Effects of a muqawala( 1 ) Ob1iga t ions of the contractor 875-883( 2) Obligations of the empl oye r 884-889

Section 3 Subcontracting 890-:-891Section 4 The termination of a muqawala 892-896

Part 2 -'-~

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UAE 2/87.'\1.-.'

THE CIVIL CODE

Section 3 Termination of the agency 954-961"

Part 4 Contracts of bailmentI\J

Section 1

Section 2

Section 3

General provisions

The effects of the contract(1) Obligations of the bailee(2) Obligations of the bailor

Provisions relating to certaintypes of bailment

962-965

~66-985~86-991

992-996

Part 5 Custodianship (stakeholders)

Section 1 General provisions 997-1001

Section 2 Obligations and rights of the.,. stakeholders 1002.,.1010

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Section 3 Termination of the custodianship 1011

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Part 1

Part 2

Part 3

CHAPTER IVContracts of hazard (gharar)

Betting and gambling

Payments for life

Contracts of insurance

1012-1021'-.)

1022-1025

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3.1-12

Section 1

Section 2

General provisions

Effects of the contract(ll Obligations of the assured

1026-1031

1032-1033

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(2) Obligations of the insurer 1034-1036.'

Section 3 Special Provisions relating tocertain types of insurance(f) Fire Insurance(2) Life Insurance

1037-10451046-1055

CHAPTER V

Part 1

Contracts of personal guarantee

Suretyship

Section 1 Elements of suretyship 1056-1067

~...

Section 2 Certain types of suretyshipjl) Securing the attendance

of a perso,n 106~-:-.lQ;~4,;.t~,,=~;;..(2) Darak suretyship (guarantee 0'~. , ....- -"

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to give indemnity if .goods sold ..=,,~='~.."=i--- ---- ~. - ~ ~

are owned by a third party) 1075-i0iF.&'~ -~,;;"

Ass igrunen ts

Section 4 Termination of suretyship

Section 1 The creation of an assigrunent

1099-1105

1077-1092

1106-1115

.1093-1098

Effects of an assigrunent'

Effects of suretyship(1) Between the surety and the

obligee(2) Between the surety and the

principal obligor

Section 2

Section 3

Part 2

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3.1-13

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(I) Between the creditor and'the transferee 1116-1120

(2) Between the transferor and:the transferee

(3) Between the creditor andthe transferor

(4) Between the creditor andthird parties'

1121-1124

1125-1129

1130-1131

u

Section 3 Termination of the assignment 1132

BOOK THREEORIGINAL RIGHTS IN REM

CHAPTER IRights of Ownership

The ,right of ownership generally

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-1133~1135'..__-_~:..~i:-3:~~-o~~ "~'~2t?~~h

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Part 2

(6) Ownership of floors andapartments

(7) Associations of owners ofstoreys_and apartments

(8) Party walls

Means of acquisition of ownership

1188-1196

11971198-1202

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Section 1

Section 2

Acquisition of ownerless("permitted") things(l) Moveables(2) Immoveables

Guarantees

1203-12081209-1217

1218

Section 3 Inheritance and liquidation of estates(1) General prov i'sions .1219

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1242-1255

(a)(b)

(c)

General provisions 122~~lz34_.-=-r~~,c-...-~. ,__-.~- ...-:F";"cs: -...~... : 7"C"'S .Settlement of debt:,~~,-,-~"-.-~-.--." - '.. - -.,,"->~':'~-," . ..;,...:. .. .....::::.:.~..l:;:';~ =~ """~:-""="~.-

of the estate .. - 1235-1241Delivery and division ofthe assets of the estate

Section 4

Section 5

(3) Provisions relating tounliquidated estates

wills

Acquisition by accretion(1) Accretion to real property

(a) Accretion by operation

1256

1257-1261

(2 )

'of nature(b) Accretion by act ofAccretion to chattels

1262-1266persons1267-1273

1274

3.1-15

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'CHAPTER II

Possession1307-1316

1317-13241325-1326

1275-1278

1327-13281329-1330

1279-12971298-13011302-1306

Acquisition of fruitsby possessionRecovery of expenses(d)

(e)

( b)(c)

Contract

(1) General provisions(2) Effects of possess ion

(a) Passage of time inprescriptionPossession of moveables

Pre-emption(1) General provisions(2) Procedures for pre-emption(3) Procedures for pre-emption

Section 7

Section 6

Section 8

,

".'

Part 1 Rights of enjoyment, use, residence, use ofthe land of another (musataha) and physicaloccupation

Section 1 Rights of enjoyment(ll General provisions(2) Effects of a rignt of

enjoyment(3) Termination of the right

of enjoyment

1333-1335

1336-1343

1344-1348

'.~

Section 2 Rights of use of residence 1349-1352

3.1-16

,'-,

UAE 2/87......, .

THE CIVIL CODE

'- "

'I .:,

Part 3

Section 3 Rights of musataha(user of the land of another)

Waqfs (charitable trusts)

Rights of easement

1353-1360

1361

Certain types of easement(1) Rights of way 1379-1381(2) Right to draw water 1382-1387(3) Rights of passage of water 1388-1391(4) .:rh~ X ight,t9. fp"..L.lp.'i..,_..~~;".~J~92-1398

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el.

Section 1

Section 2

Section 3

Section 4

Creation of rights of easement

Scope of rights of easement

Termination of rights of easement

1362-1366

1367-1372

1373-1378

" '"

BOOK FOUR~ ::__v ;.'_ ~--.,':~:";:--.;~,r,:~i'''''~:''-_-:--C-:O:->'-::-6':"~-"'~---:" - .SECURITI'ES-OVER~R'l'Y-" ,-_ ...,- " ',,' .

">-,:~;;;L - ,. -. 0 _ '..:.,"'g'~"~_"._ '.:". ,,~7:;_,::;;-~"j,c.~-.:..:;;:...;.:,;,;..;;,,-t';_..~~ ~::'~.',", ~.CHAPTER'I ' , "

Pledge (or mortgage) by way of security

Part 1

Part 2

Definition and creation of a pledgeby way of security

Effects of a pledge by way of security

1399-1411

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Section 1 Effect of the pledge as betweenthe contracting parties(1) ~n relation to the pledgor(2) I~ relation to the obligee-

pledgee

1412-1417

1418-1421

3.1-17

Section 2 Effects of a pledge by wayof security in relation tothe non-contracting parties

(1) General provisions(2) Order of priorities(3) Rights of following

Expiry of pledges by way of security

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Part 3

THE CIVIL CODE..rIo -

1422-14241425-14281429-14391440-1447

CHAPTER IIPossessory pledges (mortgages)

Part 1 Definition and creation of possessory pledges 1448-1466. ,-----.

Part 2 Effects of a possessory pledge

1472-1480

.1467-1471

Effects of the pledge as betweenthe contracting parties

.' ~cC-.:.c(JL "\'U-!;h~_r~eg

-----------_..---------------------------

."."

