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It starts, as these things usually do, with a phone call you were not expecting.

A supplier says the goods cannot be shipped. A contractor says his workers cannot get in. A counterparty says the contract needs to be “paused.” And somewhere in the background, a news ticker scrolls through images of airspace closures, maritime disruptions, and escalating hostilities across the Gulf.

Since late February 2026, the conflict involving the United States, Israel, and Iran has moved from geopolitical theatre into the corridors of commerce. Shipping lanes through the Strait of Hormuz are under pressure. Airspace restrictions have grounded cargo routes across multiple Gulf states. Insurance premiums have spiked sharply. Supply chains already fragile after years of global disruption are being tested once again.

For businesses operating in the UAE, the immediate legal question is the same everywhere: does any of this actually affect my legal obligations? And if so, how?

The instinct, almost universal, is to reach for two words: force majeure. It rolls off the tongue easily. It sounds both formal and final. And it carries the comforting suggestion that none of what is happening is your fault, which, to be fair, it probably is not.

But here is the thing. Force majeure is not a magic phrase. It is a specific legal concept with specific requirements, and in the UAE those requirements differ significantly depending on which legal framework governs your contract. Getting it wrong has real consequences: unpaid damages, forfeit rights, and relationships that do not survive the dispute.

Here is what most people miss: the UAE is not one legal system. It is three. Onshore contracts sit under the UAE Civil Code. Contracts in the Dubai International Financial Centre operate under the DIFC’s own common law-based regime. Contracts in the Abu Dhabi Global Market are governed directly by English law. Each framework approaches force majeure differently, each has a different threshold, and each produces different outcomes when things go wrong. The governing law clause in your contract, that short paragraph most people never read twice, determines everything.

So let us slow down. Let us take each framework in turn and look at what it actually says.

Framework One: UAE Mainland. The Civil Code and the Doctrine of Impossibility

On the UAE mainland, force majeure is a creature of statute rather than contract. Article 273 of the Civil Transactions Law (Federal Law No. 5 of 1985, which remains in force until 1 June 2026) sets out the core rule: where a force majeure event renders performance genuinely impossible, the obligation is extinguished and the contract terminates automatically. Article 287 reinforces this by shielding a party from damages liability where the harm is caused entirely by factors outside its control.

The operative word is “impossible.” UAE courts draw an unforgiving line between genuine impossibility on one side and excessive difficulty on the other. Increased freight costs are not impossibility. Longer shipping routes are not impossibility. A more expensive alternative supplier is not impossibility. If performance remains technically achievable by any means, it does not cross the threshold.

There is a further requirement that trips many businesses up: the event must be the sole cause of non-performance. If your inability to perform is even partly the result of your own prior delay, your own commercial decisions, or your own failure to plan, the force majeure defence may fail entirely. Courts expect parties to have considered foreseeable risks at the time of contracting. Geopolitical tension in the Gulf, a region where such tension is not exactly a novelty, may not always qualify as unforeseeable.

On 30 December 2025, the UAE enacted Federal Decree-Law No. 25 of 2025, the new Civil Transactions Law, which comes into force on 1 June 2026. The new law largely preserves the existing force majeure framework, so businesses should not expect a substantive shift in how these principles are applied.

What mainland UAE law offers, and what neither DIFC nor ADGM can match, is the hardship doctrine under Article 249. This is the provision most businesses should be thinking about right now, and the one most businesses have never heard of.

Article 249 addresses a fundamentally different situation from force majeure. It applies when something extraordinary and unforeseeable happens, something of a public nature, that makes contractual performance so crushingly burdensome that it would cause the performing party grave loss. In that case, a court or arbitral tribunal can step in and adjust the obligation to a reasonable level, whether by reducing the scope of what must be performed or by increasing the remuneration payable in return.

Two things make this provision distinctive. First, it is mandatory. You cannot contract out of it. Any clause that attempts to exclude Article 249 is void as a matter of public policy. Second, unlike force majeure, it does not destroy the contract. The contract survives; the obligations are recalibrated.

