Force Majeure in UAE Contracts: Tenancy, Off-Plan Property, Employment, and Commercial Leases

Force majeure under UAE law does not merely pause your contract — it can terminate it entirely.

Under Article 273 of the UAE Civil Transactions Law (Federal Law No. 5 of 1985), if an unforeseeable event renders contractual performance impossible, the corresponding obligations cease and the contract is automatically cancelled. This is fundamentally different from how force majeure operates in common law jurisdictions, where it typically suspends obligations. In the UAE, the default outcome is termination — and the bar for proving it is high: you must demonstrate absolute impossibility, not merely difficulty, delay, or increased cost.

This guide explains how force majeure and the related doctrine of exceptional circumstances (hardship) work in practice across the contract types that UAE residents encounter most often: tenancy agreements, off-plan property purchases, employment contracts, and commercial leases. We cover the legal tests, the distinction between impossibility and hardship, what constitutes valid evidence, how to notify the other party, and where to file a dispute. If you are a tenant wondering whether you can break your lease, an off-plan buyer facing construction delays, an employee facing layoffs, or a business owner dealing with disrupted supply chains — the legal framework is the same, but the practical application differs significantly.

The Legal Framework: Articles 249, 273, and 287

Three provisions of the UAE Civil Transactions Law govern situations where contractual performance is affected by extraordinary events. Understanding the distinction between them is essential because each triggers a different legal outcome — and invoking the wrong one can weaken your position or expose you to liability for unlawful termination.

Provision	Legal Test	Outcome	Who Decides
Article 273 — Force Majeure	Performance is impossible (total or partial)	Contract automatically terminated; parties restored to pre-contractual position	Operates by law (but courts verify if conditions are met)
Article 249 — Exceptional Circumstances (Hardship)	Performance is not impossible but has become excessively onerous, threatening grave loss	Court adjusts obligations to a reasonable level (e.g., reduces rent, extends deadlines); contract continues	Court or arbitral tribunal (judicial discretion)
Article 287 — Defence to Liability	Loss arose from an extraneous cause beyond the party’s control	Party is not liable for damages caused by the event	Court or arbitral tribunal

The Three Conditions for Force Majeure (Article 273)

UAE courts require all three conditions to be satisfied simultaneously for a force majeure claim to succeed:

1. Unforeseeability: The event must have been genuinely unexpected at the time the contract was formed. Routine business risks, market fluctuations, and foreseeable events do not qualify. War, natural disasters, pandemics, and government-imposed restrictions have been recognised as unforeseeable events by UAE courts.
2. Unavoidability: The consequences of the event must have been unavoidable despite reasonable efforts to mitigate. If there was a practical workaround — even an expensive or inconvenient one — the claim fails.
3. Impossibility of performance: The event must render performance absolutely impossible, not merely more costly, difficult, or delayed. This is the highest bar. During the COVID-19 pandemic, UAE courts consistently held that increased cost or reduced profitability did not constitute impossibility — a contractor who continued performing part of the works could not later claim force majeure for the portion completed.

The burden of proof lies with the party invoking force majeure. The Dubai Cassation Court has confirmed that you must demonstrate that your inability to perform was directly caused by the force majeure event, not merely coinciding with it.

Exceptional Circumstances / Hardship (Article 249)

If you cannot meet the impossibility threshold of Article 273 but your contract has become economically devastating due to unforeseeable events, Article 249 offers an alternative remedy. Under this provision, the court can rebalance the contract — reducing rent, extending deadlines, adjusting payment schedules — rather than terminating it entirely. The court weighs the interests of both parties and aims for a fair outcome. Any contractual clause attempting to exclude the application of Article 249 is void — this is a mandatory provision of UAE law that cannot be contracted out of.

In practice, UAE courts have been more willing to apply Article 249 (rebalancing) than Article 273 (termination). This is an important strategic consideration: if your goal is to adjust rather than exit a contract, framing your claim as hardship under Article 249 rather than impossibility under Article 273 may be more likely to succeed.

Tenancy Contracts: Can You Break Your Lease?

For tenants in Dubai, the tenancy relationship is governed by Law No. 26 of 2007 (as amended) and administered by the Rental Disputes Centre (RDC) under the Dubai Land Department. Force majeure under the Civil Code applies to tenancy contracts, but the practical threshold is extremely high.

Can a tenant break a lease citing the current conflict as force majeure? Almost certainly not — unless the property itself has been rendered physically uninhabitable. The key legal test is whether performance (i.e., occupying the property and paying rent) has become impossible. If the property is intact and habitable, the tenant’s obligation to pay rent continues regardless of economic hardship, reduced income, or a desire to leave the country. Leaving the UAE voluntarily does not constitute force majeure — the contract is performable; the tenant has chosen not to perform.

