When contracts begin to strain, force majeure is often the first clause parties turn to.
In the UAE, force majeure is not a broad safety net. It does not apply simply because circumstances have changed or performance has become harder. The law sets a high bar, and in real estate, that bar is rarely met.
Understanding where that threshold sits is essential, particularly in a market where timelines, payments, and delivery obligations are tightly defined.
It Starts with a Simple Question: Is Performance Still Possible?
The legal position is anchored in Article 273 of the UAE Civil Code.
The principle is straightforward:
If performance becomes impossible, the obligation may fall away.
If it is still possible, even if difficult, delayed, or financially burdensome, the contract remains in force.
This is where most assumptions break down.
- A project running behind schedule is not enough
- Increased costs or disrupted supply chains are not enough
- Reduced commercial viability is not enough
The test is not whether performance is affected. It is whether it can still happen at all.
What Courts Actually Look For
UAE courts tend to assess force majeure through a practical lens, not a theoretical one.
Three elements consistently matter:
- Control – Was the event outside the party’s control?
- Predictability – Could it reasonably have been anticipated?
- Impact – Did it make performance objectively impossible?
Still, a direct connection between cause and effect is required even if the external factor is present. In case there is a possibility of completing the work by some other way, the case for non-performance loses its force dramatically.
It is for this reason that a lot of force majeure claims get rejected, not the lack of a necessary disruption, but not meeting the legal criterion.
The Often-Missed Distinction: Impossibility vs Pressure
Not every difficult situation qualifies as force majeure.
The law recognises a separate concept, exceptional circumstances under Article 249, which applies where performance becomes excessively burdensome but not impossible.
The difference is practical:
- Force majeure may bring the contract to an end
- Exceptional circumstances allow the court to adjust obligations to restore balance
In real estate, most disputes fall into the second category.
Projects slow down, costs increase and market conditions shift.
But the contract in most cases, can still be performed.
How This Plays Out on the Ground
Construction and Development
Delays are often attributed to external factors, labour shortages, material disruptions, and regulatory changes.
In some cases, these may qualify. But only where the delay directly prevents completion within the agreed framework.
A general slowdown is not enough. The cause must be specific, and the impact must be unavoidable.
Lease Agreements
Tenants sometimes look to force majeure to justify non-payment or reduced rent.
Courts do not usually agree with this point of view. Where payment issues are concerned, it is a completely different story. The default position is that rent must be paid, even if things get tough, unless the contract specifically says otherwise.
Off-Plan Transactions
When schedules get changed, buyers and developers quite often invoke force majeure clauses.
Here, the contract becomes critical.
- Does the clause clearly define qualifying events?
- Does it allow extensions, suspension, or termination?
- Are there notice requirements or procedural steps?
Non-compliance is a fundamental issue with the force majeure argument. Without strict compliance, it is very difficult to sustain an invocation of force majeure.
Why the Contract Carries More Weight Than the Label
Actually, in many cases, it is the precise wording of the contract that matters even more than the legal notion of the case.
To some extent, force majeure isn’t always automatically understood in a broad sense. It mainly depends on the drafting style of the clause.
Two contracts facing the same event can lead to entirely different outcomes depending on:
- The events listed
- The obligations excluded
- The remedies allowed
This is where risk is either controlled or unintentionally exposed.
Where Most Parties Get It Wrong
Force majeure is often misunderstood in quite predictable ways:
- Treating disruption as automatic justification
- Ignoring the requirement of actual impossibility
- Overlooking the need for a direct causal link
- Failing to follow contractual notice and documentation requirements
Usually, when these problems come to light, the conversation has shifted from bargaining to disagreement.
A More Grounded Approach
Rather than assuming force majeure will apply, it is more effective to assess the situation with precision:
- Can the obligation still be performed, even with delay or adjustment?
- Does the contract provide flexibility before termination becomes relevant?
- Is there a stronger case under exceptional circumstances instead?
In many cases, the solution lies in structuring the response correctly, not in relying on a clause that may not apply.
The Risk of Assuming Protection
Force majeure in the UAE is not designed to absorb commercial pressure. It is reserved for situations where performance has genuinely become impossible.
In real estate, those situations are limited.
The real risk is not the absence of protection, but the assumption that it exists when it does not.
And that distinction often becomes clear only when the contract is tested.
If your contract is already under pressure, this is not the time to assume protection. Speak to Klay Legal Consultants and understand exactly where you stand before your options narrow.
