In a landmark move to modernise its legal system, the United Arab Emirates government has issued a comprehensive new Federal Decree Law to restructure the nation's Civil Transactions Law. This historic reform aims to create a simpler, clearer, and more coherent legal framework that aligns with the evolving needs of modern society and the global business community.
Core Reforms: Empowering Youth and Protecting Rights
One of the most significant changes grabbing headlines is the reduction of the age of legal majority. The age has been lowered from 21 lunar years to 18 Gregorian years, bringing the UAE's civil law in line with international standards and other domestic laws like the labour and juvenile codes.
This shift carries profound real-world implications. Young adults who are 18 years old can now independently enter into contracts and manage their own financial affairs. Furthermore, minors aged 15 and above are empowered to apply for judicial permission to manage their property, a step designed to encourage youth entrepreneurship and business participation from an early age.
The law also strengthens protections for vulnerable individuals. Courts are now authorised to appoint judicial assistants for people who cannot express their will, ensuring their legal and financial decisions are made in their genuine best interests. At its heart, this legal update reinforces the principles of legal capacity and protects free will, carefully balancing personal empowerment with necessary safeguards against exploitation.
Transforming Everyday Legal and Business Interactions
The scope of the new legislation extends far beyond age adjustments, fundamentally rewriting how civil agreements function to make daily legal interactions more predictable and fair.
In the realm of contracts and pre-contractual negotiations, the law introduces a crucial duty for parties to disclose fundamental information before signing agreements, promoting transparency and informed decision-making. It also establishes provisions for framework agreements, which will streamline long-term or recurring contracts and help reduce repetitive paperwork and potential disputes.
Sales and consumer protection rules have been significantly clarified. For various sales types, including sale by sample, buyers now have explicit, clearer options if they receive defective goods. They can choose to reject the product, accept it with a price reduction, or request a full replacement. The law also extends the time limit to file a claim for hidden defects to one year from the date of delivery, unless a longer period is contractually agreed upon.
A notable update in compensation rules addresses injuries or deaths. In cases where traditional blood money (diya) does not fully cover the harm suffered, the new law permits it to be combined with additional compensation. This ensures more complete redress for both moral and material damages.
Boosting Business and Ensuring Judicial Integrity
The reform delivers substantial updates to corporate and commercial law, creating a more favourable environment for enterprise. Single-person companies are now formally recognised, opening new, streamlined pathways for solo entrepreneurs. Regulations concerning shareholder withdrawal, company continuation, liquidation, and overall corporate stability have been made more transparent.
For nonprofit companies, the law mandates that profits must be reinvested into their core mission, reinforcing their community impact. Professional firms, such as legal and consulting practices, finally receive a dedicated legal framework tailored to their operations.
In a critical move to uphold judicial integrity, the law explicitly bans judges, prosecutors, and their legal teams from acquiring any disputed rights in cases they are handling. This provision is a strong safeguard designed to prevent conflicts of interest and maintain public trust in the legal system.
Additional Key Updates
Other important revisions within the comprehensive law include:
- Clearer rights and obligations in contracts for major works (like construction and large projects), with options for courts to restore balance if unforeseen changes occur.
- A streamlined and refined legal framework for insurance and takaful (Islamic insurance) to better protect all involved parties.
- New frameworks governing possession and the assignment of rights, with mechanisms to prevent encroachment before actual harm happens.
- A mandate that usufruct and sanctuary construction rights must be officially registered to be valid, a significant change for property developers and investors.
The overarching goal of this sweeping reform is to establish greater legal certainty. Whether for a teenager launching a tech startup, an expatriate purchasing a first home, or a multinational corporation signing a complex, multi-year deal, these updated rules provide a clear and predictable legal roadmap. By moving away from confusing and overlapping regulations, the UAE offers a single, unified reference point.
By prioritising principles like "Good Faith" and mandatory disclosure, the UAE aims to reduce the potential for legal disputes before they even begin. As highlighted by the UAE Government Media Office, this decree represents a "pivotal legislative milestone" that solidifies the UAE's position as a premier global hub for business and a safe, stable home for families of all nationalities.
