Part of our series on the new UAE Civil Transactions Law (Federal Decree-Law No. 25 of 2025), in force since 1 June 2026.
The notion at stake is hardship (referred to in the law by the doctrine of exceptional circumstances). It covers the situation where an exceptional, unforeseeable event beyond the parties’ control does not make performance impossible — which would fall under force majeure — but makes it excessively onerous for one of them. The contract remains performable, but its economic balance is destroyed.
A long refusal, then a reversal
French law long refused any judicial revision in the name of the binding force of the contract: this was the famous Canal de Craponne case of 1876, which held until the 2016 reform introduced article 1195 of the Civil Code, finally allowing renegotiation and then, failing that, revision or termination by the judge.
A palette of measures
Emirati law already knew a comparable mechanism, but its practical scope remained debated. The new law takes a decisive step by expressly equipping the judge with a palette of measures to restore the contractual balance: extension of time, adjustment of the consideration, or termination of the contract.
For construction and real-estate development contracts, where long cycles structurally expose the parties to economic shocks, this clarification is a major advance. It also calls for a contractual response: hardship, price-revision and indexation clauses must be drafted all the more carefully now that the judge has an explicit power of intervention. Better to organise the rebalancing yourself than to leave it entirely to the court.
This is work Prosilame handles: drafting an enforceable hardship clause.
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This article is general information and does not constitute legal advice. Each situation calls for its own analysis.