Boilerplate Clauses UAE Contract Drafting
Governing law, force majeure and confidentiality, and the pitfalls the Civil Code creates for copied clauses
What the UAE Civil Code does to the clauses at the back of a contract: good faith under Article 246, Gharar and Ghubn, the limits on choosing a foreign law, and the UAE courts' exclusive jurisdiction over matters such as local real property. It then covers force majeure under Article 273, confidentiality that survives termination, and a table of common pitfalls.
Reviewed by Mohamed Noureldin, Founder, Managing Partner & Senior Legal Consultant
The clauses at the back of a contract are usually agreed last and read first when something goes wrong. Governing law, jurisdiction, force majeure, confidentiality, limitation of liability, indemnity: none of them says what is being bought or sold, and all of them decide what happens when the deal stops working. In the UAE there is a further problem. A clause lifted from an English-law precedent is not automatically sound here, because the contract will be read in a civil law system influenced by Sharia.
What the Civil Code does to a clause copied from elsewhere
UAE contract law is anchored in the Civil Code. It sets out the general principles: mutual consent, good faith under Article 246, and the binding nature of agreements. Islamic Sharia is a supplementary source of law, particularly in matters the Code does not address explicitly.
That has a direct effect on drafting. Even a meticulously drafted provision is subject to doctrines that sit above it and can affect its enforceability. A clause deemed to contain excessive uncertainty (Gharar), or to exploit the other party (Ghubn), may be struck down by the courts. A purely common law approach to drafting is therefore insufficient. Each clause has to be commercially sound and also structurally compatible with the civil law and Sharia-influenced legal environment it will be read in.
Choosing a foreign law does not switch off UAE law
Parties have considerable freedom to choose a foreign law to govern their contract. That freedom is not absolute. UAE courts will not enforce foreign laws that are contrary to the public order or morals of the UAE. Certain matters, such as those related to real property located in the UAE, are subject to the exclusive jurisdiction of the UAE courts.
So a clause that simply specifies a foreign jurisdiction may create a structural weakness. The choice should follow from a careful analysis of the contract's subject matter and the parties' profiles. For a complex international commercial transaction, specifying the jurisdiction of the Dubai International Financial Centre (DIFC) or the Abu Dhabi Global Market (ADGM) courts, which operate on a common law basis, can provide greater certainty and predictability. Draft the clause so that it is clear and unambiguous, and settle it alongside your dispute resolution priorities.
A force majeure clause that goes beyond the statutory minimum
Force majeure is recognised under Article 273 of the UAE Civil Code, which provides for the termination of a contract if performance becomes impossible due to a cause beyond the control of the parties. A bespoke clause does more. It defines the scope of qualifying events precisely, listing specific events, such as pandemics, cyber-attacks and particular supply chain disruptions, and establishing clear procedures for notification and mitigation.
That removes ambiguity and stops the other party relying on vague language to excuse non-performance. A standard clause may not adequately address the nuances of a regional political event, whereas a provision drafted for the contract can be tailored to such specific, foreseeable risks. What you are left with is a clear operational protocol on your side and a strict evidentiary burden on any party seeking to invoke the clause.
Confidentiality that outlives the contract
A generic confidentiality clause protects very little. Define "Confidential Information" with granular detail: not only data, but methods, strategies and even the existence of the agreement itself. Then delineate clearly what the recipient may do with that information and to whom it may be disclosed.
The clause must also specify the duration of the obligation, which may, in some cases, need to survive the termination of the contract indefinitely. It should include provisions for the return or destruction of confidential information upon termination, and it should set out the remedies for a breach, such as injunctive relief. Check as well that the wording works with the UAE framework for standard clauses, so that the clause is enforceable and protects your intellectual property.
Common pitfalls, clause by clause
The table below sets out what each clause is for, the drafting point that matters in the UAE, and the mistake that recurs.
| Clause type | What it is for | Drafting point in the UAE | Common pitfall |
|---|---|---|---|
| Governing law | Decide which law applies | Check the choice of law is not contrary to UAE public order; consider DIFC or ADGM for a common law application. | Assuming a foreign law clause is automatically enforceable, without considering UAE public policy exceptions. |
| Jurisdiction | Dictate the forum for disputes | Draft with precision to avoid ambiguity; specify the courts (e.g. DIFC, onshore) or the arbitration seat (e.g. DIAC). | Vague drafting leading to parallel proceedings or jurisdictional challenges, increasing costs and delays. |
| Force majeure | Excuse performance on your own terms | Go beyond the statutory minimum; list specific, relevant events and detail the procedural requirements (notice, mitigation). | Relying on the general Article 273 of the Civil Code, which may not cover commercially specific disruptive events. |
| Confidentiality | Keep control of information | Define "Confidential Information" broadly and specify that the obligation survives termination. | A clause that terminates with the contract, allowing a counterparty to use sensitive information after the fact. |
| Limitation of liability | Cap financial exposure | Keep the cap reasonable, and not so low as to be an invalid attempt to exclude liability for fraud or gross fault. | A liability cap disregarded by UAE courts for being unconscionably low or against public order. |
| Indemnity | Shift risk for third-party claims | Clearly define the scope of indemnified losses and the trigger for the indemnity obligation. | Overly broad or ambiguous indemnity language that becomes unenforceable or creates unintended obligations. |
We look at the indemnity in more detail in our note on indemnity clauses in UAE contract drafting.
Treating these terms as non-negotiable cedes ground
Boilerplate belongs to a company's risk architecture, not to its administrative housekeeping. Viewing these clauses as non-negotiable "standard" terms is a critical error. It cedes ground to counterparties and exposes the business to costly litigation, operational disruption and financial loss.
Drafting them properly changes what a business can do. Precise limitation of liability, indemnity and force majeure clauses let a company embed its own risk tolerance in every agreement and hold a predictable, defensible position. Well-drafted notice, assignment and amendment clauses keep control of the contractual relationship, so the business is not caught off-guard by unexpected changes or demands. And in a dispute, strong jurisdiction and dispute resolution clauses allow a business to dictate the terms of engagement, often putting the other side in a less favourable forum or a more costly process. Our commercial law team drafts and reviews these provisions.
Employment and personal service contracts
For individuals, the same clauses do different work. In employment and personal service contracts, the provisions on confidentiality, non-compete and termination can have a profound impact on career mobility and future prospects. Reading them carefully and negotiating them is how an individual protects their interests and avoids signing away critical rights.
Nour Attorneys drafts and negotiates commercial contracts in the UAE, and you can consult a business lawyer in Dubai.
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