Think of it this way. Force majeure is a sledgehammer: when it applies, the contract is gone, but the threshold is absolute impossibility. Hardship is a scalpel: the contract survives, but it is adjusted to reflect the new reality. In the current environment, where shipments are rerouted rather than cancelled, where costs have risen steeply but supply has not stopped entirely, Article 249 is likely to be the more relevant tool for most onshore UAE businesses.

One caution: courts will insist on a specific causal link between the conflict and the particular obligation in question. A general plea of regional instability will not do. You need to show precisely how the disruption has affected precisely the obligation you are struggling to perform.

Framework Two: DIFC. A Statutory Implied Term and the Limits of Vague Drafting

The Dubai International Financial Centre operates its own distinct legal system. Its Contract Law (DIFC Law No. 6 of 2004) is modelled on the UNIDROIT Principles of International Commercial Contracts and applies common law principles adapted for a sophisticated commercial environment.

One of the most important features of the DIFC framework is that it actually implies a force majeure provision into every contract it governs, whether or not the parties have included one. Article 82 of the DIFC Contract Law provides that non-performance by a party is excused if that party proves the non-performance was due to an impediment beyond its control, which it could not reasonably have been expected to foresee at the time of contracting, and which it could not have avoided or overcome.

This is a meaningful protection. Unlike ADGM, where force majeure has no existence unless the contract creates it, DIFC law gives parties a statutory baseline. Even a contract that says nothing about force majeure still carries this protection.

But the word “impediment” carries significant weight. DIFC courts interpret Article 82 strictly and require parties to demonstrate that performance has genuinely been prevented, not merely made harder or more costly. Economic difficulty, price increases, and supply disruptions that fall short of actual prevention are not enough. The DIFC courts are staffed by experienced commercial judges and international arbitrators, and they are not inclined to interpret force majeure provisions generously.

There is also a critical notice requirement under Article 83. A party relying on Article 82 must give notice to its counterparty within a reasonable time after it knew or ought to have known of the impediment, with an explanation of the effect on its ability to perform. Failure to give notice in time does not eliminate the excuse, but it does make the party liable for any additional damages caused by the delay in notification. In a fast-moving situation like the current conflict, “reasonable time” may mean days, not weeks.

Where parties have included an express force majeure clause in their DIFC contract, that clause will govern instead of Article 82, and DIFC courts will construe it strictly. Vague drafting is not merely unhelpful in the DIFC: it is a liability. A clause that says “neither party shall be liable for failure to perform due to circumstances beyond its control” will be read narrowly, its ambiguities resolved against the party that drafted it. “Circumstances beyond its control” is not a definition. It is an invitation to dispute every element.

One further point. The DIFC Contract Law does not expressly codify the doctrine of frustration as a separate concept. Given that Article 82 provides a statutory mechanism for excusing performance, frustration is rarely invoked independently. However, DIFC courts apply common law principles and would likely recognise frustration where a supervening event makes performance radically different from what was originally agreed.

Framework Three: ADGM. English Law in Full, Applied by International Judges

The Abu Dhabi Global Market is, in legal terms, the closest thing to transporting an English courtroom to the Gulf. Under the ADGM Application of English Law Regulations 2015, English common law (including contract law, equity, and the rules of common law) applies directly in ADGM as at 1 June 2015, subject to limited modifications. This is not English law by analogy. It is English law itself, applied by ADGM courts staffed by international judges, including judges drawn from the English High Court, whose decisions are commercially sophisticated and set precedents that other jurisdictions follow.

The consequences for force majeure are fundamental. ADGM has no standalone force majeure doctrine. There is no statutory implied term equivalent to DIFC’s Article 82. Force majeure in ADGM exists only where your contract creates it, and courts will construe whatever your contract says with strict English law precision.