Par t '1

Part 2

UAE 2/S7

CHAPTER I IIPriority rights (liens)

General provisions

Types of priority rights

THE CIVIL CODE

1504-1510

Section 1 General provisions ,1511

Section 2 General priority rights andparticular priority rights overmoveable property 1512-1525

Section 3 Priority rights over real property 1526-1528

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INTRODUCTORY' CHAPTERGENERAL PROVISIONS

'. -

PART 1P~ovisions relating to the application and

effect of the law in time and place

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Section 1The Law and its application

Article 1.- The legislative provisions shall apply toall matters dealt with by those provlslons in the letter andin spirit. There shall be no innovative reasoning(ijitihadJ in the case of provisions of definitive import.If the judge finds no provision in this Law, he has to passjudgment according to the Islamic Shari'ah. Provided that

' .. '_he;:musT"ha~~rgard to. the choice of the mR.\.t?il~f1r~opriates6"r"utiori-f~_;;i"nth~~sChc66_lsof Imam Malik and Imam Ahmad binf1anbal, .,and.::.:if none is found there, then from the schools'of

~~~;-'ai''':~li~;'-iand'Imam Abu f1anit~':~~~ ';;;'i~bef its.

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If the judge does not find the solution there, then he mustrender judgment in accordance with custom, but p~ovided thatthe custom is not in conflict with public o~der or morals,and if a custom is particular to a given emirate, then hisjudgment will apply to that emirate.

Article 2.- The rules and principles of Islamicjurisprudence (fiqhl shall be relied upon in theunderstanding, construction and interpretation of theseprovisions.

Article 3.- Public orde~ shall be deemed to includematters relating to personal status such as marriage,inheritance, and lineage, and matters relating to

3.1-21


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sovereignty, freedom of trade, the circulation of wealth,rules of private ownership and the other rules and

found~tions upon which society is based, in such a manneras not to conflict with the definitive provisions andfundamental principles of the Islamic Shari'ah.

Section 2The application of the Law with regard to time

, ,

"

Article 4.- (1) It shall not be permissible to repeal alegislative provision or to suspend the operation of it saveby a subsequent legislative provision expressly so enactingor which includes a provision inconsistent with the earlierlegislative provision or which rearranges the subject matterthe rules for which are already laid down in such

._.;,.< ....~>~., legislation'S~~~~7=~~-c!:~:-~-.~~ ~=-~-:-.::.;.~ ~__~(2) .If a legislative provision repeals an ee r.Li e r .: '~;:-:::,~,':.::~::::' iegis'F~ive ,p.rPYJsion and the""liUff'""Ie'gisla t ive provision is

itself repealed, such repeal shall n9t result in the earlierprovision coming into force again unless it is expressly solaid down.

Article 5.- (1) Provisions relating to competence(legal capacity) shall apply to all persons to whom theconditions laid down in such provisions apply.

(2) If a person is competent under old provisions and heloses that competence under new provisions, such loss shallnot affect his earlier dispositions.

Article 6.- (1) The new provisions relating tolimitation of time for claims shall apply as from the timethey come into force to every period of limitation which has

3.1-22

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not expired.


\... (2) Provided that the old provisions shall apply toquestions relating to the commencement of the running oftime, and the suspension and interruption thereof, inrelation to the period prior to the new provisions cominginto force.

, :., .j -- ...'J "j'-'::. ~.. ; Article 7.- (1) .If the new provIsIon lays down a

. limitation period shorter than that laid down in the oldprovision, the new ,period shall apply from the time the newprovision comes into effect notwithstanding that the oldperiod has already commenced.

(2) If, however, the remainder of the period provided forunder the old provision is shorter than the period provided~~=~y-",,- ., "c" for "under the new prov i s.konc--the..per iod of limi tation shall

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THE CIVIL CODE

(2) The provisions of the foregoing paragraph shall notapply to bbligations arising out of an unlawful act inconnection with events taking place' abroad which are lawfulin the State of the United Arab Emirates notwithstandingthat they are considered to be unlawful in the country inwhich they took place.

.'

procedures are carried out.

procedural matters, shallstate in which the actionre

Article 21.- The rules relating to jurisdiction, and allbe governed by the law of theis brought or in which the

Article 22.- The provisions of the foregoing Articlesshall not apply in cases where there is a contrary provision.in a special law or in an international convention in forcein the State.

,e'._---

.1

Article 24.- .The law of the State of the United ArabEmirates shall apply in the case of persons of unknownnationality, or persons who are shown to have more than onenationality at the same time. Provided that in the case ofpersons shown to have at the same time the nationality ofthe United Arab Emirates and of another State, United ArabEmirates law must be applied.

Article 25.- If it app~ars from the provisions containedin the foregoing Articles ~hat the law to be applied is thelaw of a particular state which has more than one legalsystem, the domestic law of that state shall determine

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UAE 2/87~ , :

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... _~ .

THE CIVIL CODE

which legal system is to be applied. In the absence of aspecific provision, the prevailing system of law, or the lawof the place of residence, as the case may be, shall apply.

Article 26. - (1) If it is established that a foreign lawis to be applied, only the domestic provisions thereof shallbe applied, to the exclusion of those provisions relating toprivate international law.

(2) Provided that the law of the United Arab Emirates shallapply if international law relating to applicable lawprovides that United Arab Emirates law shall apply .

Article 27.- It shall not be permissible to apply theprovisions of a law specified by the preceding Articles ifsuch provisions 'are contrary to Islamic Shari'a, publicorder, or morals in the State of the United Arab Emirates.

~'=["-"-~.","'-~.

Part 2Certain jurisprudential maxims and rules of interpretation

Article 29.- Ignorance of the law is no excuse.

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Article 30.- ,Exceptions may not be used by analogy, normay their enterpretations be extended.

Article 31.- A mandatory provision (of law) shall takeprecedence over a contract~al stipulation.

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UAE 2/87 : THE CIVIL CODE

Article 32.- That without which an obligation cannot beperformed is itself an obligation.

Article 33. - A rule shall depend on its cause for itsexistence, and shall cease "to be if the cause ceases toexist.

,"

Article 34.- Fungibles shall not cease to exist.

I '

[Translator's note: The principle is that where goods aredefined by type, quality, etc., as opposed to specificallyascertained items or parcels of goods, then the loss ordestruction of any specifically ascertained goods shall notaffect a contract made e.g. for the sale of replaceablegoods of that description. See Article 99 for a definitionof fungibles.)

Article 35.-

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Article 41.- No analogies may be drawn from what is shownto be contrary to analogy (i.e. outside the normal course ofevents) .

Article 42.-return.

(1) No harm shall be done; nor harm done in

(2) Harm shall be made good.

(3) Harm may not be made good by causing similar harm (inreturn) .

I Article 43.-act. Necessity excuses the doing of a prohibited,~. i .'J.

Article 44.-doing of good.

