UAE Civil Transactions Law

Article 340

Book One: Obligations · Section Two: Effects of the Obligation · Chapter Two: Means of Performance · Part Three: Compulsory Performance · Second: Performance by Way of Compensation

1. The contracting parties may pre-determine the amount of compensation by stipulating it in the contract or in a subsequent agreement, subject to the provisions of the law. 2. The court may reduce the amount of agreed compensation if the debtor proves that the assessment was excessive or that the original obligation has been partially performed. 3. The court may reduce the amount of the agreed compensation if the creditor contributed by their own fault to the occurrence of or increase in the damage, or may refrain from awarding compensation if the creditor’s fault predominates over the debtor’s fault. 4. The creditor may claim an amount exceeding the agreed compensation if they prove that the debtor has committed fraud or gross fault. 5. Any agreement contrary to the provisions of this Article shall be void.

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