UAE Civil Transactions Law 2026: What Changed, Why It Matters, and What Dubai Should Update Now

What changed in the UAE Civil Transactions Law in 2026?

“Think of the Civil Transactions Law as the UAE’s ‘rulebook for everyday life’: buying, selling, signing, building, assigning rights, and resolving civil disputes. The 2026 reforms don’t just tweak definitions—they change who can sign, what must be disclosed before signing, and how long buyers have to act when something they purchased turns out to be flawed.”

The 2026 reforms modernise UAE civil transactions by lowering the age of majority to 18, strengthening pre-contract disclosure, updating sales/defect protections, formalising framework agreements, and tightening registration rules for rights like musataha—changes that directly affect Dubai contracts, property deals, and dispute strategy.WAM+2Gulf News+

On 1 January 2026, UAE authorities announced a major modernisation of the Civil Transactions Law—the core legal framework governing civil obligations, contracts, property rights, and many day-to-day transactions. The reforms aim to create a clearer, more coherent legal environment that supports modern dealings while preserving legal authenticity.

This guide breaks the update into practical outcomes for:

• individuals and families
• buyers and sellers
• landlords, developers, and property investors
• businesses drafting contracts, framework agreements, guarantees, or assignments

Important note: This is an explanatory overview based on the public summary you provided, not formal legal advice. Court interpretation and final legislative text always matter.

1) Legal adulthood is now 18 (Gregorian)

The most widely felt update is the age of majority (full legal capacity). It has been reduced from 21 lunar years to 18 Gregorian years.

What this changes in real life

At 18, a person generally has clearer authority to:

• sign contracts
• manage financial affairs
• assume civil obligations in their own name

Youth entrepreneurship: asset management can start at 15 (with court authorisation)

The reform also lowers the age at which a minor may seek judicial permission to manage assets—from 18 (Hijri) to 15 (Gregorian)—to support earlier economic participation within a supervised framework.

What to update now (businesses + families):

• Adjust contract onboarding checks for 18–20-year-olds
• Review guarantor/guardian processes for minors
• Update HR/work policies that reference capacity-related milestones

2) Courts get more discretion when no legislative rule exists

Where no legislative provision governs an issue (explicitly or implicitly), judges are given broader flexibility to apply principles of Islamic Sharia and select solutions that best achieve justice and public interest—without being bound to one specific school of jurisprudence. The summary also notes Sharia application in the absence of special laws for certain cases such as unknown parentage, missing persons, and absentees.

Why this matters:

• In “new economy” disputes (novel contracts, hybrid arrangements), reasoning grounded in fairness, harm prevention, and public interest can carry more weight when statutes are silent.

3) Pre-contract negotiations now have clearer guardrails (duty to disclose)

A modern contract-law upgrade: regulation of the pre-contract negotiation phase, including a duty to disclose material information so parties can make informed decisions.

Practical impact

This can reshape how businesses handle:

• term sheets and proposals
• due diligence exchanges
• sales claims, assumptions, and “informal promises” made before signing

What to update now (templates + process):

• Add a “material disclosures” section to proposals/term sheets
• Document what’s been disclosed (and what hasn’t)
• Train sales teams on “no surprises” contracting

4) Framework agreements: built for long-term or repeated contracting

The reforms introduce framework agreements to organise repeated or long-term contracting by setting key terms once and using them consistently for future contracts.

Why businesses should care:

• Fewer disputes about which terms apply
• Faster procurement and project kickoff
• Cleaner governance for “Master + Order Form / SOW” structures

What to update now:

• Convert recurring client work into “Master Agreement + Work Orders”
• Standardise pricing, liability, dispute clauses, and change control

5) Property rights: musataha now requires registration (or faces nullity)

The law reorganises musataha (superficies-type right to build/use land) by requiring registration with the competent authority and providing nullity for non-registration. It also introduces obligations for the holder of musataha and allows parties to determine its term.

What to update now (real estate + development):

• Audit existing musataha arrangements for registration status
• Ensure financing/assignment documents match the registered position
• Add “registration completion” as a condition precedent in contracts

6) “Heirless” foreigner assets: treated as a charitable endowment

The summary states that financial rights located in the UAE belonging to a foreigner with no heirs are treated as a charitable waqf (endowment) under supervision of a competent authority to safeguard and manage the funds.

What to do now (expats + asset holders):

• Don’t leave inheritance outcomes to assumptions
• Consider formal estate planning appropriate to your situation (and emirate/free zone rules where relevant)

7) Assignment (hawala) + stronger protection of possession (including stopping new works)

The reforms introduce a new framework for hawala (assignment/transfer) and add rules related to assignment of rights. They also strengthen protection of possession, including an “action to stop new works” as a preventive measure to stop infringement before harm escalates.