The averting of evil is better than the ~ ">.0' .... _

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Article 45.-'of others.

Compelling need shaH~not';aAnu.r~the~rigtits ."...~,.... -- ,~-~ :.~ . . .',.. . . .

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Article 49.- Greater (evidential) weight shall be givento the prevailing and the commonplace than to the rare (andexceptional) .

Article 50.- That which is established by custom isequivalent toa stipulated condition.

Article 51.- An obligation under custom has the sameforce as an expressly stipulated condition.

Article 52.- Where, prohibition conflicts with an:bbligation, the prohibition shall take precedence.

principal subject matter) andspecified.

"Article 53.- That which is ancillary attaches (to

need not be separatelythe

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Article 54.-incidental to

If a matter ceases to exist, that which isi t shaiI;;a:lj5~~~~~:sj~::~.:~;~:;''--- -:"

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Article 60.- No regard shall be had to merepossibilities. "

"oArticle 61.- No regard shall be had to an (act performedin consequence of a) belief which is shown to be wrong.

Article 62.- If a matter is established by (proper lawfulmeans of ) proof, (the effect is tantamount to the judgebeing) as an eye-witness.

A person shall be bound by his admissions.

Article 63.-

Article 64.-the principal

A subsidiary mattermatter being proved.

may be proved without, ",)'-.:./' '

Article 65.- A matter which is (merely) outwardlyapparent suffices as ,~_ d

,-,


Part 3Persons

Section 1Natural Persons

Article 71.- (1) The personalitY,,(status of person) of ahuman being shall commence 'at,the moment of being bornalive. ; It sha~l terminate upon his death.

{;- (2) The law shall lay down the rights of a foetus in utero.

- ~.=:=-..-.~

facts of birth and death shall beentries in registers kept for that

(1) Theproved) by

( 2)

Article 72.-recorded (or:purpose.

If there is no such evidence or if it should appearthat the entries in the register are incorr~ct, it shall be _

:.:-- -:- ,.~._:--:- - -~.~-- _...:......:.:.c:..--.;'~.2;;.?..i...:?::;..~.::.:.,.;~-;:;.:.::. "--'--'"permissible to prove the same by.any legaL.means 'orcp'r:bo-f~ ~ .. 2"';::.

Article 73.- Provisions relating to fo~ndling5:~~~1~~6e~~-~~:~~=- - _. =.;;- --- ---~;:;;';::o-.-;- -~""":::'::-_-_~ '''::'_~

laid down in a special law.

Article 74.- The provisions relating to lost and missingpersons shall be'laid down in a special law.

Article 75.- (1) The nationality of the State of theUnited Arab Emirates shall be regulated by law.

(2) By the word "national", wherever it appear~ in theCivil Code, shall be meant any person having the nationalityof the United Arab Emira~es. By the word "alien" shall bemeant any person who does not have the nationality of ,theUnited Arab Emirates.

Article 76.- (1) The family of a person shall consist ofhis spouse and relatives.

3.1-33 ,


(2) All persons coming from a common stock shall be deemedto be relatives. .'

'Article 77.-(1)relationship of root

A direct relationship is theand branch (direct lineage).

I-...J .

",' (2) An indirect relationship is the link between persons ofa common stock without direct lineage, whether or not withinthe degree of consanguinity precluding marriage.

,

Article 78.- In calculating the degree of directrelationship each upwards stage of generation to the sourceshall be regarded as one degree away from that source. Incalculating the degree of indirect relationship degreesof ascent from the descendants to the common origin shall bebe taken into account, and then downwards from him to thelast generation, and ~ach stage shall be counted as a degree

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(3) If a person does not have a place in which he normallyresides, he shall be deemed to be without a residence.

Article 82.~ The place in which a person carries on atrade, profession or occupation shall be deemed to be aresidence in connection with the administration of thebusiness relating to such trade, profession or occupation.

Article 83.- (1) The residence of a person of defectivecapacity or a person under a restriction, and missing orabsent persons, shall be the residence of the personrepresenting such persons at law.

(2) A person of defective capacity who is authorised totrade shall' have a special residence in relation to the workand dealings which the law regards him as having capacity to

'~':;F~t",~~~:~-~.~~.=:::~':~i;~:~,~:,:;;tj;~~..c~~;_ ,~~~-"~=~,-., u'A'rti.cl~'84'-("(lk~i~.shall be permis~ible to adopt an

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Article 85.- (1) Every person who has reached the age of. ,

majority in possession of his mental powers and who has notbeen placed under a rest~iction shall be of full capacity toexercise. his rights laid down in this law and the lawsderiving from it.

(2) A person shall be of the age of majority upon reaching lthe age of twenty one lunar years.

Article 86.- (1) No person who lacks discretion byreason of youth, imbecility or insanity shall be competentto exercise his civil rights.

(2) Persons under the age of seven years shall be deemednot to have reached the age of discretion.

, ).........

:;l\:rticle:..87,.c:-.,:--An.y.;p.gIc?on .i"ho has reached the age of-. -c,- ~di'sc:retibn hut~~:sc;;not""r-eached't he ageuof majori't;'a~d-'~~y.~.~~~~JiLs2e~_!i,hO:"",1}?3.4;~8,~:~d-,~heage of majoritY.}>~S.1:'.c~.n idiot~-~~-~o.f~uris0und,,;mi"ng::~\1~.,j)eo f defecti ve capacfty under'. the

law.

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Article 88.- Persons of no capacity or of defectivecapacity as the case may' be shall, with ,regard toguardianship, tutelage and custodianship, be subject to therelevant conditions in accordance with the rules laid downby law.

Article 89.- No person may divest himself of his personalliberty or of his capacity,. or vary the concomitantsthereof.

Article 90.- Any person who'suffers an unlawfulinfringement of any of the rights appurtenant to him as aperson shall have the right to require that such

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UAE2/87 THE C,IVIL CODE

infringement cease, together with compensation for anyd~mage suffered by him.

\.Article 91;- Any person whose use of .his name or sur0ameor both is disputed by another without justification or.whose name or surname or both are wrongfully assumed byanother shall have the right to require that suchinfringement do cease and to claim compensation for any harmsuffered.

, Section 2

Juridical ~ersons

Article 92.- Juridical persons shall consist of the

,,~

law.property having aprovisions of the

,:., .

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-----

f oLl.ow i nq ; -.(a) the State, the (individual Emirates, the

._, ---''::';'''~:;:;:~~:;;.::!Municipalities and other a~mi').~!?,~~_ati~e un i-ts , under..:.:.-;------'='==~S:;===.="=the__conditions-laid; down for them by law;

._ (b) public departments, authorities' and bodieS and ... ~~--r.:;;:C:--:=-=';-:;:'~..;-:::-;-:::::~~ . _-=--..: -"_~~ ~"~~=-:" ~

~=~~=..:;;.~, __~~p).Jb.lic~ insti tutions and es t ab Li shment s upon which a~'-~-~ :-.: _ ...--~:="~-''''::''''':''':"--

judicial personality is conferred by law;(c) Islamic bodies recognised by the State as having ajuridical personality;

.' .

(d) waqfs;(e) civil and trading companies, save as exclude~.:by aspecial provision;,(f) private societie~ and establishments establishedin accordance with the ~aw; and(9) any grouping of persons orjuridical personalit ~nder,the

A juridical person shall enjoy all.pertaining (exclusively) to the ca~acity.person, within the limits laid down by ,

Article 93.- (1)rights, save thoseof being a naturallaw.

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(2 ) Such persons shall have:-(a) separate financial liability;(b) legal capacity within the limits laid down by thedocument es t.eb Li sh Inq ut , or ~as laId down by law;

