Force Majeure in UAE Law: Article 273 Explained for Business Owners

When extraordinary circumstances disrupt your ability to fulfil contractual obligations, UAE law provides a framework for relief through force majeure. For business owners operating in the UAE, understanding this framework is essential — both for protecting your own interests and for responding when a counterparty invokes it against you.

What Is Force Majeure Under UAE Law?

Force majeure (“القوة القاهرة”) under UAE law refers to an extraordinary event that is unforeseeable, unavoidable, and beyond the control of the contracting parties, making performance of a contractual obligation impossible — not merely difficult or more expensive.

The primary statutory basis is Article 273 of the UAE Civil Transactions Law (Federal Law No. 5 of 1985), which provides that where a force majeure event renders performance of a contractual obligation impossible, the corresponding obligation is extinguished and the contract is automatically rescinded by operation of law.

This is a critical distinction: Article 273 applies when performance becomes impossible, not simply burdensome or unprofitable.

Article 249: Hardship vs Force Majeure

Many business situations fall short of impossibility but still cause severe hardship. Article 249 of the same law addresses this — the “exceptional circumstances” or hardship provision. Where performance remains possible but has become excessively onerous due to exceptional, unforeseeable events, the court may adjust the obligations to a reasonable level, balancing the interests of both parties.

The distinction matters in practice: if you can still perform but at significantly higher cost or difficulty, Article 249 (hardship) is the more appropriate framework. If performance is genuinely impossible, Article 273 (force majeure) applies and the obligation is extinguished entirely.

The New Civil Transactions Law (June 2026)

The UAE has enacted Federal Decree-Law No. 25 of 2025, a comprehensive update to the Civil Transactions Law that enters force on 1 June 2026. The new law maintains the same approach to force majeure and hardship, now codified under Articles 236 and 249 respectively. Business owners should be aware that while the underlying principles remain consistent, the new law refines certain procedural aspects and provides greater clarity on the interplay between contractual force majeure clauses and statutory provisions.

Requirements for Invoking Force Majeure

To successfully invoke force majeure under UAE law, the party claiming relief must establish:

1. Impossibility of performance — The event must render performance genuinely impossible, not merely more expensive or inconvenient.
2. Unforeseeability — The event could not have been reasonably anticipated at the time the contract was formed.
3. Unavoidability — The event and its consequences could not have been prevented or avoided despite reasonable efforts.
4. Causal link — There must be a direct, demonstrable connection between the event and the inability to perform the specific contractual obligations in question.
5. Mitigation — The party must demonstrate that they took reasonable steps to minimise the impact of the event on their contractual obligations.

Notice Obligations

While the UAE Civil Transactions Law does not prescribe a specific notice period for invoking force majeure, prompt notification is both a practical necessity and a legal expectation. Many commercial contracts include express notice requirements — specifying the form, timing, and recipient of force majeure notifications. Failure to comply with contractual notice provisions can undermine or waive the right to claim force majeure relief.

Best practice is to issue a formal written notice as soon as the force majeure event occurs or becomes apparent. The notice should identify the contract, describe the circumstances, specify which obligations are affected, detail mitigation steps taken, and propose a resolution. It should be delivered to the contractually specified address or, if none is specified, to the counterparty's registered address.

Burden of Proof

The burden of proof lies squarely with the party invoking force majeure. UAE courts adopt a case-by-case approach, examining the specific facts and the contract terms carefully. The invoking party must produce evidence demonstrating all of the above requirements — impossibility, unforeseeability, unavoidability, causal link, and mitigation efforts. Mere assertions are insufficient.

DIFC and ADGM: A Different Framework

Businesses operating in or contracting under the jurisdiction of the Dubai International Financial Centre (DIFC) or the Abu Dhabi Global Market (ADGM) should note that these free zones operate under common law frameworks, not the UAE Civil Transactions Law. Force majeure in these jurisdictions follows English common law principles, where force majeure is a purely contractual concept — there is no implied statutory right. If your contract governed by DIFC or ADGM law does not include a force majeure clause, you cannot invoke one. Instead, you would need to rely on the common law doctrine of frustration, which has a significantly higher threshold.

This distinction is critical for businesses with contracts across multiple UAE jurisdictions. Always verify which governing law applies to your specific contract.

Practical Recommendations for UAE Businesses

• Review your contracts to understand existing force majeure clauses and notice requirements
• Document everything — keep detailed records of the disruption, its impact, and your mitigation efforts
• Act promptly — delayed notice can weaken your position
• Seek legal counsel before issuing a formal force majeure notice, especially for high-value contracts
• Consider whether Article 249 (hardship) might be more appropriate than Article 273 (impossibility)