In a landmark legislative move, the UAE government has issued a federal decree-law enacting the new Civil Transactions Law, marking a pivotal step in the ongoing modernization of the country’s legal framework. The new law represents a qualitative transformation in the regulation of civil relations, offering a contemporary and balanced vision that reinforces legal certainty and ease of application.

The law forms part of a broader national strategy aimed at updating legislation, simplifying legal rules, unifying references, and eliminating overlap with modern special laws. This approach enhances judicial efficiency, reduces procedural complexity, and establishes a more coherent legislative system that supports the rule of law and sustainable development.

One of the most notable features of the new law is the expanded scope of judicial discretion, allowing judges to rely on the principles of Islamic Sharia in the absence of explicit statutory provisions, without adherence to a specific school of jurisprudence. This flexibility empowers the judiciary to deliver justice in line with societal developments and modern transactional challenges. The law also confirms the application of Sharia principles in matters relating to persons of unknown parentage, missing persons, and absentees where no specific legislation exists.

Legislative Integration and Local Authority

The revised provisions ensure legislative integration between general rules and special regulations, while respecting the regulatory powers of local authorities in each emirate. Local legislation continues to apply within its jurisdiction, maintaining federal unity without compromising legislative coherence.

Strengthening Legal Capacity and Youth Empowerment

The law introduces fundamental reforms to legal capacity, most notably reducing the age of majority to 18 Gregorian years, aligning with international legal standards and ensuring consistency with UAE labor and juvenile laws. It also lowers the age at which minors may seek permission to manage their assets to 15 years, supporting entrepreneurship and early economic participation.

Modern Contractual Framework

The new law enhances the protection of free will in contracts, stipulating that defects of consent result in nullification rather than rescission, and introduces exploitation as a new defect of consent. It also establishes an advanced framework governing pre-contractual negotiations, imposing disclosure obligations that promote transparency and reduce disputes.

Comprehensive Updates to Sales, Companies, and Contracting

The legislation modernizes rules governing sale contracts, hidden defects, sample and model sales, and disputed rights transactions, safeguarding judicial integrity. It also restructures company law provisions, permits single-person company formation, and introduces legal frameworks for non-profit and professional companies, enhancing business flexibility and stability.

Overall, the new UAE Civil Transactions Law reflects a forward-looking legislative philosophy that balances legal tradition with contemporary realities, strengthens trust in the legal system, and reinforces the country’s position as a secure and attractive legal and economic environment.