-'(c) the right to bring proceedings; and(d) a separate place of residence. The place ofresidence of a juridical p~rson shall be deemed to bethe place in which it has its administrative centre, andso far as concerns juridical persons whose head officeis abroad but which carryon an activity in the State,their administrative centre, with regard to the law ofthe State, shall be deemed to be the place at which the.local administration is situated.

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(3) Such persons must have a (natural) person to expresstheir intentions.

Artidec9 4 ; - Jur Ldi ca L. persons shall be sub-ject to thespecial laws pertainin~ to them;

Part 4Things and property

Article 95.- Property ("mal") is any thing or righthaving a material value in dealing.

[Tr: The word translated as "thing" is "'ain". The wordincludes both land and chattels, and all that is broadlyindentifiable as a "thing", and embodies in the widest senseall that would be regarded as property (excluding choses inaction or rights) undecEnglish law. In this' translation,the word "property" is used to translate "mal", wherever thelatter word occurs in the text.!

3.1-38

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Article 96.- Property may be "mutaqawwim" or "non-mutaqawwim". Mutaqawwim property is that which it ispermissible for a Muslim lawfully to enjoy, and non-mutaqawwim property is that which it is not ,permissible fora Muslim lawfully to enjoy.

Article 97.- Any thing which can be possessed whetherphysically or constructively, or which may be lawfullyenjoyed, and which does not by its nature or by operation oflaw fall outside the scope of dealing (transactions), shallbe a proper subject of property rights.

Article 98.- Things which are by their natur~ outside thescope of dealing are those which no person may possessexclusively, and things which are outside the scope ofdealing by ~peration of law are those which the law does notpermit to be the subject of property rights.

Article 99.- (1) Fungible things are those whose unitsor parts are of 'a r ep Lace.abLe nature" or nearly -so,- in such

,.,0,"'=':-; ,. a way tha t by custom other. things can take their placewithout any appreciable 'distinction, and which arecalculated in dealing by num~er, measurement, capacity orweight.

(2) Non-fungibles are those things whose individualinstances differ appreciably as to description or value, orwhich are unique in circulation.

Article 100.- (1), Consumable things are-those the natureof which cannot be enjoyed save by consuming or spendingthem.

(2) Usable things (durables) are those which can only beenjoyed by repeated use, they retaining their specificidentity.

"'--~'

3.1-39

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THE CIVIL CODEUAE 2/87

Article 101.-which cannot be

.\1.,. '

Any thing of a permenently fixed nature andremoved without damaging or altering its

surroundings shall be regarded as real property. Everything'else shall be regarded as movable property.

Article 102.- Real property by allocation (i.e. intendedto serve as part of the real property) is movable propertyplaced by an owner in real property of his, ~ith the intentof its being used or exploited, even though not(permanently) fixed to the real property.

Article 103.- (1) All real property or movables owned bythe State or public juridical persons, allocated in fact orin law for the public benefit, shall be deemed to be publicproperty.

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of ormay such property be disposedor pass into (private) ownership

( 2)distrained (attached)efflux ion of time.

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Part 5Rights

~-'-""-~~:;'"-~!.~'~..~~

Section 1'The scope and exercise of rights

Article 104.- The doing of what is permitted by lawnegates liability, and no person who lawfully exercises hisrights shall be liable for any harm arising thereout.

Article 105.- (11 It is proper that a private harm beborne to avert a public harm .

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(2) 'It is proper that a greater harm be removed by(inflicting) a lesser harm.

Section 2'The abuse of rights

Article 106.- (1)unlawful exercise of

A person shallhis rights.

be held liable for an

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(2) The exercise of a right shall be unlawful:(a) if there is an intentional infringement (of

another's rights);(b) if the interests which such exercise of right is

designed to bring about are contrary to the rules of theIslamic Shaii'ah, the law, public order, or morals;(c) if, the interests desired are disproportionate to

... ," . --::::-'" ~:- -",:;,-' ..'-''''~the harm that will be suffered by others; or e,",c,c.'''''~:;''''"~~.

=(d) if it exceeds the bounds of usage and custom.. -; '~_,c, ,. "" ..c~~.~.;.(_,..,..~~''';''b'.-C~~

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Section 3Types of rights

Article 107.- A right may be personal; property or moral(choses in action) .

Article 108.- A personal right is a legal relationshipbetween an obligee and an obligor whereby the obligee has aclaim against his obligor for the transfer of a propertyright, or to perform or r&frain from performing an act.

; .

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Article 109.- (1)a particular thing,

A property right is a direct power overgiven by law to a particular person.

3.1-41

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(2) A property right may be original or consequential.

Article 110.- (1)ownership, disposal,occupation, rights oflaw provides shall be

Original property rights are rights ofusufruct, use, residence or sharedeasement, waqfs, and rights which thedeemed to be such.

.-

(2) Consequential property rights are mortgages forsecurity, possessory mortgages, and liens.

Article 111.- (i) Moral rights are those which subsistover a non-material thing.

(2) Rights of authors, inventors, artists, and rights in'trade marks and other moral rights, shall be governed by theprovisions of special laws .

..~, .'. ;'

(l)

following forms;-(a) writing;(b) testimony;(c) circumstancial evidence;(d) eye-witness and expert evidence;(e) admissions; and(f) evidence on oath.

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Article 112.": Evidence to prove a right shall take the

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(2) General rules of proof

Article 113.- The burden lies on an obligee to prove hisright, and on an obligor to refute it .

~ .1-42

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Article 114.- Writing, testimony, and conclusivecircumstancial evidence, as well as eye-witness and expertevidence, shall be valid as against other parties, but anadmission shall be valid against the maker thereof alone.

Article 115.- Any testimony by which. an advantage isgained by o~ a detriment averted from the witness shall berejected.

Article 116.- The testimony of a deaf person, and hisoath, shall be admitted by his accustomed signs, if he 'isunable to write.

and the oath (of denial) must

( ,

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~, ...; Article 117.- The burden of proof isbe taken

upon him who asserts,by him who denies.

I, '

Article 118.- (Independent) evidence must be produced toestablish what is contrary to the apparent facts, and the

:::h,~::~ b. "'.0 '" :h"" 'h" '~:':~~~~"Article 119.- The oath shall be acCept'&a~.o~at~b -;cq ' :~2i!'_takes it to discharge himself, but not to bind another.

: ,, , Article 120.-

application of(1) The oath shall only be taken on the

the opposing party.

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(2) It shall be permissible for the judge, of his ownmotion"to direct that a party take the oath in thefollowing ci~cumstances:

(a) if he claims a right in an inheritance andestablishes the same~ he shall take the oath of istithaqto show that he has not received what is due to him fromthe deceased, and that .he has not discharged him, thathe has not assigned his rights to another, and that

3.1-43

