Anfal El Siddig | Published at April 12, 2026

In light of the rapid changes currently impacting the economic landscape, institutions, companies, and even individuals are facing a real challenge: how to comply with the terms of real estate contracts that were drafted under entirely different economic and temporal conditions.

At the core of this issue lies a well-established legal principle “the contract is the law of the parties” which serves as a fundamental pillar for the stability of transactions and the protection of rights. Accordingly, contractual obligations remain binding and enforceable unless a legal ground arises to justify otherwise.

Although the UAE legislator has recognized the theory of exceptional circumstances as an extraordinary mechanism to restore balance to obligations that have become excessively onerous, it is essential to emphasize that the remains the enforceability of the contract. This doctrine is not intended as a means to evade obligations or escape contractual liability merely due to market fluctuations.

Invoking exceptional circumstances requires a rigorous judicial assessment. It must be demonstrated that the event in question is extraordinary, general in nature, and unforeseeable, and that its impact exceeds the normal commercial risks that any investor or contracting party is expected to bear.

The application of these legal principles is far from automatic. UAE courts approach such claims with considerable caution in order to preserve legal certainty and the stability of contractual relationships. Distinguishing between ordinary commercial loss and substantial hardship warranting judicial intervention is a nuanced process, requiring a case-by-case legal analysis.

In this context, the importance of carefully reviewing contractual provisions cannot be overstated. Contracts remain the primary and governing reference point in any dispute. Many agreements include explicit risk allocation clauses, which may significantly limit the ability to rely on the doctrine of exceptional circumstances at a later stage.

In conclusion, legal solutions to current challenges are diverse and extend well beyond contract termination. They include negotiated and technical approaches that aim to safeguard the strategic interests of all parties while avoiding adversarial litigation. However, selecting the optimal path depends fundamentally on a precise legal reading of contractual terms and related arrangements.

Accordingly, reviewing your contracts with professional rigor is not merely a precautionary step it is a cornerstone of any effective legal strategy aimed at navigating crises with fairness, while upholding the sanctity of contractual commitments.

At TAJ Legal Consultants, we support our clients in navigating these challenges with balanced, commercially sound legal strategies.

📩 If your business is affected by current market conditions, now is the time to reassess your contracts with a legal expert.