However, a tenant may have stronger grounds under Article 249 (hardship) if, for example, the conflict has caused a dramatic and unforeseeable change in circumstances that makes continuing the lease excessively onerous. A tenant whose employer terminated their contract due to the crisis, whose income has been eliminated, and who cannot find alternative employment might argue that continuing to pay rent at the pre-crisis level constitutes grave financial loss. The RDC could, at its discretion, reduce rent or modify the lease terms — but it would not automatically release the tenant from the contract.

Scenario	Force Majeure (Art. 273)?	Hardship (Art. 249)?
Property physically destroyed or rendered uninhabitable by an attack	Yes — likely	N/A (contract terminates)
Tenant left the UAE voluntarily but property is habitable	No	Unlikely — voluntary departure
Tenant lost job due to company closure caused by crisis	No (property still usable)	Possible — grave financial loss
Tenant’s building has intermittent safety concerns but is structurally sound	Unlikely	Possible — reduced habitability

Practical step for tenants: If you want to negotiate early termination, approach your landlord in writing first. Cite specific circumstances (job loss, visa cancellation, departure from the UAE) and propose terms (forfeiture of deposit, payment of one or two months’ penalty as per your lease’s early termination clause). Many landlords will negotiate rather than face a vacancy and a Rental Disputes Centre filing. If negotiation fails, file with the RDC through the Dubai Land Department. The filing fee is 3.5% of the annual rent (minimum AED 500, maximum AED 20,000).

Off-Plan Property: Developer Delays and Buyer Rights

Off-plan sales and purchase agreements (SPAs) in Dubai are regulated by RERA and subject to escrow account rules. Developers may invoke force majeure to justify construction delays — and the current Strait of Hormuz disruption affecting building material supply chains is a plausible basis for such claims.

Developer claiming force majeure for delays: RERA generally grants developers a 12-month grace period beyond the contractual handover date before a project is classified as delayed. During this period, developers are not liable for penalties, and buyers cannot typically cancel for delay alone. If the delay extends beyond the grace period, buyers may have grounds to cancel and claim a refund — but the developer may argue force majeure to extend the grace period further.

For the developer’s force majeure claim to succeed, it must demonstrate that the specific delay was caused by the event (e.g., inability to import steel due to Hormuz closure), that the delay was unforeseeable at the time the SPA was signed, and that the developer took reasonable steps to mitigate. If the project was already delayed before the current conflict began, the developer cannot retroactively attribute pre-existing delays to force majeure.

Buyer seeking to cancel due to changed circumstances: A buyer who wants to exit an off-plan SPA because property values have dropped or because they are leaving the UAE faces the same high bar. Reduced property value or personal financial difficulty does not constitute force majeure — the buyer’s obligation to make payments is not rendered impossible by the conflict. Article 249 (hardship) is theoretically available if the buyer can demonstrate that continuing payments would cause grave loss due to unforeseeable circumstances, but RERA and Dubai courts have historically been protective of developers’ escrow rights.

Practical step for off-plan buyers: Review your SPA’s force majeure clause — many Dubai SPAs contain bespoke definitions that may be broader or narrower than the Civil Code default. Check the contractual handover date and whether the 12-month grace period has been triggered. If the developer is invoking force majeure, request written notice specifying the event, the affected obligations, and the mitigation steps being taken. If you believe the claim is unjustified, file a complaint with RERA’s dispute resolution process.

Employment Contracts: Layoffs and Unpaid Leave

UAE employment relationships in the private sector are governed by Federal Decree-Law No. 33 of 2021 (the Labour Law), with the Civil Code applying as a supplementary framework. The intersection of force majeure and employment law creates specific issues that employees and employers need to understand.

Can an employer terminate employees citing force majeure? Article 42 of the Labour Law includes “permanent closure of the establishment in accordance with UAE legislation” as a valid termination ground. If a business genuinely ceases operations entirely due to the conflict, this may constitute a lawful basis for termination. However, employers must still comply with all procedural requirements: proper notice periods, payment of end-of-service gratuity, settlement of accrued leave, and all other statutory entitlements. Force majeure does not waive the employer’s financial obligations to the employee.

Unpaid leave or reduced pay: Some employers are placing employees on unpaid leave or reducing salaries, citing reduced business activity due to the conflict. Under UAE Labour Law, any reduction in wages or change to employment terms requires the employee’s written consent. Unilateral salary reductions without consent may constitute a breach of contract, giving the employee grounds to file a complaint with MOHRE. During the COVID-19 pandemic, MOHRE issued specific ministerial decisions permitting temporary salary reductions and unpaid leave — no equivalent ministerial decision has been issued for the current situation as of March 2026.