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there is no pledge in existence as against such right;(b) in the event of proof of his entitlement to

property, he shall take the oath to show that he has notsold such property or that he has not given it as agift, or that it has not left his possession by anyother means;lc) in the event that a sale is rescinded for a defect,

he must swear that he did not consent to the defecteither by word or deed; or(d) in the event of a judgment for a right of

preemption, he must take the oath to show that his rightof preemption has not lapsed for any reason.

Article 121.- The evidence of a translator registered inthe special register shall be accepted, as laid down by law.

(3) Application of the rules of proof

Article 123.- In the rules and procedures for proof andthe adducing of evidence of a right, the Courts shall applythe provisions laid down in special laws, to the extent thatthe same do not conflict with the foregoing provisions.

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~soucces of obligations shall ee as follows:-

Y!,;..J1. "contracts; """"'b-o'"2. \4unilateral a-eh>t

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3. v\..Jacts causing harm (torts);~

4. \~acts conferring a benefit; and5. the law.

Part IContracts

Section IGeneral provisions

THE CIVIL CODE

The following may be .the subject matter of a

Article 125.- A contract is the coming together of anoffer made by one of the contracting parties with theacceptance of the other , together~with. the_~agreement of them

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_an ob l i qa t i on upon eadh~-ttf~;.~tr~;~k-mit-;;~;i.-~h- -: .-_ .. ~:~;;~i..~[!{::__;-~_~~~~Ui3.-..,....~~~5'H..~~~~~ . ,

each is bound to do for -fheother; 0 .... -

There may be a coincidence of more than two wills over thecreation of the legal effect .

Article 126.-contract:

(a) property, whether moveable or immoveable, orcorporeal or incorporeal;(b) ~enefits derived from property;(c) a particular act or service; and(d) any other thing which is not prohibited by aprovision of the law and is not contrary to public orderor morals.

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Article 127.-unlawful.

Article 128.-this Part, shall

A contract to do an unlawful thing is

(1) The general provisions contained inapply to nominate and innominate contracts.

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(2) With regard to rules applying to certain contractsonly, the special provisions governing the same shall belaid down in this Law or in other laws.

Section 2The elements, validity and effect

of the contract, and options

(1) The making of the contract

Article ,12:9;c~-::.,,%:Th:!~eessili~e:+.e!Jlentsfor the making of a '. ~~: :_ - .~~.:3;:;,~.~~';'''''::",]~';\:7Z;:.:S-~...~~:.:_~~-&.;..;~~'.~~.contract~ca're:-~~~'7, '_",::=-oC-',;;~:;,~_c~.~'-=. . ...

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Article 132.- An expression of inte~t may be made orallyor in writing, and may be expressed in the past or presenttense or in the imperative if the present time.is intendedor by such means as are customary even by a person who isnot dumb, or by an interchange of acts demonstrating themutual consent or by adopting any other course in respect ofwhich the circumstances leave no doubt that they demonstratemutual consent.

Article 133.-' The form of acceptance having the purport ofa bare promise will give rise to a contract by way ofbinding promise if such is the intention of both parties.

Article 134.- (1) An offer of goods or servicesaccompanied' by an indication of the consideration shall beregarded as an offer .

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..,', ( 2 )~'!li,;'publiciTt".ton-:C{o-r:~-;:frveftisem",nt .or a cur rent pr ice 1istor 'any:-ot her-:::sti~_e!11en'~lJne:.te~'wTth\offers0 r order sdir:;dtidYYt?J~~~~~A~m~t::~cjr i nd i vidua ls sha 11 'n"'il'!?i""'the

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Article 135.- (1) A person who remains silent shall notbe deemed to have made a statement, but silence in the faceof a circumstance in which a statement is called for shallbe regarded as an acceptance.

(2) In particular, silence shall be deemed to be anacceptance if there has been a prior dealing between thecontracting parties and" the offer is related to such dealingor if the offer will bring about a benefit to the person towhom it is made.

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Article 136.- The contracting parties shall retain theoption (to rescind) from the time the offer has been madeuntil the time the majlis ends, and the offer shall beavoided if the offeror retracts it after making it and priorto its being accepted by the other sideor if either of:~hecontracting parties says or does anything to demonstratethat he is resiling from it, and no acceptance made afterthat shail be of any effect.

[Tr: Thissection embodies the Shari'a concept of "khiyaral-majlis" - literally "the option of the session". Thismeans that while the two parties are still in session, i.e .they have not gone their separate ways, and are stilleffectively together, each party retains the right to revokeany agreement made between them from the moment they cametogether I .

. -. ~..=.~.~.::;-- -,.. ,,--- . - - . -- ~'--~ "=~i~';;...~~:,:; .~5~~'lc{e~J;~.'..'':''~'> If the parties concern the'ms'e1.ves during the. ..-~~--~-.-. '''';'m~j lis:.0.f.~the,..r;:on[;;;ct: wi tho-extraneous rna t ters, that shall-':.:..~~:~~;~:i~':~,:)~~a~~~~:reje':tionof. thee mat~~and.

Article 138.- A repetition of the offer prior toacceptance annuls the first offer, and the' last made offershall be regarded as the valid one .

Article 139.- (1) If a time is fixed for the acceptanceto be given, the offeror shall be bound to keep to his offeruntil such time expires.

(2) The time may be inferred from the circumstances of thecase or from the npture of the transaction.

Article 140.-offer.:~~"::.~..

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(1) .The acceptance must coincide with the

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(2) If the acceptance exceeds the subject matter of the Itoffer or places a restriction on it or varies it, that shalf ~.'l

i~'1!be regarded as a rejection containing a new offer. :J,~I~~,'

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Article 141.- (1) A contract may only be made upon the'agreement of the two parties to the essential elements ofthe obligation, and the other lawful conditions which the

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parties regard as essential ..

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'-.....(2) If the parties agree on the essential elements of theobligatio~ and the remainder of the other lawful conditionswhich both parties regard as essential and they leave'matters of detail to be agreed upon afterwards but they donot stipulate that the contract shall not be regarded asmade in the event of absence of agreement upon such matter~~t.he,..-contract shall be deemed to have been made, and . if a-,"'-""-- .

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(2) If the two parties agree that the earnest money shallbe forfeited in the event of reneguing, each of them shallhave the right to renegue, and if the person who has paidthe money renegues he shall lose it, and if the personreceiving it renegues, he shall pay over double that amount.

(2) Agency in contracting

Article 149.- A contract may be made by a principal and itmay also be made by an agent unless the law stipulatesotherwise.

Article 150.- (1). The agency in the contract may be by

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(2) Nevertheless, if the deputy is an agent acting inaccordance with specific instructions given to him by hisprincipal, the principal may not rely on the ignorance ofthe agent of circumtances of which the principal knew orwhich he is presumed to have known .

