UAE Civil Transactions Law — articles 601–700

The expenses of the loan and its repayment shall be borne by the borrower, unless otherwise agreed.

The provisions set out in this Chapter shall not prejudice the provisions of any special laws.

1. A company is a contract whereby two or more persons undertake to contribute to an enterprise by each providing a contribution of property or service, for the purpose of investing in that enterprise and sharing in any …

The company contract shall be in writing. The absence of writing shall not affect the rights of third parties, but as between the partners themselves, the contract shall be deemed valid, unless one of them requests that …

A company shall acquire legal personality upon its formation. Such legal personality may not be relied upon against a third party except after completion of the procedures prescribed by law. However, third parties may re…

1. A company shall be civil if its activity is non-commercial. 2. A company shall be commercial if its activity is commercial, or if it adopts one of the forms of commercial companies, even if its activity is non-commerc…

1. The capital of the company shall consist of cash contributions and in-kind contributions of assessed value. The contribution of a partner to the capital of the company may also be in the form of services. 2. The partn…

1. If the contribution of a partner in the company consists of a right of ownership, a right of usufruct, or any other real right (jus in rem), the provisions governing sale shall apply to the warranty of such contributi…

1. Every company shall have a financial year to be determined in the company contract, provided that the first financial year of the company shall not exceed eighteen (18) months and shall not be less than six (6) months…

1. Profits and losses shall be distributed in the manner set out in the company's contract. 2. If the company's contract does not specify the share of each partner in the profits and losses, they shall be distributed in …

If the partners agree in the contract that one of them shall receive a fixed sum of the profit, such condition shall be void, and the profit shall be distributed in proportion to each partner’s share in the capital.

If it is agreed in the contract that one of the partners shall not benefit from the company's profits or shall not contribute to its losses, the company contract shall be void.

1. If neither the law nor the company contract contains a specific provision on the method of management, each partner shall be deemed authorized by the others to manage the company and may carry out acts of management a…

1. The partners may appoint, from among them or from third parties, a person to manage the company and act on their behalf under the company contract or under a separate contract, with or without remuneration. 2. The man…

1. There may be multiple managers for the company, and the powers of each shall be determined in the company contract, a separate contract, or any subsequent agreement. Each manager shall be bound by the powers conferred…

If a decision is required to be taken by majority, the majority shall be calculated on the basis of the value of the partners’ shares, unless the law or the agreement provides otherwise.

1. Partners who are not managers are prohibited from participating in management. 2. Partners who are not managers have the right to request a report on the acts of management and acts of disposition, and to personally i…

A person appointed to manage the company or delegated with its management may not resign from management at a time where such resignation would cause harm to the company.

The partner entrusted with the pursuit of the interests of the company shall refrain from any act that would cause damage to the company or contravene the purpose for which it was established, and shall, in pursuit of th…

A partner may not appropriate to themselves any of the company's property. If they do so, they shall be liable for any damage that results therefrom.

1. If a partner has personal creditors, they may not, during the existence of the company, claim their rights from the partner's share in the company's assets, but may claim them from that partner’s share in the profits.…

A company shall be dissolved upon the expiry of its specified term or the completion of the work for which it was formed. The partners may extend this term after obtaining the approval of the competent authority.

1. A company shall be dissolved by the loss of all its assets or of a substantial part thereof, such that there is no benefit in its continuation. 2. If one of the partners has undertaken to contribute a specific thing i…

A company shall be dissolved in the following cases: 1. Unanimous agreement of the partners to dissolve it. 2. Issuance of a judicial judgment ordering its dissolution. 3. Any other case provided by law.

A company shall be dissolved upon the death of a partner, their interdiction, their insolvency, or their bankruptcy, with due regard to the following: 1. It may be agreed that, upon the death of any partner, the company …

A company shall be dissolved by the withdrawal of a partner if its term is not fixed, provided that the withdrawing partner notifies their intention to withdraw to the other partners before the withdrawal, and that their…

The court may order the dissolution of a company at the request of any partner if another partner fails to fulfil their undertaking or for causes substantial harm to the company. Any agreement to the contrary shall be vo…

1. The partners holding a majority of the capital may request the court to order the exclusion of any partner where serious reasons justifying such exclusion exist. 2. Any partner may request the court to order their wit…

The assets of the company shall be liquidated and divided in the manner agreed upon by the partners. If they do not agree, any interested party may request the court to appoint one or more liquidators to carry out the li…

The authority of the managers shall terminate upon the dissolution of the company, and they may not undertake any new act related to the company; otherwise, whoever participates in such act shall be personally and jointl…

Upon dissolution, the company shall, during the liquidation phase, retain its legal personality to the extent necessary for the purposes of liquidation.

1. The liquidation shall be carried out, where applicable, either by all the partners or by one or more liquidators appointed by a majority of the partners. 2. If the partners do not agree on the appointment of the liqui…

1. The liquidator may not commence any new acts for the company, unless such acts are necessary for the completion of previous acts. 2. The liquidator shall carry out all liquidation acts, such as preparing an inventory …

1. The assets of the company shall be divided among all the partners after the creditors have been paid their rights, after deducting the amounts necessary for the settlement of debts that have not yet fallen due or are …

The rules governing the division of undivided property shall be followed in the division of companies.

