قانون التقاضي المدني في الإماراتمرسوم بقانون اتحادي بإصدار قانون المعاملات المدنية

Article (2) Reference shall be made to the rules and principles of Islamic jurisprudence (Usul Al-Fiqh) for the understanding, interpretation, and construction of legislative texts.

Article (3) The following shall be deemed matters of the public order: 1. The definitive rulings of the Islamic Shari'a. 2. The provisions related to the systems of governance. 3. The provisions related to the personal status of Muslims, such as marriage, inheritance, and lineage.

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Federal Decree by Law of 2025 Promulgating the Civil Transactions Law 3 4. The mandatory legal rules from which derogation by agreement is not permitted and are stipulated in the laws promulgated in the United Arab Emirates. Part Two Temporal Application of the Law

Article (5) 1. Provisions related to legal capacity shall apply to all persons who meet the conditions stipulated in those provisions. 2. If a person has full legal capacity under former provisions and then becomes of limited legal capacity under new provisions, this shall have no effect on their prior acts.

Article (7) 1. If a new provision prescribes a period for barring a claim by the lapse of time that is shorter than that prescribed by the former provision, the new period shall run from the time the new provision enters into force, even if the former period had commenced before that. 2. If the remainder of the period prescribed by the former law is shorter than the period prescribed by the new provision, the period for barring a claim by the lapse of time shall be completed upon the expiry of this remainder.

Article (8) The provisions in force at the time of preparing the means of evidence, or at the time it ought to have been prepared, shall apply thereto.

Article (9) Time limits shall be calculated according to the Gregorian calendar, unless the law provides otherwise. Part Three Spatial Application of the Law

Article (10) The law of the United Arab Emirates shall be the reference for the characterization of relationships when it is required to determine the type of these relationships in a case involving a conflict of laws, to ascertain the applicable law.

Article (12) The substantive conditions for the validity of a marriage shall be governed by the law of the country in which the marriage was concluded. As for the form, a marriage between two foreigners or between a foreigner and a national shall be considered valid if it is concluded in accordance with the formalities of the country where it was concluded, or if the formalities prescribed by the law of each of the spouses are observed.

Article (13) The law of the country in which the marriage was concluded shall apply to the following: 1. The personal effects and property-related effects arising from the contract of marriage. 2. Divorce, judicial divorce, and separation.

Article (14) In the cases stipulated in Articles (12) and (13) of this Law, if one of the spouses is a national of the United Arab Emirates at the time of the conclusion of the marriage contract, or subsequently becomes a national and retains their nationality until the time the lawsuit is instituted, the law of the United Arab Emirates alone shall apply, except for the condition of legal capacity for marriage.

Article (16) The substantive matters related to guardianship, tutorship, curatorship, and other systems established for the protection of persons lacking or of limited legal capacity and absentees, shall be governed by the law of the person to be protected.

Article (18) 1. The possession and ownership of immovable property and other related real rights (jus in rem) shall be governed by the law of the location of the immovable property. 2. Movable property shall be governed by the law of the country where it is located at the time the cause giving rise to the acquisition or loss of its possession, ownership, or other related real rights (jus in rem) occurs.

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Federal Decree by Law of 2025 Promulgating the Civil Transactions Law 7 3. The law of the country where property is located shall determine whether such property is immovable or movable.

Article (19) 1. Contractual obligations, as to both form and substance, shall be governed by the law of the country expressly agreed upon by the parties. If they do not agree, the law of the country in which the contracting parties have their common domicile shall apply. If their domiciles differ, the law of the country where the main obligation of the contract is to be performed shall apply, unless it is clear from the circumstances that another law is intended to be applied. 2. Contracts concluded concerning immovable property shall be governed by the law of its location.

Article (20) 1. Non-contractual obligations shall be governed by the law of the country in which the event giving rise to the obligation occurred. 2. The provision of Paragraph (1) of this Article shall not apply to obligations arising from an unlawful act with respect to events that occur abroad and are lawful in the United Arab Emirates, even if they are deemed unlawful in the country where they occurred.