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Article 153.- If the agent makes a contract within thelimits of his authority in the name of the principal, theprovisions of that contract and the rights (obligations)arising therefrom shall devolve upon the principal.

Article 154.- If the party making a contract does notstate at the time the contract is made that h~ iscontracting in his capacity as agent, the effect of thecontract will not attach to the principal either as obligeeeor- obligor 'unless it is conclusively presumed that the,person with whom the agent contracted knew that he was,:,'anagent or if it was a matter of indifference for him whetherhe was contracting with the principal or the agent.

Article 155.- If the agent and the person contracting withhim are both ignorant at the time the contract is made ofthe agency having been terminated, the effect of the

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contract made by the ag.ent wHlattach to the pr i nc i.pe I orhis successor's.

Article 156.- It shall not be permissible for a person tocontract with himself in the name of the person for whom heis an agent whether the contract is for his own account orfor the account of another party without authorisation fromthe principal, but provided that it is permissible for theprincipal in that event to approve the contract, havingregard in all of the above to any contrary provisions of thelaw or commercial practice.

(3) The capacity to contract

Article 157.- Every ~erson shall have capacity to contractunless that capacity is taken from him or restricted byoperation of law .

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Article 158.- A minor who is not of the age of discretionshall not have the right to deal in his property, and allhis dealings shall be void.

Article 159.- (1) Financial dealings of a minor of theage of discretion shall be valid if they are purely for hisown benefit, and void if they are purely to his detriment.

(2) Dealings falling between pure benefit and puredetriment shall depend upon the consent of the guardianwithin the limits within which it is permissible for him tomake dispositions either immediately or by ratification bythe minor after his attaining the age of adulthood.

(3) The age of discretion shall be 7 complete Hijra years.

Article 160.- (1) A guardian may permit a minor who hasreached the age of 18 Hijra years to receive all or part ofhis property to administer it. -,

.-(2) It shall be permissible for the court upon hearing theevidence of the guardian to permit a minor who has attainedthe age of 18 Hijra years to receive all or some of hisproperty to administer' it.

(3) The provisions relating to the above shall be laid downby law.

Article 161.- A minor who is authorised to make dealings-'

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within the terms of the authorisation shall have the samestatus as an adult. "

Article 162.- It shall not be permissible for a minorwhether under guardianship or tutelage to trade unless hehas attained the age of 18 Hijra years, 'and the court hasgiven him absolute or limited authority so to do.

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Article 163.- (1)minor of the age of

A judge may grant authorisation to adiscretion where his guardian has

withheld authorisation, and the guardian may impose norestriction upon the minor thereafter.

(2) The judge may, after giving authorisation, reimpose the.restriction upon the minor.

Article 164.- The guardian of the property of a minorshall be first his father then the executor of his fatherthen the t{ue grandfather then the judge or the guardianappointed by the judge .

Article 165.- The law shall determine the necessarycapacity which the guardian must have in order to exercisehis rights of guardianship over property.

Article 166.- Contracts of administration issued by a~d;;~~U~r-__~._:~~>

guardian over the property of a minor shall. be valid and ~-~::._.;""'O~",,,.--:::-'::.;:;;~m:~~

effective in accordence with the cond i t i cns and provisions" ~"U;.~laid down by law. .c.'."~"-~.-~~-:""::"'":""'_'_~.;!;..~..

Article 167.- Dispositions made by the guardian in respectof the property of a minor not falling within acts ofadministration shall be valid and effective in accordancewith the provisions and conditions laid down by law.

Article 168.-shall be ipso

(1) Minors, insane personsfacto under a restriction.

and imbeciles

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(2) With regard to idiots and persons under a mentaldisability, the judge"shall impose restrictions upon themand lift such restrictions in accordance with the rules andprocedures laid down by 'law .

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Article 171.-

(2) With regard to dispositions made prior torestriction, they shall not be void or voidableresult from exploitation or conspiracy.

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(3) Notice shall be given of the restricting order to thepersons so restricted, and the reason therefor shall bepublicly declared.

Article 169.- Adult insane persons and imbeciles who areunder a restriction shall be of the same status as a minorof no capacity.

Article 170.- (1) Dispositions made by an idiot or personsuffering from a mental disability occurring after either anapplication for a restriction has been ma~e or after anorder in that behalf .has been made or after an applicationor order for restoration of guardianship has been made shallbe subject to the same provisions as govern dispositionsmade by persons of defective capacity.

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(1 ) It shall be permissible for the 'cour'E~=--":"'-"'~_:::::=-'-., ""': "- - '~--:-~-"-'-r"

to permit a person under a restriction on the grounds ofidiocy or mental disability to have all or part of hisproperty for administration thereof.

(2) The law shall.lay down provisions in that behalf.

Article 172.- The laws shall set out the procedures to befollowed with regard to restrictions over restrictedpersons, the management and exploitation of their property,and dealing therein, a~d other questions relating toguardianship, tutelage and protection.

Article 173.- If a person is deaf and dumb or blind anddeaf, or blind and dumb and he is by reason thereof unable

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to express his intent, it shall be permissible for the judgeto appoint a judicial assistant for him to help him in hisdispositions if his interests so require, in such manner asis laid down by law. '

Article 174.- Dispositions made by guardians, tutors orprotectors shall be valid within the limits laid down bylaw.

Article 175.- If a person of defective capacity uses'deceitful means to conceal his defect in capacity, he shall.be bound to pay .compensa t Lon .

(4) Defects in Consent(a) Duress

Article 176. - Duress is' coercion of a per:0r1w~tl.?:c;l,l,kth~.,;.:.:,-"",,-;c

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Article 180.- Duress may vary according to differentpersons, their age, weakness, position, rank, influence, thedegree to which they are hurt by the duress whether lesseror greater, and by any factor which may affect theseriousness of the duress.

Article 181.- In order for there to be duress the personexercising it must be capable of carrying out his threat,and the victim must believe that the threat will be carriedout immediately if he does not do that which he is coercedinto doing ..

\ Article 182.- A person who exercises either kind bf duressto conclude a contract may not enforce his contract, but thecontract will be valio if the victim or his heirs so permitafter the threat has ceased, either expressly or by their

acts'~:~~?jI~t~~~~:~~~,~~Article 183. - If a husband coerces~hls,,*~t?'l'ii Hider- "..;:::~::=,or forbidding her to see her fampy.ort):r~~-iC:="""';"him a right of hers or to give him pr~~;;~~,""fh~'~'di'Po~\fIoii';:'o~""..:-:~ .will not be effective.

one of the contracting parties, the person coerced intocontracting may not claim that the contract is ineffectiveunless he proves that the ~ther contracting party knew or ispresumed to have known of the duress.