If your ADGM contract includes a force majeure clause, the ADGM courts will apply the English approach: each word of the clause will be examined carefully, the party invoking the clause carries the burden of proving every element, and economic hardship alone will not suffice. The clause must identify the event that has occurred, the obligation it prevents, and the steps taken to mitigate. Where the clause requires the event to “prevent” performance, courts will ask whether performance is physically or legally impossible. Where it says “hinder,” courts will apply something closer to impossibility in practice. Where it says “delay,” courts may be more flexible, but they will still examine whether the delay is genuinely attributable to the specified event.

Where there is no express force majeure clause at all, the only available doctrine is frustration: the common law principle, given statutory form in the Law Reform (Frustrated Contracts) Act 1943, which applies in ADGM through the Application of English Law Regulations. Frustration discharges a contract automatically where a supervening event, not caused by either party, makes performance radically different from what was originally agreed. English courts have consistently described frustration as a doctrine to be applied narrowly, not invoked to rescue parties from bad commercial bargains. The threshold is famously high.

When frustration is established in ADGM, the Law Reform Act governs the financial consequences: money paid before the frustrating event can generally be recovered, money not yet due ceases to be payable, and a just sum may be awarded where a party has conferred a benefit before the contract was discharged.

The hardship doctrine, which gives onshore UAE courts the power to adjust unfair obligations under Article 249, has no equivalent in ADGM. If your contract sits in ADGM and performance has become commercially ruinous but not technically impossible, your options are limited to what your force majeure clause actually says, and nothing else.

This is why governing law choices in UAE contracts carry very different risk profiles. Onshore, there is a safety net even when the contract is silent. In the DIFC, there is a partial statutory safety net. In ADGM, the contract is the safety net. If it has holes, they are your problem.

The Drafting Problem: When Your Safety Net Has No Net

The conflict has exposed something that was true well before February 2026: most force majeure clauses in commercial contracts across the UAE are badly drafted.

Not all of them. But enough to matter.

The single most common version looks something like this: “Neither party shall be liable for failure to perform due to circumstances beyond its control.” It sounds reasonable. It feels protective. It is, in practice, almost useless.

Presented with this clause, a DIFC or ADGM court will immediately ask: what are “circumstances”? What does “beyond its control” mean? What counts as “failure to perform”? What notice must be given? What mitigation is required? How long can the clause be invoked? Can either party terminate? The clause answers none of these questions. And since courts construe force majeure clauses strictly, every gap is a gap in your protection.

A clause that actually works needs six things. First, a definition of qualifying events, specific enough to be meaningful: war, armed conflict, government action, sanctions, terrorism, natural disaster, infrastructure failure, epidemic. Not “circumstances,” not “events,” not “anything beyond our control.” Named events. Second, a notice requirement: written notice within a specified number of business days (five is standard practice), identifying the event, the obligations affected, and the expected duration. Third, a mitigation obligation: an express requirement that the party invoking the clause take all reasonable steps to overcome or minimise the effect of the event. Fourth, a suspension mechanism: obligations are suspended, not extinguished, for the duration of the event. Fifth, a duration cap with a termination right: if the force majeure event continues beyond a defined period (sixty days is a reasonable benchmark), either party may terminate on short notice. Sixth, and critically, express exclusions: economic hardship, price increases, and market changes are not force majeure and should be stated as such.

Without these elements, your clause is not protection. It is an invitation to litigation. In the DIFC and ADGM, where courts will strictly construe every word and resolve ambiguity against the drafter, vague language does not give you the benefit of the doubt. It gives the other side an argument.

Liquidated Damages: Three Frameworks, Three Different Outcomes

One further area where the three-framework structure of UAE law produces very different results is liquidated damages, those pre-agreed sums payable upon breach.

On the UAE mainland, courts have a mandatory power to adjust liquidated damages upwards or downwards to reflect the actual harm suffered, regardless of what the parties agreed. You cannot contract out of this either. A contractor may agree to pay AED 50,000 per day in delay damages, but if the employer’s actual loss turns out to be lower, a UAE court may reduce the sum. If it is higher, the court may increase it. The agreed figure is a starting point, not a ceiling.