Article (21) The rules of judicial jurisdiction, and all procedural matters, shall be governed by the law of the country in which the action is instituted or in which the procedures are undertaken.

Article (22) The provisions of the preceding Articles shall not apply where there exists a provision to the contrary in a special law or in an international treaty in force in the State.

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Article (24) The law of the United Arab Emirates shall apply in the case of stateless persons.

Article (26) Where a person simultaneously holds the nationality of the United Arab Emirates and the nationality of another country, the law of the United Arab Emirates shall apply.

Article (27) If it appears from the provisions of the preceding Articles that the applicable law is the law of a country in which multiple legal systems coexist, the internal law of that country shall determine which of such systems shall be applied. If there is no provision therein, the prevailing legal system or the law of the domicile shall be applied, as the case may be.

Article (29) The provisions of a foreign law designated by the preceding Articles may not be applied if such provisions are contrary to the public order or public morals in the United Arab Emirates.

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Article (30) The law of the United Arab Emirates shall be applied if it is impossible to prove the applicable foreign law or to determine its meaning. Chapter Two Some Interpretive Rules of Jurisprudential Principles (Usul al-Fiqh)

Article (31) Ignorance of the law is no excuse.

Article (32) An exception shall not be extended by analogy, nor shall it be broadly interpreted.

Article (33) A special provision shall restrict a general provision.

Article (34) Any matter established by a mandatory provision shall prevail over any condition.

Article (36) A ruling shall exist or cease to exist with the existence or absence of its legal cause.

Article (37) Fungibles shall not cease to exist.

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Article (38) Certainty shall not be removed by doubt.

Article (40) The presumption is freedom from liability.

Article (41) The presumption is the non-existence of incidental attributes.

Article (42) What is proven to exist at a certain time is presumed to continue, unless there is evidence to the contrary.

Article (43) The presumption is that an occurrence is attributed to the nearest possible time.

Article (44) What is established contrary to analogy shall not be used as a basis for analogy in other cases.

Article (45) 1. No harm shall be inflicted nor reciprocated. 2. Harm shall be removed. 3. Harm shall not be removed by an equivalent harm.

Article (47) 1. Private harm shall be borne to avert public harm. 2. A greater harm shall be removed by a lesser harm.

Article (48) Necessities permit prohibitions, and necessity shall be measured by its extent.

Article (49) Compulsion shall not invalidate the right of another.

Article (50) Averting harm takes precedence over securing benefits.

Article (51) 1. Usage is authoritative, whether general or specific. 2. Usage shall be recognized when it is constant or predominant. 3. Literal meaning shall be disregarded where usage indicates otherwise.

Article (52) A matter recognized by custom is equivalent to a stipulated condition.

Article (53) Designation by custom is equivalent to designation by text.

Article (57) Where a preventive cause and a permissive cause conflict, the preventive cause shall prevail.

Article (58) That which is ancillary follows that which is principal and shall not be subject to a separate ruling.

Article (59) If the principal is invalidated, the accessory is invalidated accordingly.

Article (60) That which has lapsed shall not be reinstated, just as that which is non-existent shall not be restored.

Article (61) If a thing is void, that which is contained therein is void.

Article (63) No consideration shall be given to conjecture.

Article (65) What is established by proof is equivalent to what is established by direct observation.

Article (66) A person is bound by their admission.

Article (68) Appearance serves as proof for defence, but not for the establishment of a right.

Article (69) Entitlement to return shall arise from the assumption of liability, and entitlement to profit shall arise from bearing risk of loss.

Article (70) Whoever hastens to obtain something before its time shall be punished by deprivation thereof.

Article (73) 1. The event of birth and death shall be established by its registration in the records designated for that purpose. 2. If the event of birth or death is not registered in the records, or where the registration is proven to be inaccurate, such occurrence may be established by any of the legally admissible means of evidence. 3. The records related to births, deaths, and notifications thereof shall be regulated by a special law.

Article (74) The provisions regarding persons of unknown lineage, the missing persons, and the absentees shall be regulated by special laws. In the absence thereof, the provisions of Islamic Shari'ah shall apply to them.

