UAE Commercial Contracts: 7 Things Businesses Should Check Before Signing

Commercial contracts play an important role in the day-to-day operations of businesses across the UAE. Whether an agreement involves a supplier, client, distributor or business partner, clearly defined terms can help prevent misunderstandings and reduce the risk of disputes.

For businesses operating in Dubai and other emirates, reviewing an agreement before signing is particularly important when financial commitments, delivery obligations or long-term commercial relationships are involved.

The UAE's updated Civil Transactions Law, which took effect on 1 June 2026, is also an important development for businesses reviewing their contractual arrangements. The legislation updates aspects of the legal framework governing civil transactions and contractual relationships.

Here are seven important areas businesses should consider before entering into a commercial agreement.

1. Clearly define the scope of work

Every commercial contract should explain what each party is expected to deliver. Vague descriptions of services, products or project responsibilities can create disagreements later.

Businesses should ensure the agreement identifies the deliverables, deadlines, quality standards and responsibilities of each party. Where services are provided in stages, the contract should also explain how each stage will be completed and accepted.

2. Review payment terms carefully

Payment provisions should specify the agreed amount, currency, payment deadlines, invoicing requirements and any applicable taxes or additional charges.

For projects involving instalments or milestone payments, the agreement should explain when each payment becomes due and what evidence is required to confirm completion.

Businesses should also understand the contractual consequences of late payment and any agreed procedures for resolving disputed invoices.

3. Understand liability and indemnity clauses

Liability provisions can determine how financial responsibility is allocated when something goes wrong.

Before signing, businesses should review any limitations on liability, indemnities, exclusions and obligations to compensate the other party for particular losses.

These provisions should be considered in the context of the transaction, applicable law and the risks associated with the agreement. Businesses should not assume that every limitation or exclusion will necessarily be enforceable.

4. Check termination rights

A contract should explain the circumstances in which either party can terminate the agreement.

Important points include the notice period, permitted grounds for termination, any opportunity to remedy a breach and the obligations that remain after termination.

For ongoing commercial relationships, businesses should also consider what happens to outstanding invoices, unfinished work, confidential information and materials belonging to either party.

5. Consider unexpected disruptions

Events outside a company's control can affect supply chains, project schedules and contractual performance.

Businesses should review any force majeure clause, including the events covered, notification deadlines, evidence requirements and the steps required to reduce the effects of disruption.

Dubai's Department of Economy and Tourism has published guidance on force majeure under the updated UAE legal framework, including the importance of distinguishing genuine impossibility from circumstances that simply make performance more difficult or expensive. <Cite refs={["turn199831search1"]}/>

6. Understand how disputes will be resolved

Commercial agreements should identify the applicable governing law and the mechanism for resolving disputes.

Depending on the transaction, the parties may consider court proceedings, mediation or arbitration. The contract should clearly establish the agreed process and any relevant jurisdiction or arbitration arrangements.

Businesses should also consider the practical implications of the chosen process, including costs, location and language.

7. Review the entire agreement before signing

A final review should cover all contractual documents, including schedules, appendices, amendments and incorporated terms.

Businesses should check that the parties' legal names are correct, that the signatories have appropriate authority and that no important commercial promises have been left outside the written agreement.

Where the transaction involves substantial financial commitments or complex obligations, obtaining a professional review before signing may help identify issues that are not immediately apparent.

Why contract reviews matter for UAE businesses

A well-drafted agreement provides a clearer framework for managing commercial relationships. It helps parties understand their obligations, allocate risks and establish procedures for handling disagreements.

However, the appropriate terms will depend on the nature of the transaction, the parties involved and the laws applicable to the agreement. Standard templates may not address every relevant issue.

Businesses seeking assistance with contractual matters can explore HHS Lawyers for information about legal services and potential support with their business-related legal requirements.

Final considerations

Before signing a commercial contract in the UAE, businesses should take time to review the scope of work, payment arrangements, liability provisions, termination rights and dispute resolution procedures.

The updated legal framework makes it particularly worthwhile to ensure that existing templates and new agreements have been reviewed for their suitability under applicable law.

Taking a careful approach at the outset can help businesses establish clearer expectations and manage contractual risks more effectively.

Disclaimer: This article provides general information and is not a substitute for legal advice. Businesses should obtain advice tailored to their specific circumstances before making legal or contractual decisions.