'.Article 184.- If the duress is exercised otherwise than by

(b) Deception and cheating

[Tr: The wdrd translated a~ "cheating" is ghubn, meaningtrickery or persuasion of a person to enter into anunconscionable bargain involving an imparity between theconsideration moving from' each party).

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Article 185.- Misrepresentation is when one of the twocontracting parties deceives the other by means of trickeryof word or deed.which leads the other to consent to what hewould not otherwise have consented to.

Article 186.- Deliberate silence concerning a fact or setof circumstances shall be deemed to be a misrepresentation,if it is proved that the person misled thereby would nothave made the contract had he been aware of that fact or setof circumstances .

Article 187.- If one of the contracting parties makes amisrepresentation to the other and it transpires that thecontract was concluded by a gross cheat, the person somisled may cancel the contract.

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Article 188. - Gross cheating. iflvQ.1.',/~Qg.land.or.ictherwi se. . ." ~,_;;..;;.;~~4~~'"';;:;;E;:f.i.;~;..,: .....:~~;,.,;?J:~ ... -_.......

is a bargain which no ()r.c!ir;~r.;Y~~~~~~~liat ....market coul d contem~~ate'.-~;~-:~~~~ifiEl~?Z~~;q:--::;;-,:~~~~.;~.~~_-~~ .. _'_OO_':~:

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... -.?""'~~---e.~~~"""""'- __, - . reccaeeeaee- _Article 189.- Ifthe-che~ting~how~v~?s~g~;~~fet~stheproperty of a person under judicial restriction on accountof a debt or a terminally ill person, and that person's,liabilities exceed his assets, the contract shall bedependent upon the cheating being redressed, or the consentof the creditors, other~ise it shall be void .

Article 190.- If the misrepresentation is made by a personother than the contracting parties, and the person to whomthe misrepresentation was made proves that the othercontracting party kne~ of the misrepresentation, it shall bepermissible for him to cancel the contract.

Article 191.- A contract may not be cancelled on the basisof a gross cheat in the absence of misrepresentation save in

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respect of property of a person under restriction, waqfproprrty, and property of the State.

Artible 192.- The right to cancel for misrepresentationand~ross cheat shall lapse on the death of the personhaving the right to apply for the cancellation or upon adealing made in the subject matter of the contract in wholeor in part in such a way as implies consent, or if theproperty is destroyed while in the possession of. the personwho would otherwise have such right, or if he consumes it,damages it, or increases it .

(c) Mistake

Article 193. - No r eqe rd shall be had for any mistake savein so far as it 1S contained in the form of the contract ordemons t r a te~_ ~y?~t:L~~~~~~~~~~fs andcond i t ions, 'or-3t:::h~na1:l~~iJ;i&o=cg~ql'rt()m,'.

. .,:c~::i~~~~~~=,;~:;'~;;~i~~._Article 194.._-":'.:~;I,:f~~~_2"f~1li&.:f~~~~~t2; the id~ntity ofthe contract or as 'tci 'oneof -tFie--condltion~'upon which it ismade or as to the subject matter of the contract, thecontract shall be void.

Article 195.- A contracting party shall have the right.tocancel the contract if he has made a mistake in a desired(non-essential) matter such as a characteristic of thesubject matter of the contract or the identity of the othercontracting party or as to a characteristic of such. person.

Article 196.- A contracting party shall have the right tocancel the contract 'if he makes a mistake of law and theconditions relating to a mistake of fact under Articles 193and 195 are satisfied, unless the law provides otherwise.

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Ar"ticle 197.- A mere mistake in an account or in a writing

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shall not affect the contract, and it shall simply berectified.

Article 198.- A person who has made a mistake may not relyon it in a manner inconsistent with good faith.

(5) The subject matter and purpose of the contract(a) The subject matter of the contract,

Article 199.- Every contract must have a subject matter towhich it attaches.

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Article 203. - (1) In commutative contracts involvingproperty the subject matter must be specified in such a wayas to avoid gross uncertainty by reference to it or to theplace where it is if it is in existence at the time of thecontract or a statement of its distinguishing character-istics, and the amount thereof must be stated if it ismeasurable property or the like, so as to avoid grossuncertainty.

(2). If the subject matter is known to both contractingparties there is no requirement that it should be otherwisedescribed or defined.

(3) If the subject matter is not specified as aforesaid,the contract shall be void.

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value~of;:;.tJija...t;::gqnjffaJ~3:j;n~i;ll:'t~=;ofpayment .hav i nq any ' .. '_" __ ._.:,: ,:"_~_T' ,..-~_" _

effect.

Article 205.- (1) The subject matter must be such asfalls within the ambit of a contract .

(2) If the law prohibits dealing in a thing or if it iscontrary. to public order or morals, the contract shall bevoid.

Article 206.- The contr~ct may be accompanied by acondition confirming its pur,port or consistent with it or inaccordance with usage and custom or containing an advantageto one of the contracting parties or a third party, providedthat in the case of all of the foregoing it is notprohibited by law or contrary to public order or morals,

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otherwi~e the condition shall be void and the contract shallbe valid, unless the condition is the inducement to make thecontract, in which case the contract also shall be void.

(b) The purpose of the contract

Article 207.- (1) The reason is the direct purpose aimedat by the contract.

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(2) The reason must be existent, valid, and permitted, andnot contrary to public order or morals.(

Article 208.- (1) The contract shall not be valid if itdoes not contain a lawful benefit to both contractingparties.

lawful

"'-~::~-'{:;:-~~,~s'-'~'"~::::::::c-~~t~~",-Va lid I vo id(a) The valid contract

Article 209.- A valid contract is a contract which islawful in its essence and description, being made by acompetent person in respect of a subject matter properlyfalling within the ambit of a contract, having an existing,valid and lawful purpose and in proper form, andunaccompanied by any vitiating condition.

(b) The void contract

Article 210.- (1) A void contract is one which isunlawful in its essence and form, lacking the elements of acontract or defective in its subject matter or purpose orform as laid down by law for the making of a contract, and

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such contract shall be of no effect and shall not be capableof being rectified by consent.

(2) Any person having an interest may rely on the voidnessof the contract and a judge may so rule of his own motion.

(3) No claim (for a declaration) that a contract is voidshall be heard after the expiry of 15 years from the datethe contract was made, but any person hav ing an interest mayraise the defence of the voidness of the contract at anytime.

Article 211. - (l) If part of a contract is void theentire contract shall be void unless the subject matter ofeach part is' (separately) specified in which case it shallbe void as to the void part, and the remainder shall bevalid .'

(2) If part .of a contract is dependerit vupon the grant .Qf.. a ;;.~, --,._ ~_....._ ..._-~~ ...~._.J~'::'"....

. consent; then if the consent is given the whole contract"' will be effective and if the consent is not,given only thatpart will be void together with the consideration therefor,and the remaider of the contract with its consideration willbe valid.

(c) The defective contract