Article (76) The family of a person shall consist of their spouse and their relatives by consanguinity. Relatives by consanguinity shall be deemed to include all persons who share a common ancestor.

Article (77) 1. Direct kinship is the relationship between ascendants and descendants. 2. Indirect kinship is the relationship between persons who share a common ancestor without either being an ascendant or descendant of the other.

Article (78) In calculating the degree of direct kinship, each ascending generation to the common ancestor shall be counted as one degree, excluding that ancestor. In calculating the degree of indirect kinship, the degrees shall be counted upward from the descendant to the common ancestor, and then downward from that ancestor to the other descendant, each generation shall be counted as one degree, excluding the common ancestor.

Article (79) The relatives of one spouse shall be deemed to be in the same degree of kinship with respect to the other spouse.

Article (82) 1. The domicile of a person lacking legal capacity, a minor, an interdicted person, a missing person, and an absentee shall be the domicile of their legal representative. 2. A minor authorized to trade shall have a special domicile for the acts and dispositions that the law deems them competent to perform.

Article (83) 1. An elected domicile may be designated for the performance of a specific legal act, and shall apply for all matters relating to such act, including compulsory enforcement procedures, unless it is expressly stipulated that such domicile shall be limited to certain acts. 2. The existence of an elected domicile shall not be established except by writing.

Article (84) 1. Every person who has reached the age of majority, enjoying full mental capacity, and has not been interdicted shall have full legal capacity to exercise their civil rights. 2. A person reaches the age of majority upon completing eighteen (18) Gregorian years.

Article (85) 1. A person lacking discernment due to their minority of age, mental incapacity, or insanity shall not be competent to exercise civil rights. 2. Any person who has not attained seven (7) Gregorian years of age shall be deemed to lack discernment. 3. The age of discernment shall be seven (7) complete Gregorian years.

Article (86) A person shall be deemed to have limited legal capacity, as determined by law, in the following cases: 1. Any person who has attained the age of discernment but has not attained the age of majority.

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Federal Decree by Law of 2025 Promulgating the Civil Transactions Law 17 2. Any person who has attained the age of majority and is prodigal or suffers from legal imprudence.

Article (87) A person lacking legal capacity, a person of limited legal capacity, a missing person, and an absentee shall, as the case may be, be subject to the provisions governing guardianship, tutorship, curatorship, or representation of the absentee, in accordance with the rules prescribed by law.

Article (88) No person may waive their personal freedom or their legal capacity, nor alter the rules governing them, nor make either the subject of any form of transaction.

Article (89) The material elements of a human being may not be the subject of dispositions contrary to the law, public order, or public morals.

Article (90) Any person whose personality rights have been unlawfully infringed upon may request the cessation of such infringement, along with compensation for any damage sustained.

Article (93) A legal person shall enjoy all rights, except those which are inherent in the natural attributes of a human being, within the limits prescribed by law.

Article (95) Legal persons shall be subject to the provisions of the special laws governing them. Chapter Four Property and Things

Article (97) Property may be lawful (Mutaqawwim) or unlawful (non-Mutaqawwim). Lawful (Mutaqawwim) property is that which may be lawfully enjoyed, while unlawful (non- Mutaqawwim) property is that which may not be lawfully enjoyed.

Article (98) Anything that can be corporeally or incorporeally possessed and lawfully enjoyed, and that is not excluded from transactions by its nature or by virtue of the law, may constitute the subject of financial rights.

Article (99) 1. Things that are excluded from transactions by their nature are those that no one can exclusively possess. 2. Things that are excluded from transactions by virtue of the law are those that the law does not permit to be the subject of financial rights.

Article (101) 1. Consumable things are those whose utility is realized only through their consumption or expenditure. 2. Non-consumable things are those whose utility is realized by their repeated use while their substance remains intact.

Article (103) A movable placed by its owner on an immovable owned thereby for the purpose of serving or exploiting such immovable shall be deemed immovable by destination, even if it is not permanently affixed to the immovable.

