Federal Civil Transactions Law No. 25 of 2025 Effective June 2026

The Federal Civil Transactions Law No. 25 of 2025 will come into effect on June 1, 2026, after more than four decades of applying the previous legislative framework established in 1985. This significant legislative step aims to address legal duality and develop the civil legislative system in the United Arab Emirates, enhancing the protection of stakeholders and reinforcing the stability of transactions.

The new law strengthens eight main legislative axes, including: unifying legal references, developing capacity and protecting will, updating contractual provisions, protecting property and real rights, enhancing provisions for sales and real estate transactions, modernizing the legal framework for companies, developing contracting agreements and contractual balance, in addition to updating insurance and guarantee provisions.

A significant legislative shift

This update is consistent with the legislative development in its practical content, as it transformed the multiplicity of provisions and application paths in the previous law into a reorganized reference, marking a new legislative phase in organizing civil relations while maintaining the general structure, its divisions, and fundamental principles. However, it has redefined several rules that were established under the previous law and balanced between the legal text and judicial interpretation.

Achieving balance between rights and stability of transactions

The law is based on a modern balanced vision aimed at developing and organizing the general foundations of rights and obligations, simplifying and unifying references, and eliminating duplication with other legislations, which enhances the efficiency of application and establishes a comprehensive and easily applicable legal system.

Supporting competitiveness and enhancing legal certainty

Key legislative updates

The new law addresses a wide range of legal issues, most notably:

Lowering the age of majorityfrom 21 lunar years to 18 Gregorian years, in alignment with the majority of comparative legal systems and several national legislations such as juvenile and labor laws. The age of a minor who may request permission to manage their own finances has also been amended from 18 Hijri years to 15 Gregorian years, supporting entrepreneurship and early engagement in economic activities.

Pre-contractual negotiations: The law has introduced an advanced regulation for the stage of pre-contractual negotiations, mandating a duty to disclose essential information to ensure informed contractual decisions and reduce disputes before they arise.

Voidable contract: The law included provisions for the voidable contract, which is the subject of the provisions of both the invalid and suspended contracts, granting the minor with discernment the right to request annulment within specified periods.

Guarantee of hidden defects: The provisions regarding hidden defects have been developed and the buyer's options expanded to include retaining the sold item while claiming the reduction in price caused by the defect, and the period for hearing the guarantee claim has been extended from six months to a full year.

Contractual compensation: The court's authority to modify the amount of contractual compensation, either by reduction or increase, has been expanded to achieve justice and prevent unjust enrichment.

Combining blood money and compensation: The law recognized the possibility of combining blood money or compensation with additional compensation whenever death or injury results in material or moral damages not covered by blood money alone.

Non-profit and professional companies: The law established a legal framework for non-profit companies and a new organization for professional companies, along with reorganizing the provisions of the company contract, its termination, and liquidation.

Judicial assistant: The law introduced a system for a judicial assistant for a patient who needs assistance and is unable to express their will, granting the court the authority to appoint a judicial assistant to assist them in actions required for their interest.

The entry into force of the new Civil Transactions Law confirms the UAE's commitment to continuously updating its legislative framework, enhancing the rule of law, ensuring legal security for stakeholders, and supporting sustainable economic and social development goals. With the implementation of its provisions, the importance of understanding these fundamental amendments becomes evident to comprehend their effects on individuals, companies, and existing contracts.