Visa implications: If your employment is terminated — whether by mutual agreement, employer initiative, or business closure — the standard grace period after job loss applies. You must find a new sponsor, change your visa status, or leave the UAE within the applicable grace period (30 to 180 days depending on your visa category). Force majeure does not extend the grace period beyond what is provided by law.

Commercial Leases and Business Contracts

Commercial tenancy contracts, supply agreements, service contracts, and other business arrangements are subject to the same Civil Code framework (Articles 249, 273, 287). The practical application depends heavily on the specific terms of each contract.

Commercial lease early termination: A business tenant seeking to break a commercial lease because revenue has declined cannot invoke force majeure — the property remains usable. However, if government authorities have ordered a specific building closed or restricted access to a commercial area, the tenant may have a partial impossibility argument. Article 249 hardship claims are more relevant for commercial tenants facing severe but not impossible conditions — the court could reduce rent or restructure payment obligations.

Supply chain and service contracts: Businesses whose supply chains have been disrupted by the Strait of Hormuz closure or airspace restrictions have the strongest force majeure arguments. If a supplier physically cannot deliver goods because shipping routes are closed, that is closer to genuine impossibility than any of the real estate scenarios. However, the supplier must demonstrate that no alternative route or source existed, and that they took reasonable mitigation steps.

Payment obligations: Force majeure almost never excuses the obligation to pay money. If you owe rent, loan payments, or supplier invoices, the fact that your business has been disrupted does not make payment “impossible” — only the performance of non-monetary obligations (delivery of goods, completion of works, provision of services) can be rendered impossible. This is a critical distinction that many business owners overlook.

DIFC and ADGM: Different Rules Apply

Contracts governed by Dubai International Financial Centre (DIFC) or Abu Dhabi Global Market (ADGM) law follow common law principles, not the UAE Civil Code. In these jurisdictions, force majeure is a purely contractual concept — it exists only if the contract expressly includes a force majeure clause. There is no statutory fallback equivalent to Article 273.

If your DIFC or ADGM contract does not contain a force majeure clause, the available doctrine is frustration — which requires proof that the contract has become radically different from what was agreed, not merely more expensive or less profitable. The bar for frustration under English common law (which both DIFC and ADGM follow) is extremely high and rarely succeeds.

If your contract does contain a force majeure clause, courts will interpret it restrictively: the triggering event must be specifically covered by the clause wording (either expressly listed or clearly falling within a catch-all), notice requirements must be strictly followed, and the party relying on it must show it has taken all reasonable steps to avoid or mitigate the effects of the event.

How to Invoke Force Majeure: Practical Steps

1. Review your contract first. Many UAE contracts contain bespoke force majeure clauses that define triggering events, notification requirements, and consequences differently from the Civil Code default. The contractual clause takes priority if it is more specific.
2. Determine whether your situation is impossibility or hardship. If you can still technically perform (pay rent, make payments, deliver a modified service), you are in hardship territory (Article 249), not force majeure (Article 273). This distinction determines which remedy is available.
3. Send formal written notice immediately. Even though Article 273 technically operates automatically, UAE courts expect good faith notice. Your notice should identify the specific event, explain how it makes performance impossible or excessively onerous, list the affected obligations, describe the mitigation steps you have taken, and state whether you are invoking Article 273 (termination) or Article 249 (adjustment).
4. Document everything. Gather evidence linking the event to your inability to perform: government announcements, airspace closure notices, shipping disruption records, employer termination letters, medical reports, photographs of damage. The burden of proof is on you.
5. Attempt negotiation before litigation. UAE courts and tribunals look favourably on parties who attempted good-faith negotiation. A written record of your attempts to resolve the matter amicably strengthens your position.
6. File in the correct forum. Tenancy disputes go to the RDC. Off-plan disputes go to RERA. Employment disputes go to MOHRE (then court if unresolved). Commercial disputes go to UAE civil courts or arbitration per the contract terms. DIFC and ADGM disputes go to their respective courts.

The New Civil Transactions Law (June 2026): What Changes

Federal Decree-Law No. 25 of 2025 — the new UAE Civil Transactions Law — enters into force on 1 June 2026, replacing the 1985 Civil Code. While the core principles of force majeure and hardship are retained, the new law introduces refinements. Good faith is expressly embedded as a central contractual principle. Pre-contractual disclosure obligations are codified. The proportionality test for abuse of rights is enhanced. Hardship and force majeure clauses in new contracts should be drafted with the updated framework in mind. Contracts concluded before 1 June 2026 generally remain governed by the 1985 law unless the new law expressly provides otherwise.

Frequently Asked Questions

Can I break my Dubai tenancy contract due to the conflict?

Only if the property has been rendered physically uninhabitable. If the property is intact and habitable, your obligation to pay rent continues. Leaving the UAE voluntarily does not constitute force majeure. You may have grounds for rent adjustment under Article 249 (hardship) if you have suffered severe financial loss — such as job termination — directly caused by the crisis. Approach your landlord first in writing, then file with the Rental Disputes Centre if negotiation fails.

