Federal Decree-Law No. 25 of 2025 · UAE Federal
The new UAE Civil Code, in force from 1 June 2026: it repeals the 1985 law and re-enacts the rules on persons, property, obligations, contracts, harmful acts and conflict of laws, lowers the age of majority to 18 Gregorian years, adds pre-contract disclosure duties and framework agreements, updates sale and latent-defect remedies and modernises single-person, non-profit and professional company provisions.
Federal Decree-Law No. 25 of 2025 promulgates a new Civil Transactions Law, the UAE Civil Code, and repeals the 1985 Code (Federal Law No. 5 of 1985 and its amendments). It was issued on 1 October 2025 on the proposal of the Minister of Justice, published in Official Gazette No. 809 on 14 October 2025, and by Article Three of the issuing decree applies from 1 June 2026. The Code runs to more than 1,400 articles in a preliminary part and four books: obligations (sources and effects), named contracts (ownership, benefit, work, aleatory and guarantee contracts), original real rights, and real securities.
The preliminary part keeps the hierarchy of sources (legislation, Islamic Sharia, custom, natural law and equity, Article 1) and the conflict-of-laws rules. Article 11 applies the law of nationality to natural persons' capacity, and to a foreign legal person the law of its effective head office, but UAE law where it carries on activity in the UAE. Article 19 lets the parties choose the law governing a contract, failing which the law of their common domicile or of the place of principal performance applies. Article 84 fixes full capacity at the age of majority, reached on completing 18 Gregorian years; Article 85 sets the age of discernment at 7.
The obligations book adds rules the 1985 Code did not have. Article 121 requires pre-contractual negotiations to be opened, conducted and broken off in good faith; negotiating creates no duty to contract, but bad-faith negotiation, including deliberately withholding a material statement, gives a claim for actual loss, not lost profit. Article 122 imposes a duty to disclose information of decisive importance to the other party's consent, which cannot be limited or excluded by agreement, with annulment for breach. Article 138 recognises the framework agreement, whose basic terms govern and form part of the later contracts between the parties unless otherwise agreed. Article 429 keeps the general rule that a claim is not heard after 15 years without acceptable excuse, subject to shorter statutory periods.
In the named contracts, Articles 493 and 494 confirm that a sale is concluded on the basis that the goods are free of defects and define the latent defect as one existing before sale or arising before delivery that is not visible on ordinary inspection, with defects appearing after delivery but caused earlier treated the same way. Article 603 defines the company contract and, by exception, allows a company to be formed or owned by one person or to reinvest its net profits in its purposes; Article 606 sends any company taking a commercial form to the Commercial Companies Law. Articles 645 to 651 regulate the professional company formed by licensed practitioners, including share transfers only with a majority of partners and the partner's personal liability for professional error alongside the company's liability to third parties. Status: in force since 1 June 2026.
Every natural and legal person who contracts, owns property, incurs or enforces obligations or litigates in the UAE outside the DIFC and ADGM, including foreign companies carrying on activity in the State, from 1 June 2026; the courts applying UAE law to contracts, torts, property and conflict-of-laws questions.
| Article 11 | Status and capacity of natural persons follow the law of nationality; a foreign legal person follows the law of its effective head office, but UAE law applies where it carries on activity in the UAE. |
| Article 19 | Contractual obligations are governed by the law the parties expressly choose, failing which the law of their common domicile or of the place of principal performance; contracts over real property follow the law of its location. |
| Article 84 | A person who reaches the age of majority with full mental faculties and is not interdicted has full capacity; the age of majority is reached on completing 18 Gregorian years. |
| Article 121 | Pre-contractual negotiations must be opened, conducted and broken off in good faith; negotiating creates no duty to contract, but bad faith, including deliberately withholding a material statement, gives a claim for actual loss, not lost profit. |
| Article 122 | Each party must disclose information of decisive importance to the other's consent; the duty cannot be limited or excluded by agreement and breach allows the injured party to seek annulment. |
| Article 138 | A framework agreement fixes the basic terms that govern the contracts the parties later conclude between them and forms part of those contracts unless otherwise agreed. |
| Article 429 | A right is not extinguished by lapse of time, but a claim is not heard against a party who denies it after 15 years without acceptable excuse, save where the law sets another period. |
| Article 494 | The latent defect that founds the buyer's option is one existing before sale or arising before delivery that is not visible on ordinary inspection or discoverable only by an expert or by use; defects appearing after delivery but caused earlier are treated the same. |
| Article 603 | A company is a contract by which two or more persons contribute money or work to a venture and share its profit and loss; by exception and under the legislation in force, a company may be formed or owned by one person, or reinvest its net profits in its purposes. |
| Article 606 | A company is civil if its activity is non-commercial; it is commercial if its activity is commercial or it takes a commercial form, in which case the Commercial Companies Law governs it. |
| Article 651 | In a professional company each partner is personally liable to the company and the other partners for professional error, and the company is liable to third parties for the partners' errors and for the acts of its managers. |
| Article Three | The decree-law is published in the Official Gazette and applies from 1 June 2026. |
From 1 June 2026 every contract, power of attorney and corporate document we prepare is read under this Code, and three changes reach our daily work. First, the disclosure duty in Article 122 cannot be excluded, so the entire-agreement and non-reliance clauses in our share-purchase and shareholder agreements no longer close off a claim for a withheld material fact; we now run a disclosure letter alongside the warranties. Second, Article 121 makes a walk-away from negotiations in bad faith compensable for actual loss, so term sheets and letters of intent for our transaction clients state expressly what is and is not binding. Third, Article 138 gives the framework agreements our clients use with distributors and service providers a statutory footing, and we draft the master terms knowing they will be read into each order. On capacity we confirm majority at 18 Gregorian years for signatories and beneficiaries, and on structuring we note that Article 603 now contemplates single-owner and reinvesting companies, with the detail left to the Commercial Companies Law.
| Repeals | Federal Law No. 5 of 1985 |
“Cites” and “Cited by” are built automatically from references in the full texts held in this library; they cover only instruments in the library.
Civil Transactions Law 1985 (repealed)
The UAE Civil Code of 1985, for forty years the general law of persons, property, obligations, contracts, torts and conflict of laws, with its Book One on personal obliga…
Commercial Companies Law
The principal law for onshore UAE companies: it sets out the permitted legal forms (joint liability, limited partnership, LLC, private and public joint stock), incorporat…
Commercial Companies Law Amendment 2025
Replaces Articles 3, 5, 8, 9, 14, 17, 32, 76, 78, 85, 105, 118, 208, 266 and 275 of the Commercial Companies Law and adds Article 15 bis: permits single-person and non-pr…
Evidence Law
Sets the rules of proof in civil and commercial disputes: official and customary written instruments, electronic records and signatures, witness testimony, oaths, expert …
Commercial Transactions Law
The UAE Commercial Code: defines merchants and commercial activities, including those conducted through technological means, the commercial books merchants must keep, bus…
Civil Procedure Code
Governs civil and commercial litigation before the onshore federal and local courts: jurisdiction, service of process including electronic service, pleadings and hearings…
Whether you are establishing a new venture, restructuring an existing enterprise, or exploring residency pathways — we are here to advise.
Arrange a Consultation →