Federal Decree by Law No. (25) of 2025 Promulgating the Civil Transactions Law

Purpose and legislative background

The 2025 code modernises the UAE's foundational civil-law framework and replaces the 1985 Civil Transactions Law after four decades of legal and economic development.

The new law entered into force on 1 June 2026. No subsequent amendment was identified in the official source reviewed on 31 August 2026.

Scope and who it applies to

• Individuals and companies entering civil transactions within the law's scope.
• Parties to contracts and non-contractual obligations.
• Owners, possessors and holders of real rights.
• Creditors and debtors using security rights.
• Courts and legal practitioners applying UAE civil-law principles.

Key definitions

• The code contains extensive civil-law terminology. Meaning must be derived from the definitions/general provisions and the specific book governing the transaction.
• The distinction between civil and commercial transactions remains important because specialised legislation may displace general civil rules.

Main rights and obligations

• Contracting parties must perform obligations in accordance with the code and any specialised law governing the transaction.
• Rights to damages, termination, rescission, performance, set-off or other remedies depend on the specific statutory conditions.
• Property owners and holders of real/security rights must comply with registration and other formalities where required.

Procedures and compliance

• Classify the legal relationship: civil, commercial, property, security, family or another specialised field.
• Identify the relevant book/chapter and any special legislation that supersedes the general code.
• For contracts, check formation, validity, authority/capacity, performance, breach and remedy provisions.
• For cross-border matters, analyse governing law and jurisdiction before applying the substantive article.

Deadlines and time limits

• Effective date: 1 June 2026.
• Limitation/prescription periods vary by claim and chapter; the exact new-code article must be checked.
• Transition questions for rights or events predating 1 June 2026 require specific analysis rather than a blanket rule.

Enforcement, violations and penalties

['The Civil Transactions Law principally governs private-law rights, obligations and remedies. Court procedure and enforcement are governed by the Civil Procedure Code and other relevant legislation. Criminal penalties are not the organising feature of this code.']

Source distinction: A penalty or enforcement measure stated as part of the legislation must be checked against the enacted article. Administrative details may be supplied by Cabinet, ministry, regulator or judicial-authority instruments. The practical commentary here is not a substitute for those instruments.

Practical scenarios

1. A contract signed before 1 June 2026 but disputed afterwards requires a transition and governing-law analysis before choosing the old or new civil-code provision.
2. A buyer seeking cancellation and damages should identify the named-contract provisions and the general law of obligations rather than relying on a single general article.
3. A company with a foreign-law clause should assess Article 19 and UAE conflict/public-order rules before assuming the clause resolves every issue.
4. A secured creditor should review Book Four together with any specialised registration or movable-security legislation.

Amendments and related legislation

The new law entered into force on 1 June 2026. No subsequent amendment was identified in the official source reviewed on 31 August 2026.

Related legislation and official guidance listed in the manifest and research notes should be checked together with the principal law, especially where the principal law delegates detail to an executive regulation, Cabinet resolution, regulator rule or judicial guide.

What businesses and individuals should check

• The new code has been in force only since 1 June 2026; precedents and contracts referring to the 1985 code should be checked for transition issues.
• Commercial transactions may also be governed by specialised commercial legislation; classify the transaction before relying only on the Civil Transactions Law.
• For cross-border matters, governing-law and UAE public-order rules must be analysed before applying a foreign-law clause.
• Because the attached code is very large, this package provides a structured English rendering and navigation map, while the official Arabic text remains the authoritative source.
• Confirm that the version of the law and implementing instruments being used is current on the date of the transaction or dispute.
• Keep a copy or citation of the official source used for any compliance decision.
• Do not rely on the cover artwork as evidence of official publication or government endorsement.

When legal advice may be useful

Professional interpretation may be useful where the applicable legal regime is disputed, a licence or regulatory perimeter is unclear, a transitional rule affects an existing right or contract, a penalty or enforcement action is possible, or facts span multiple Emirates, free zones or foreign jurisdictions.

Information status

This explanation was researched and checked on 2026-08-31. It provides general legal information and should be re-verified against the official source for any later amendment or implementing decision.