Is war considered force majeure under UAE law?

War and armed conflict are recognised as the type of event that can qualify as force majeure — but the event alone is not enough. You must still prove that the specific war made your specific contractual obligation impossible to perform, that the impossibility was unforeseeable when you signed the contract, and that you took reasonable steps to mitigate. The event and the impossibility are separate legal requirements.

What is the difference between force majeure and hardship under UAE law?

Force majeure (Article 273) requires absolute impossibility of performance and results in automatic contract termination. Hardship (Article 249) applies when performance is still possible but has become excessively onerous due to unforeseeable events — the court rebalances the contract (reduces rent, extends deadlines) rather than terminating it. Most situations arising from the current conflict are more likely to qualify as hardship than force majeure, because performance (paying money, occupying property) remains technically possible.

Can a developer use force majeure to justify off-plan construction delays?

Potentially, if the developer can demonstrate that the specific delay was caused by an unforeseeable event (e.g., inability to import materials due to Strait of Hormuz closure) and that reasonable mitigation steps were taken. RERA’s standard 12-month grace period applies first. Pre-existing delays before the conflict cannot be retroactively attributed to force majeure. Buyers should request written documentation from the developer specifying the cause, duration, and mitigation measures.

Can my employer reduce my salary or place me on unpaid leave due to the conflict?

Not unilaterally. Under UAE Labour Law, salary reductions and changes to employment terms require the employee’s written consent. No ministerial decision equivalent to the COVID-era temporary measures has been issued for the current conflict. If your employer reduces your pay without consent, you may file a complaint with MOHRE. Employers who permanently close due to the crisis may lawfully terminate contracts, but must pay all statutory entitlements including gratuity and notice period compensation.

Does force majeure excuse the obligation to pay money?

Almost never. Under both UAE Civil Code and DIFC/ADGM common law principles, force majeure typically does not excuse monetary payment obligations. Paying money is rarely “impossible” — it may be difficult or financially painful, but the physical act of transferring funds is not prevented by external events. This means rent, loan repayments, and supplier invoices generally remain due regardless of the conflict.

How do DIFC and ADGM contracts handle force majeure differently?

DIFC and ADGM follow English common law, where force majeure is a purely contractual concept — it only exists if your contract expressly includes a force majeure clause. Without such a clause, your only option is the doctrine of frustration, which has an extremely high threshold. Unlike the UAE Civil Code, there is no statutory Article 249 equivalent for court-ordered contract rebalancing in DIFC or ADGM.

What happens if both parties to a contract are affected by the same force majeure event?

If the event renders both parties’ obligations impossible, the contract is terminated under Article 273 and both parties are restored to their pre-contractual positions. Any advance payments or deposits should be returned. If only one party’s obligations are affected, only that portion of the contract is extinguished under Article 273(2), and the remaining obligations continue.

Where do I file a force majeure dispute?

The forum depends on the contract type. Tenancy disputes: Rental Disputes Centre (RDC) under the Dubai Land Department. Off-plan property disputes: RERA. Employment disputes: MOHRE, then court if mediation fails. Commercial disputes: UAE civil courts or contractual arbitration. DIFC contracts: DIFC Courts. ADGM contracts: ADGM Courts. Filing in the wrong forum wastes time and fees.

When does the new Civil Transactions Law take effect and does it change force majeure rules?

Federal Decree-Law No. 25 of 2025 enters into force on 1 June 2026. It replaces the 1985 Civil Code but retains the core force majeure and hardship framework. Key refinements include codified good faith obligations, enhanced proportionality tests, and pre-contractual disclosure duties. Contracts concluded before 1 June 2026 generally remain under the 1985 law. Businesses should review and update force majeure clauses in template contracts before the new law takes effect.

Official Sources

• UAE Government Portal — Justice, Safety and the Law
• National Law Review — Force Majeure Provisions Under UAE Law (March 2026)
• Charles Russell Speechlys — Force Majeure, Impossibility and Frustration Under UAE Law During the Current Crisis
• Al Tamimi & Company — Impact of War on Contractual Obligations (March 2026)
• Squire Patton Boggs — New Civil Transactions Law (Federal Decree-Law No. 25 of 2025)
• Pinsent Masons — Force Majeure Clauses in the UAE

Information current as of March 2026. The UAE Civil Transactions Law (Federal Law No. 5 of 1985) governs contracts concluded before 1 June 2026. Federal Decree-Law No. 25 of 2025 takes effect on 1 June 2026 for contracts concluded from that date. Force majeure claims are fact-specific; outcomes depend on individual contract terms and circumstances. This guide is informational and does not constitute legal advice. For specific disputes, consult a qualified UAE lawyer.