Article (105) Whoever lawfully exercises their right shall not be liable for any damage resulting therefrom to others.

Article (106) 1. Whoever unlawfully exercises their rights shall be held liable. 2. The exercise of a right shall be deemed unlawful if: a. The intent to cause harm is present. b. The interests sought to be achieved through such exercise are contrary to the provisions of the law, public order, or public morals. c. The anticipated interests are disproportionate to the harm inflicted upon others. d. Such exercise exceeds what is established by custom and usage. Part Two Categories of Rights

Article (107) A right may be personal, real, or incorporeal.

Article (109) 1. A real right (jus in rem) is a direct legal power over a specific thing, conferred by law to a specific person. 2. A real right (jus in rem) may be principal or accessory.

Article (110) 1. Principal real rights are the right of ownership and the rights derived therefrom, namely the rights of disposition, usufruct, use, habitation, Musataha, easement, and any other right so provided for by law. 2. Accessory real rights are the mortgage, the possessory pledge, and privilege.

Article (111) 1. Incorporeal rights are those that attach to an intangible thing. 2. Incorporeal rights include neighbouring rights, trademarks, industrial property rights, and other incorporeal rights that shall be governed by special laws. Book One Obligations Section One Sources of Obligation

Article (112) Obligations, or personal rights, arise from legal acts, legal facts, and the law. The sources of obligation are: 1. The Contract. 2. The Unilateral Act. 3. The Harmful Act (Tort). 4. The Beneficial Act (Unjust Enrichment). 5. The Law.

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Federal Decree by Law of 2025 Promulgating the Civil Transactions Law 23 Chapter One The Contract Part One General Provisions

Article (115) 1. The general provisions stipulated in this chapter shall apply to both named and unnamed contracts. 2. The special rules for certain contracts set out within the provisions related to each of them in this Law or other laws shall apply. 3. The general provisions shall apply in matters not conflicting with the special provisions.

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Article (117) 1. The contract shall be consensual when it is concluded merely by the exchange of consent between the parties by any means whatsoever. 2. A contract shall be formal when its conclusion requires compliance with the form determined by the law. 3. A contract is deemed a real contract when its conclusion is conditional upon the delivery of a specific thing.

Article (118) 1. A negotiated contract is one whose terms are freely negotiated between the parties. 2. A contract of adhesion is one whose general terms are predetermined by one party and are not subject to negotiation. Part Two Interpretation of the Contract

Article (119) 1. If the wording of a contract is clear, one may not be departed from it by way of interpretation to ascertain the common intention of the contracting parties. 2. If there is a room for interpreting a contract, the common intention of the contracting parties shall be sought, without being confined to the literal meaning of the words, guidance shall be drawn from the nature of the transaction and from the honesty and trust that should prevail between the contracting parties in accordance with the custom prevailing in transactions.

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Article (124) The necessary elements required for the conclusion of a contract are: 1. The mutual consent of the parties with respect to the contract's essential elements. 2. The subject matter of the contract exists or is capable of existing, is determinate or capable of determination, and is lawful to transact in. 3. The cause of the contract is lawful.

Article (126) 1. The manifestation of will shall be: a. By words or in writing, and it may be in the past tense, as well as in the present or imperative tense, where either is intended to express the present. b. By a gesture customarily understood, even from a person who is not mute. c. By an actual exchange indicating consent. d. By adopting any other course of conduct which, in the circumstances of the case, leaves no doubt as to its indication of consent. 2. The manifestation of will may be implicit, unless the law provides or the two parties agree that it must be explicit.

Article (127) 1. The offer of goods and services accompanied by a statement of the consideration shall be deemed an offer, unless indications exist to the contrary. 2. Publication, advertisement, and statements of current prices, and any other statement related to offers or requests addressed to the public or to individuals, are not considered an offer in case of doubt, but rather an invitation to contract.