Article 212.- (1) A voidable contract is one which is

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lawful in its essence but not in form, and if the cause ofthe voidability is removed, the contract shall be valid.

(2) A transfer of ownership under a voidable contract shallonly be effective if he property itself has been received.

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(3) A voidable contract shall only have effect within thearea laid down by the provisions of the law.

(4) Each of the parties to the contract and their heirsshall have the right to cancel the contract after givingnotice to the other contracting parties.

(7) Suspended and non-binding contracts(a) The suspended contract

Article 213.- :A disposition shall be dependent for theeffectiveness thereof upon ratification it it is made by avolunteer in respect of property belonging to another or byan owner in respect of property of his encumbered by a thirdparty right or by a person lacking capacity in respect ofhis own property, where such transaction lies in the areabetween (pure) advantage and (pure) detriment or is ~~~~under duress, or if the law-so provides. -----

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Article 214. - The right to grant or wLthhold'"C'Cl'RSel'ltll.'t:O''''",_the contract shall be ~hat of the owner or the p~rso~ inwhose favour the right over the thing contracted for exists,or in the tutor or guardian, or in the person of defectivecapacity after the defect has been remedied, or the personwho has suffered duress after the duress has been removed,or such person to whom the law gives that power.

Article 215.- (1)indicating the same

Consent mayexpressly or

be by any act- orby implication.

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(2) Silence shall be. taken to be consent if by custom itindicates consent .

Article 216.- It is a condition of the validity of theconsent that the disposition stiould have been one capable of

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being consented to at the time it was made and at the timethe consent is given, and it is likewise a condition that atthe time the consent is gi~en,there should be in existencethe person who had the right to give the consent, the twoparties to the contract, the subject matter of the contract,or a substitute therefor if it is ,a specified thing.

Article 217.- (1) If consent is given to a suspendedtransaction, ,it shall become effective retroactively to thetime it was made, and the subsequent consent shall have thesame effect as a prior agency.

'__ (2) If consent is refused, the disposition shall be void.

(b) The non-binding contract'=.:-.~..,..,

Article 218.- (L) A contract shall notbe~fi{nding on one'"or both'of t.he i corrt r ac t i nq parties desp i t e its-va'll:C1ity-and

~ffectiveness if there is a condition~cn~~such~party ~ay. . .".

cancel it without mutual consent or an order of the court ..1

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(2) Each party may act unilaterally in cancelling it if byits nature the contract is not binding upon him or if he has,made it a condition in his own favour that he has the optionto cancel.

(8) Options affecting the binding nature of the contract(a) The option of conditionality

Article 219.- In bipding contracts which are liable to becancelled it shall be permissible for the contractingparties or either of them to make it a condition in the,contract or thereafter that he should enjoy the benefit ofthe option of conditionality in his own or another's favourfor such period as may be agreed between the parties, and if

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they do not agree on a particular period, it shall bepermissible for the judge to specify that period inaccordance with custom.

Article 220.- If each of the two contracting parties hasthe advantage of the benefit of conditionality incommutative contracts involving property and theconsideration on both sides has not left the ownership ofeither of the contracting parties but one then exercises theoption to cancel, that property shall not pass out of hisownership neither shall the property of the other pass intothe ownership of the first.

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option of conditionalityto affirm the contract.

Article 221.- (1) The person having the benefit of theshall have the right to cancel or

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- ~-.7:.:~~~(2) If he elects to confirm the contract, it shafr become. . . - ' ......~

. binding with retroactive effect tot_he date on wh~ch it wasmade, and if he efect~ to "'cancEft'Jft';'O~the contract shall becancelled and deemed void ab initio.

Article 222.- If both of the contracting parties have theadvantage of the option of conditionality and one of themelects to cance~ the contract, the contract shall becancelled notwithstanding that the other may have affirmed,and if one affirms the contract the other shall retain hisoption to cancel throughout the period laid down for theoption.

Article 223.- (1) Cancellation or affirmation may takeplace by any act or word indicating the same, whetherexpressly or by implication.

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UAE 2/87 THE CIVIL CODE:..'

(2) If the period expires without the option to cancel orto affirm being exercised, the contract shall becomebinding.

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Article 224.- (1) In order for the cancellation to bevalid, the option in that behalf must have been exercisedwithin the period thereof and the other party notifiedthereof if the cancellation is effected by words and is notdependent on.mutual consent or an order of the court.

(2) With regard to affirmation, it is not a requirement (ofthe contract becoming binding) that the other party should

, know of it.

Article 225.- The option shall lapse upon the death of theperson entitled to exercise it during the period thereof.The contract shall becO!1i';"i6'fRding with regard to h i s vheirs ,and the other party. ehe Ll vr et.a i ri-b i s 'option, if heoriginally had anopt.l;on.,.",.",nt.i! the exp-iry of the periodthereof.

(b) - The option to inspect

Article 226.-The option to inspect shall arise incontracts liable to cancellation in favour of the person towhom the disposition is made even though not expresslystipulated if the subject matter of the contract has notbeen seen, and is specified.

Article 227.- The option to inspect shall remain until theinspection is carried o~t within the agreed period, or untilanything occurs which causes it to lapse.

Article 228.- The option to inspect shall not prevent thecontract becoming effective but will only prevent it

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becoming binding on the person in whose favour the optionexists. .-

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Article 229.- (1) The option to inspect shall not lapse

by non-exercise.

(2) The option will lapse upon the inspection of the thingcontracted for and its acceptance whether expressly or byimplication, and it will likewise lapse upon the death ofthe person having the option, the destruction of the goodsconcerned, whether in whole or in part, or by their becomingdefective, or the disposition thereof by a person having theright so to do by way of a disposition which may not becancelled, or in such a way as gives rise to a right in athird party.

Article 230. ":,,~,;,.Ca.JlGe,llation under the option to inspect maybe by any .ac t or word indjcating the same whether expresslyor by implication, but'on condition that the other

_~~~,~~Of.~.j.$t ..""'.m,.. .contracting party is aware thereof.

(cl The option to specify (one out of two ormore potential objects of the contract)

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'.Article 231.- It shall be permissible to agree that thesubject matter of the contract shall be one of two or threethings, and that one of the contracting parties shoul

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