Justiceface
Justiceface
Jun 23, 2026
United arab emirates

UAE Updates Construction Laws Under New Civil Code

On June 23, 2026, the United Arab Emirates (UAE) implemented significant changes to its construction laws with the enactment of Federal Decree-Law No. 25 of 2025, known as the Civil Transactions Law. This new legislation, effective from June 1, 2026, introduces key reforms aimed at enhancing clarity and reducing disputes in the construction sector.

Key Changes in Construction Contracts

The Civil Transactions Law brings several notable changes to construction contracts, including:

  • Contractor Notice Requirements: Contractors are now obligated to immediately notify employers of any events that may impede proper execution of the contract. Failure to provide such notice may result in the contractor bearing the consequences of any resulting issues.
  • Remedies for Defective Work: The law clarifies the remedies available for defective work, outlining the responsibilities of contractors to rectify issues and the rights of employers to seek compensation or contract termination in cases of significant defects.
  • Liquidated Damages and Liability: Provisions regarding liquidated damages have been refined to ensure fair compensation for delays or breaches, while also addressing the scope of decennial liability, holding contractors accountable for structural defects for a period of ten years.

Implications for the Construction Industry

These reforms are expected to have a profound impact on the construction industry in the UAE. Contractors and employers must adapt to the new requirements by revising existing contracts and ensuring compliance with the updated legal framework. The emphasis on clear notice obligations and defined remedies aims to reduce disputes and promote a more transparent and efficient construction sector.

Legal experts advise stakeholders in the construction industry to seek professional guidance to fully understand the implications of the new law and to implement necessary changes to their contractual practices.

Conclusion

The introduction of the Civil Transactions Law represents a significant step forward in modernizing the UAE's legal landscape, particularly in the construction sector. By addressing key areas of contract formation, execution, and liability, the law aims to foster a more stable and predictable environment for construction projects across the country.