UAE Enacts New Civil Transactions Law
The United Arab Emirates has enacted Federal Decree-Law No. 25 of 2025, known as the Civil Transactions Law, which came into effect on June 1, 2026. This comprehensive legislation replaces the previous civil code established in 1985 and introduces significant reforms aimed at modernizing the country's legal framework.
Key Provisions of the New Law
One of the most notable changes is the reduction of the legal age of majority from 21 lunar years to 18 Gregorian years. This adjustment aligns the UAE's legal standards with international norms and grants individuals aged 18 and above full legal capacity. Consequently, they can now independently engage in various legal activities, including signing contracts, managing assets, and initiating legal proceedings without the need for parental or guardian consent.
The law also enhances judicial discretion by allowing courts to refer to principles of Islamic Sharia in cases where no specific legislative provision exists. Judges are empowered to select solutions that best achieve justice and public interest, without being bound to a particular school of Islamic jurisprudence. This flexibility aims to ensure that judicial decisions are more adaptable to the nuances of individual cases.
Implications for Residents and Businesses
For residents, the reduction in the age of majority means that young adults can now fully participate in economic and legal activities at an earlier age. This change is expected to encourage greater youth involvement in entrepreneurship and other sectors, fostering a more dynamic economy.
Businesses operating in the UAE should review and potentially revise existing contracts and policies to comply with the new legal standards. The emphasis on good faith in contractual negotiations and the requirement for clear disclosure of fundamental information necessitate a thorough understanding of the updated legal obligations.
Conclusion
The enactment of the Civil Transactions Law marks a significant milestone in the UAE's legal evolution. By modernizing its civil code, the UAE aims to enhance legal clarity, promote fairness in civil transactions, and align its legal system with international best practices. Residents and businesses are encouraged to familiarize themselves with the new provisions to ensure compliance and to fully benefit from the opportunities presented by this legislative reform.