Article (129) The contracting parties shall have the option to revoke the offer until the end of the contractual session (majlis). The offer shall lapse in the following cases: 1. If the offeror expressly or implicitly retracts it before acceptance is issued. 2. If it is expressly or implicitly rejected by the offeree. 3. If the acceptance does not customarily follow the offer, or if the period specified by the offeror for acceptance expires without it being issued. 4. If the offeror or the offeree dies, or if either of them loses their legal capacity before acceptance is issued, even if the offer has a specific duration.

Article (130) 1. If a time limit is specified for acceptance, the offeror is bound to keep the offer open until the expiry of that time limit. 2. If no time for acceptance is specified, the time shall be deduced from the circumstances of the case, the nature of the transaction, or custom. 3. If the offeror withdraws their offer before the time expires, the person to whom the offer was addressed may claim compensation for the damage they incurred, without this including any expected profit from the conclusion of the contract.

Article (132) 1. If the contracting parties were present in one place or in two different places but are connected via direct means of communication, the contract shall be considered to have been concluded at the time and place where the acceptance was issued, unless the law or the agreement stipulates otherwise. 2. If the contracting parties are absent, the contract shall be considered to have been concluded at the time and place where the offeror learned of the acceptance, unless the law or the agreement stipulates otherwise.

Article (133) Without prejudice to the provisions contained in other laws, a contract by auction shall not be concluded except by the fall of the hammer. A bid shall lapse upon the submission of a higher bid, even if it is void, or by the closing of the auction without it being awarded to any person.

Article (134) Acceptance in contracts of adhesion shall be limited to mere acceptance to uniform conditions set by the offeror for all their other contracting parties and which are not open to negotiation.

Article (135) 1. An agreement under which both or one of the contracting parties undertakes to conclude a specific contract in the future shall not be valid unless all the essential elements of the contract intended to be concluded and the period within which it shall be concluded are specified. 2. If the law requires that a form be fulfilled for the completion of the contract, compliance with this form shall be observed in the agreement that includes the promise to conclude the contract.

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Article (136) If a person undertakes to conclude a contract, then reneges thereon, and the other party brings a claim seeking enforcement of the undertaking, and the requirements for the conclusion of the contract are met, particularly those relating to its form, the judgment, once it has acquired the force of a final ruling, shall stand in place of the contract.

Article (138) A framework agreement is a contract pursuant to which the contracting parties determine the principal terms that govern the contracts they conclude between them in accordance with the provisions of this agreement. This agreement shall be deemed to form part of those contracts, unless otherwise expressly or implicitly agreed. Second: Representation in Contracting

Article (140) Whoever personally concludes a contract for their own account is solely bound by the effects resulting therefrom.

Article (141) 1. If a contract is concluded by way of representation, the person of the representative, not that of the principal, shall be taken into consideration in determining defects of consent, or the effect of knowledge of certain special circumstances, or the imputation of knowledge thereof. 2. If the representative is an agent acting in accordance with specific instructions issued thereto by their principal, the principal may not rely on the agent's ignorance of circumstances that the principal knew or ought to have known.

Article (142) If a representative concludes a contract in the name of the principal within the limits of their agency, the effects of this contract and the rights and obligations arising from it shall accrue to the principal.

Article (143) If the contracting party, at the time of concluding the contract, does not declare that they are contracting in the capacity of a representative, the effects of the contract shall not be attributed to the principal, whether as creditor or debtor, unless it was necessarily to be presumed that the person with whom the representative contracted knew of the existence of the representative, or it was immaterial to them whether they dealt with the principal or the representative.

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Article (144) Where both the representative and the person with whom they contract are unaware, at the time of concluding the contract, of the termination of the representation, the effects of the contract concluded by the representative shall be attributed to the principal or their successors.

Article (145) A person may not be permitted to contract with themself in the name of the person they represent, whether the contract is for their own account or for the account of another person, without the authorization of the principal. However, the principal in this case may ratify the contract. Without prejudice to any contrary provisions of the law or the rules of commerce. Third: Capacity to Contract

Article (146) Every person is competent to contract, unless their capacity is removed or restricted by law.

