Advertisement

Legal Challenges for Property Buyers Seeking to Invoke Force Majeure in Dubai
Business

Advertisement

Property buyers looking to exit off-plan agreements in Dubai by citing force majeure encounter significant legal challenges. Lawyers indicate that current regional tensions do not automatically fulfill the requirements set by UAE law.

Legal experts have confirmed that while force majeure is acknowledged under Dubai law, its application relies on strict legal and evidentiary standards, evaluated on a case-by-case basis by the courts.

Bassel Boutros, a Partner at BSA LAW, explained that for an event to qualify as force majeure, it must be exceptional, extraordinary, unforeseeable at the time of contract signing, and unavoidable. Additionally, there must be a direct causal relationship between the event and the inability or delay in fulfilling contractual obligations.

He further stated that a party cannot claim force majeure if the delay or failure to perform was due to its own fault, especially if it was already in breach before the event occurred.

“The burden of proof falls on the party invoking force majeure,” Boutros noted, emphasizing that the party must demonstrate that the failure to perform was directly caused by the event, rather than by previous breaches or unrelated circumstances.

Boutros mentioned that Dubai courts have considerable discretion in determining whether an event qualifies as force majeure, based on the evidence provided in each case.

He also pointed out that certain events can be officially classified as exceptional circumstances through legislation or regulatory actions. For instance, during the Covid-19 pandemic, Cabinet Resolution No. 5 of 2021 declared the pandemic an “emergency financial crisis” for a specified period.

However, he remarked that invoking force majeure concerning off-plan sale agreements is not viable under the current conditions.

“Normal life in the UAE proceeds without disruption, and there are no significant adverse effects on the real estate market,” he stated. “The market continues to be governed by fundamental principles of supply and demand and is functioning consistently with its prior conditions.”

Boutros added that while some parties might attempt to leverage prevailing circumstances to evade contractual obligations, such actions do not meet the legal criteria for force majeure.

“In our view, the necessary conditions for invoking force majeure are not fulfilled, and thus, there is no legitimate basis for terminating off-plan sale agreements by either party,” Boutros concluded.

Inquiries

Andrew Thomson, partner and head of real estate at Al Tamimi & Co., confirmed that force majeure is a recognized concept under UAE law and is included in property contracts, but successfully invoking it is challenging.

“A party wishing to rely on force majeure must prove that the event was genuinely unforeseeable, beyond their control, and made contract performance impossible—not simply more difficult or financially inconvenient,” Thomson stated.

He explained that buyers sometimes look to force majeure clauses as potential escape routes during uncertain times, yet regional tensions alone do not automatically satisfy the legal requirements.

“Courts and arbitration tribunals in Dubai closely scrutinize these claims, and the specific wording of each contract is crucial,” he added.

Thomson noted that law firms are receiving an increasing number of inquiries from clients wanting to understand their legal options.

“Our consistent advice is to review your contract carefully before taking any action,” he advised. “What may appear to be a force majeure clause could come with significant conditions and limitations.”

He also emphasized that seeking early legal counsel is the most prudent course of action, warning that premature steps can sometimes lead to more issues than they resolve.

ALSO READ

  • Dubai real estate stands firm as 85% of landlords resist selling

  • Dubai real estate steadies as fundamentals stay strong

  • Dubai property buyers take a more 'measured approach' as market holds steady

Advertisement

line Recommend Recommend
Suzuki Swift Production Halt Linked to China's Rare Earth Export Restrictions
Suzuki Swift Production Halt Linked to China's Rare Earth Export Restrictions
In a move highlighting the growing impact of global supply chain disruptions, Suzuki Motor has temporarily suspended production of its popular Swift subcompact due to China's tightening rare earth export policies. Industry insiders reveal this marks the first major Japanese automaker affected by Beijing's recent trade measures.
UAE Drivers Alert: Major Road Closures This Sunday - Plan Your Route Now!
UAE Drivers Alert: Major Road Closures This Sunday - Plan Your Route Now!
Attention all UAE motorists! The Roads and Transport Authority (RTA) has issued an important travel advisory for this Sunday, June 15, as essential maintenance works will temporarily disrupt traffic flow on two key highways. Commuters heading towards Sharjah and using Sheikh Mohammed bin Zayed Road should prepare for possible delays.
Surge in Demand for Hybrid and Electric Vehicles in the UAE Amid Rising Fuel Prices
Surge in Demand for Hybrid and Electric Vehicles in the UAE Amid Rising Fuel Prices
Lexus’ UAE dealer, Al Futtaim, reported a similar trend, with increasing demand for hybrids in recent months. “Overall, demand is evolving steadily, indicating a longer-term shift in how customers assess their mobility options, further reinforced by the current market dynamics,” said Jacques Brent, Managing Director of Al-Futtaim Lexus UAE.
The Challenge of Transitioning from Fossil Fuels: Insights Post-COP28
The Challenge of Transitioning from Fossil Fuels: Insights Post-COP28
Hare noted that renewable energy has also led to reduced electricity bills in certain regions of the United States and Australia.
Amazon Acquires Globalstar to Enhance Satellite Internet Network
Amazon Acquires Globalstar to Enhance Satellite Internet Network
Amazon announced on Tuesday that it has reached an agreement to purchase the US telecommunications satellite company Globalstar, aiming to expand its space-based internet infrastructure and compete with Elon Musk's Starlink.
Nicole Kidman to Headline Thrilling Equestrian Mystery Series Based on Bestselling Novel
Nicole Kidman to Headline Thrilling Equestrian Mystery Series Based on Bestselling Novel
Academy Award winner Nicole Kidman is set to dazzle audiences once again as she takes on both starring and executive producing roles in an exciting new television adaptation of Eliza Jane Brazier's gripping novel Girls and Their Horses. This marks another high-profile book-to-screen project for the talented actress following her successes with Big Little Lies and Nine Perfect Strangers. The series, currently in development, will transport viewers to the picturesque yet deceptive world of Rancho
How to Start a Freelance Business in Dubai, UAE?
How to Start a Freelance Business in Dubai, UAE?
By understanding these steps and requirements, freelancers can confidently launch their business in Dubai, enjoy global opportunities, and build a sustainable career with legal and professional support.
India Tightens Overseas Remittance Rules to Curb Passive Wealth Shifting
India Tightens Overseas Remittance Rules to Curb Passive Wealth Shifting
India's central bank is set to introduce stricter controls on foreign remittances by resident Indians, including a ban on holding fixed-term foreign currency deposits abroad, according to two government officials familiar with the matter. The Reserve Bank of India (RBI) will revise existing regulations to close loopholes that currently allow individuals to transfer money overseas for parking in time deposits or interest-bearing accounts, one official revealed. "This practice essentially enables
Why the red carpet has fallen in love with vintage fashion
Why the red carpet has fallen in love with vintage fashion
“This old thing? I’ve had it forever.” Never has the faux humble compliment bat-back been more frequently bandied about. Even now, at the peak of the January sales, on the cusp of pre-Ramadan shopping sprees, and with new season collections filtering into luxury boutiques, buying new feels at best 2012, and at worst 2023. Fashion fatigue has been filtering its way into the mainstream for years. Uncomfortable truths about landfill, luxury leathergoods prices soaring beyond their desirability, mindless consumption being eaten up by the experience economy; is 2026 the year we finally get the fashion—fast or otherwise—ick?
UAE Airlines Expand Global Connectivity Amid Ceasefire
UAE Airlines Expand Global Connectivity Amid Ceasefire
Europe: