UAE Civil Transactions Law

Article 121

Book One: Obligations · Section One: Sources of Obligation · Chapter One: The Contract · Part Three: Negotiations and the Obligation of Disclosure

1. The initiation of pre-contractual negotiations, their conduct, and their termination shall be in accordance with the requirements of good faith. 2. If negotiations are conducted, they do not create an obligation on the parties to conclude this contract. 3. Whoever negotiates or terminates negotiations in bad faith shall be liable to compensate the actual damage suffered by the other party. Compensation shall not include the expected benefits from the contract that was not concluded, or the lost opportunities in achieving such benefits, unless otherwise agreed. 4. Bad faith shall be deemed to include the deliberate failure to disclose material information that has a substantive effect on the validity of the contract.

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