What to update now (business + finance):

• Review assignment clauses, notices, and consent requirements
• If you factor receivables or transfer claims, tighten documentation and notifications
• Real estate/neighbor disputes: document early and act preventively where needed

8) Capacity and consent: more autonomy, more protection (including “exploitation”)

The reforms modernise autonomy and protection in contracts:

• Replace older concepts like “defective” and “suspended” contracts with voidable contract language
• Update defects of consent: mistake, fraud, duress lead to avoidance (annulment)
• Introduce a new defect: exploitation
• For a discerning minor’s “between benefit and detriment” financial dispositions: treat them as voidable for the minor’s benefit, with time limits for the guardian and the minor to seek annulment

What to update now (contracting practice):

• Add clearer capacity declarations
• Improve recordkeeping for negotiations and consent
• For vulnerable parties, ensure independent advice or witnessed explanations

9) Damages: broader compensation, more court power on agreed damages

Key changes described in the summary include:

• Broader scope for compensation remedies (not only impossibility or delay, but also partial/defective performance)
• Court authority to reduce agreed (liquidated) damages if excessive, partially performed, or where creditor fault contributed
• Creditor can claim more than agreed compensation where fraud or gross fault is proven
• Possibility of combining diya/arsh with additional compensation where harm exceeds those amounts

What to update now (risk + disputes):

• Recheck liquidated damages clauses for proportionality and evidence
• Improve project documentation to prove performance quality and causation

10) Sales: clearer rules (sample/model), stronger safeguards, and longer latent defect window

The reforms strengthen safeguards in sale contracts, including:

• Clearer regulation of sale by sample and sale by model
• Improved rules on latent defects and expanded buyer options
• Extending the “not heard” limitation period for latent defect claims from six months to one year from the day following receipt, unless a longer warranty is agreed
• Updated treatment of sales during death illness (removing a fixed one-year reference while keeping protective safeguards)
• Rules regulating sale of disputed rights, including prohibitions for certain roles (e.g., judges/prosecutors/court staff) and restrictions on lawyers purchasing rights they act on, with nullity consequences

What to update now (buyers + sellers):

• Sellers: revise warranty language, inspection rules, and conformity definitions
• Buyers: strengthen delivery inspection + evidence (photos, reports, written notices)
• Everyone: clarify whether a sale is “sample” or “model” and preserve the reference item/model documentation

11) Companies: clearer alignment, more flexibility, new models (non-profit + professional)

The reforms update company rules to align with commercial legislation, clarify civil vs commercial company classification, and:

• support continuity rules for withdrawal in open-ended companies
• introduce a framework for non-profit companies (profits reinvested into objectives)
• introduce a framework for professional companies, including rules on naming, partner restrictions, and liability
• regulate mudaraba as an independent nominated contract rather than a type of civil company

What to update now (corporate governance):

• Review MOA/partnership terms for withdrawal and continuity
• If you’re a professional firm: review ownership/partner restrictions and naming provisions
• If you’re a social enterprise: evaluate whether non-profit company structuring fits

12) Muqawala (works contracts): hardship/rebalancing + clearer termination outcomes

The reforms update works/contracting rules, including:

• contractor obligations when employer provides materials
• notification duties upon discovering defects or impediments
• clearer performance/rectification mechanisms
• a framework to address exceptional general circumstances (pandemics, unexpected price increases) that disrupt contractual equilibrium—allowing court-led rebalancing (time, price, or termination)
• rules on employer stopping execution before completion with compensation principles

What to update now (construction + projects):

• Add hardship thresholds and change-control steps
• Require rapid written notices during execution
• Keep detailed cost records to support any rebalancing or compensation claims

Quick checklist: what to update this week

If you’re a business

• Update templates: capacity, disclosures, framework agreement structure
• Review liquidated damages wording and evidence standards
• Tighten assignment clauses and notice mechanics

If you’re an individual/expat

• Re-check signing authority and financial autonomy for 18+ dependents
• Consider an estate plan that matches your assets and family situation

If you’re in real estate

• Confirm musataha registration status
• Update sale contract clauses: sample/model, inspection, defect remedies, timelines

Speak to a Dubai civil lawyer

Need a contract review or dispute strategy update for 2026?

Our Dubai team can review your agreements, property arrangements, and negotiation documents to align with the latest Civil Transactions Law changes. Call/WhatsApp +971547104042 or email info@amalkhamis.com