A business partnership is a contract whereby two or more persons undertake to perform a service and guarantee its performance to third parties, for remuneration, whether they are equal or unequal in the distribution of s…

The partners shall be jointly liable for the performance of the services, and each of them shall be entitled to their share of the profit even if they did not perform the services.

1. Each partner shall be bound to perform the services undertaken and agreed upon by any of them. 2. Each of them shall be entitled to claim the agreed remuneration, and the employer’s obligation is discharged by payment…

A partner who has undertaken to perform the services may entrust its performance to another partner or to a third party, unless the employer has stipulated that the services must be performed personally by that partner.

Profit shall be distributed among the partners in the proportion agreed upon in the partnership contract, without regard to the nature or extent of services performed by each partner. It may be agreed that profit be uneq…

Losses shall be apportioned among the partners in proportion to the services undertaken by each of them.

If the thing in which the services are to be carried out perishes or becomes defective by the act of one of the partners, the owner of the services may hold any partner of their choice liable for the damage, and the loss…

In a business partnership, it is permissible for the premises to be provided by some partners and the machines and tools by others, just as it is permissible for the premises, machines, and tools to be provided by some o…

1. The activity of a business partnership may be confined to carrying and transporting things, and no regard shall be had to any disparity in the means of transport owned by each partner, whether in type and carrying cap…

A professional company is a company established by one or more persons licensed to practice a liberal profession, or thereby with others, and its purpose is to practice that profession, unless the law or the agreement pr…

1. A professional company may be established by persons licensed to practice a liberal profession. 2. A professional company may be established in partnership between persons licensed to practice the profession and a for…

1. The company may be named after the name or names of its partners or by a distinctive name, with the approval of the Competent Authority. 2. In the event of the withdrawal or death of the partner after whom the company…

1. The professional company shall practice the profession that is its activity through the licensed partners. 2. The professional company may engage other persons licensed to practice the profession that constitutes its …

A partner may not assign, sell, or pledge their shares in the professional company except with the approval of the majority of the partners.

A partner may not be a founder or a partner in more than one professional company or be employed by another professional company.

1. Each partner shall be personally liable for their professional faults towards the professional company and the rest of the partners, and the professional company shall be liable for the faults of the partners vis-à-vi…

If a partner in a professional company temporarily loses their license to practice the profession, or if a disciplinary or criminal judgment is issued against them preventing them from working for a temporary period, the…

1. If a partner in a professional company loses their license to practice the profession on a permanent basis, they shall be deemed to have withdrawn from the professional company by operation of law, while retaining the…

In addition to the general reasons for the dissolution of companies contained in this Law, a professional company shall be dissolved by a decision of the Competent Authority if all partners cease to meet the conditions f…

Mudaraba is a contract under which a capital provider delivers funds to another who undertakes to invest them in return for a proportional share of the profit.

1. The Mudaraba capital may be a debt owed by the mudarib to the capital provider. 2. If the capital provided by the capital provider for the purposes of the mudaraba consists of assets other than cash, the capital shall…

The capital provider is obligated to deliver the Mudaraba capital to the mudarib and to enable them to manage and dispose thereof.

The mudarib shall have the right of management and disposal after delivery of the capital, in accordance with the provisions set forth in this Law, subject to the terms of the Mudaraba contract.

The mudarib shall provide the capital provider with information related to the Mudaraba activities and shall render an account thereof at the end of its term. If the contract is for an indefinite term, this information s…

1. If the Mudaraba contract is restricted by time, place, type of work, or otherwise, the mudarib shall be bound by the restrictions imposed by the contract. 2. If the Mudaraba contract is unrestricted, the mudarib shall…

1. The mudarib may not mix the Mudaraba capital with their own funds, nor entrust it to another for Mudaraba, unless the custom so permits or the capital provider has authorized them to act as they see fit. 2. In cases w…

1. The capital provider alone shall bear any loss of capital, and any condition to the contrary shall be void. 2. If the capital is diminished in the hands of the mudarib without any transgression or negligence on their …

1. The share of each of the contracting parties in the profit shall be determined according to the agreement. 2. If there is no agreement on determining the share of each of the contracting parties in the profit, it shal…

1. It is not permissible in the Mudaraba contract to stipulate a fixed amount of profit for one of the contracting parties. 2. It is permissible to agree that the profit shall be shared between the contracting parties an…

1. A contracting party is entitled to their share of the profit upon the expiration of the Mudaraba, unless it is agreed to value the Mudaraba and determine the entitlement of each of the contracting parties at specific …

The Mudaraba contract expires upon the lapse of its term if the contract is for a fixed term, or upon the completion of the work for which the Mudaraba was contracted.