In the DIFC and ADGM, the English law position applies. Liquidated damages clauses are enforceable as agreed, unless they cross into penalty territory. The current English test, articulated by the UK Supreme Court in Cavendish Square v El Makdessi (2015), asks whether the stipulated sum is disproportionate to the innocent party’s legitimate interest in performance. Genuine pre-estimates of loss are enforceable. Extravagant or unconscionable sums may be struck down as penalties. But courts do not have a roving power to adjust agreed sums to match actual harm: if the clause survives the penalty analysis, it is enforced as written.

This distinction matters practically when force majeure or frustration is also in play. On the mainland, a court that adjusts your obligations under Article 249 may simultaneously moderate the liquidated damages owed for the disruption period. In DIFC and ADGM, those two analyses are entirely separate: force majeure might excuse the performance, but the liquidated damages clause is a distinct contractual provision with its own survival question.

What You Should Be Doing Right Now

If you have active contracts in the UAE and the current conflict is affecting your ability to perform, five things require immediate attention.

Read your contract, specifically the governing law clause and the force majeure provision. These two items determine everything: which framework applies, what the threshold is, what notice you must give, and how long you have. The clock on notice periods may already be running.

Send your notice. Under the FIDIC 1999 Red Book, which governs a significant proportion of construction contracts in the UAE, a force majeure notice must be given within 14 days of awareness of the event and a formal claims notice within 28 days. Missing the claims deadline is described in the contract as fatal to entitlement, with no exceptions. In DIFC contracts under Article 83, notice must be given within a reasonable time. What is reasonable is not defined, but in a fast-moving situation it will be measured in days.

Build a contemporaneous record. Document which specific obligations are affected, how the conflict has prevented or hindered performance of those specific obligations, what alternative routes or suppliers you explored, and why they were inadequate. Courts and tribunals respond to specific evidence, not broad references to regional instability. The quality of your records will determine the quality of your position.

Engage your counterparty directly. Good faith obligations apply across all three frameworks. A counterparty who hears from you early and in person is far more likely to agree a practical solution than one who receives a formal force majeure letter weeks into a disruption they have already noticed themselves.

Take legal advice specific to the governing law of your contract. The three frameworks produce materially different outcomes. Claiming hardship relief that does not exist in your jurisdiction, or missing a notice deadline that forfeits your entitlement entirely, can be the difference between a manageable commercial adjustment and a costly dispute.

The Bigger Picture

What the current conflict has exposed, once again, is that the governing law of a contract is not a technicality. It is a commercial decision with real financial consequences, and it needs to be made with those consequences in mind.

A business with an onshore UAE contract has access to the hardship doctrine under Article 249, a mandatory judicial adjustment power that can save a contract when circumstances shift dramatically. A business with a DIFC contract has a statutory force majeure baseline under Article 82, imperfect but real. A business with an ADGM contract has English law in full, including sophisticated courts and clear precedent, but no safety net beyond the words of its own force majeure clause. All three of those are legitimate choices. But they are different choices, with different risk profiles, and they need to be understood before a crisis, not during one.

The parties that will navigate this period best are not the ones who invoke force majeure loudest. They are the ones who read their contracts carefully, respond to disruption promptly, document everything rigorously, and engage with their counterparties honestly. And when this is over, the ones who will be best positioned for the next disruption are the ones who use this moment to fix their force majeure clauses before they need them again.

When the phone rings with news you were not expecting, the question is not “Can we declare force majeure?” The question is: which legal framework governs this contract, what does that framework actually require, and what can we actually demonstrate?

Those three questions deserve honest answers. The sooner you seek them, the better your position.

This article is for informational purposes only and does not constitute legal advice. Readers should seek specialist legal counsel in relation to their specific circumstances.

For more information, visit www.elplegal.com