1. If the Mudaraba contract is for an indefinite term, either contracting party may withdraw from it at any time, provided that they inform the other contracting party of their intention to withdraw a reasonable period i…

1. The mudarib shall, upon the termination of the Mudaraba contract, complete the works already commenced to a state in which the Mudaraba funds or their profits are not exposed to perishing or diminution. 2. The mudarib…

1. The mudarib is obligated, upon the termination of the Mudaraba contract, to return to the capital provider’s share of the Mudaraba funds. 2. If the mudarib delays the return without an acceptable justification and the…

1. The Mudaraba contract shall terminate upon the death of either of the contracting parties, their interdiction, insolvency, or the initiation of liquidation proceedings against them. 2. If the Mudaraba contract termina…

A settlement is a contract by which the two parties resolve an existing dispute or prevent a potential dispute, by each of them mutually waiving part of their claim.

1. A person who concludes a settlement shall have the capacity to dispose, for consideration, of the rights covered by the settlement contract. 2. The capacity for donation is required if the settlement includes the waiv…

The settlement made by an authorized discerning minor or an authorized person suffering from mental incapacity, shall be valid, provided that it does not involve manifest prejudice. The same rule applies to the settlemen…

Settlement is not permissible in matters related to personal status or public order, but settlement is permissible in respect of financial rights arising from personal status, or arising from the commission of one of the…

The proof of settlement shall be made in accordance with the general rules of evidence in the applicable legislation.

1. It is required that the subject matter of the settlement be something in respect of which a consideration may lawfully be taken in exchange. 2. It is required that both the subject matter of the settlement and the con…

1. A settlement in respect of rights is valid whether the defendant admits them, denies them, or remains silent and expresses neither admission nor denial. 2. If the settlement occurs in the case of an admission for a sp…

If a person settles for part of the claim or for a portion of what they allege is owed by another, they shall be deemed to have waived their right to claim the remainder.

1. If two persons settle, each claiming a specific thing in the possession of the other, on the condition that each retains the thing in their possession, the settlement shall be governed by the rules of barter, and its …

The settlement entails the transfer of the right of the settling party to the agreed consideration and the extinction of their right that was the subject of the dispute, and it is not permissible for either of them or th…

The settlement terminates the disputes it covered, and it entails the extinction of the rights and of claims that either of the contracting parties has definitively waived.

The effect of the settlement is limited to the rights it covered and the resolution of the dispute therein, and does not extend to any other matters.

The two parties to a settlement may rescind it by mutual consent if it is in the nature of a commutative transaction, and it may not be mutually rescinded if it involves a waiver of some rights.

A settlement is indivisible, so the invalidity of a part of it entails the invalidity of the entire contract, unless it is clear from the contract's expressions, or from the circumstances, that the contracting parties ha…

A lease is a contract whereby the lessor undertakes to enable the lessee to benefit from a specific thing for a specific period in return for a known rent.

The legal capacity of the contracting parties at the time of the contract is required for the conclusion of a lease.

1. For a lease contract to be effective, the lessor or their representative shall have the right to dispose of what they lease. 2. A lease concluded by a negotiorum gestor is suspended pending ratification by the holder …

The subject matter of a lease is the usufruct, and its delivery is effected by the delivery of its subject matter.

The usufruct which is the subject matter of the contract shall be subject to the following conditions: 1. It shall be capable of being enjoyed. 2. It shall be sufficiently known to resolve any dispute.

The thing from which the usufruct is to be derived shall be known whether by inspection, by mentioning its designated location, or by a clear description; otherwise, the contract shall be void.

The lease term shall commence from the date agreed upon in the contract. If the contracting parties do not specify such date, then from the date of the contract.

1. The lease term shall be specified. 2. If a lease is concluded without an agreement on a term, or for an unspecified term, or if the claimed term cannot be proven, the lease shall be deemed concluded for the period spe…

If the lease contract expires and the lessee remains in enjoyment of the leased property with the knowledge of the lessor and without their objection, the lease shall be deemed renewed under its original terms and for a …

It is permissible to extend a lease to a future term, and it shall be binding by virtue of the contract, unless the leased property is an endowment property or belongs to a minor or a person of similar status, in which c…

If the lease term expires and a pressing necessity for its extension is proven, the court may extend it to the extent of the necessity, provided that the lessee pays the rent of the like in respect thereof.

1. The rent may be in cash, in kind, a debt, or a usufruct. 2. It is required that the rent be known, by specifying its type and amount if it is cash, and by stating its type, description, and specifying its amount if it…

It is permissible to agree on the advance payment, deferral, or payment of the rent in instalments to be paid at specified times.

1. Rent shall become due upon enjoyment of the usufruct or upon the ability to enjoy it. 2. If the contract does not specify a time for payment of the rent, the rent specified for the usufruct shall be due absolutely aft…

Rent is not due for a period that has elapsed before the delivery of the leased property, unless the lessee was the cause thereof.

1. The lessor shall deliver to the lessee the leased property and its appurtenances in a condition fit for the full enjoyment of the intended usufruct, in accordance with the agreement or the nature of the leased propert…