Article (150) The guardian of a minor's property shall be their father, then their father's testamentary guardian, then the paternal grandfather, and thereafter the court or the custodian appointed thereby.

Article (151) The law shall determine the capacity required to be met by a guardian to exercise the rights of guardianship over the property.

Article (153) The acts carried out by a tutor concerning a minor's property that do not constitute acts of administration, including sale, mortgage, loan, settlement, and partition of undivided property and investment of funds, shall be valid and effective only with the authorization of the court, in accordance with the conditions and instances prescribed by law.

Article (154) A person suffering from insanity or mental incapacity shall be interdicted by operation of law. Any acts concluded by either of them shall be void if it is concluded after the issuance of the interdiction decision. If the act is concluded before the interdiction decision, it shall not be void unless the state of insanity or mental incapacity was notorious at the time of contracting, or the other party was aware thereof.

Article (155) 1. The interdiction of the prodigal and the person of impaired judgement, and the lifting thereof, shall be by a judgment of the court, and the court may publish the judgment. 2. The acts of the prodigal and the person of impaired judgement after interdiction shall be subject to the same rules as the acts of a discerning minor. Their acts prior to interdiction shall be valid, unless they result from exploitation or collusion, or if the condition was notorious, or the other party was aware thereof.

Article (156) 1. The court, after conducting the necessary investigation, may authorize the prodigal or the person of diminished judgement to administer all or part of their property, with an unrestricted or restricted authorization as it deems appropriate. It may also require the prodigal to render an account of their administration at the times it specifies. 2. The court may rescind or revoke the authorization for administration if it deems it necessary.

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Article (157) The laws shall specify the procedures to be followed for the interdiction of persons suffering from insanity, the management and investment of their property, and the acts relating thereto, and other matters related to guardianship, tutorship, and curatorship.

Article (159) The acts carried out by a guardian, tutor, curator, and representative of an absentee are valid within the limits prescribed by law.

Article (160) If a person of limited capacity resorts to fraudulent means to hide their lack of capacity, they shall be bound to compensate the other party for the damage suffered as a result of the annulment of the contract. Fourth: Defects of Will 1. Mistake

Article (162) 1. If a contracting party falls into an essential mistake, they may request the annulment of the contract if the other contracting party has fallen into the same mistake, or was aware thereof, or could easily have detected it. 2. In contracts of donation, the annulment of the contract may be requested without regard to the other contracting party’s knowledge of or participation in the mistake.

Article (164) A contracting party may request the annulment of the contract if they have made a mistake as to the law and the conditions for a mistake of fact in accordance with the provisions of Article (163) of this Law are met, unless the law provides otherwise.

Article (165) A mere error in calculation or writing shall not affect the validity of the contract, but shall be corrected.

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Article (166) A person who has made a mistake may not invoke it in a manner that conflicts with the dictates of good faith, and shall be bound by the contract which they intended to conclude if the other contracting party has expressed their readiness to perform it. 2.Coercion (Ikrah)

Article (169) If coercion is exerted by a third party, the coerced party may not request the annulment of the contract unless it is proven that the other contracting party knew, or ought necessarily to have known, of such coercion. 3. Deception and Unfairness

Article (170) Deception is when one of the contracting parties deceives the other by fraudulent means, whether verbal or physical, which induces them to consent to that to which they would not have otherwise consented.

Article (171) Deliberate silence regarding a fact or circumstance constitutes deception if it is proven that the person so deceived would not have concluded the contract had they been aware of that fact or circumstance.

Article (172) If one of the contracting parties deceives the other and it is established that the contract was concluded with gross unfairness, the person so deceived may request the annulment of the contract.

Article (174) 1. If a contract results in gross unfairness to any person lacking or of limited legal capacity, or to an endowment authority, the aggrieved party may request the modification of their obligation or the obligation of the other party so as to remove the unfairness. 2. The fact that the contract was concluded on behalf of the aggrieved party by their legal representative in accordance with the law, or that it was authorized by the court, shall not preclude a challenge on grounds of gross unfairness. 3. No challenge shall be admissible solely on the grounds of unfairness in a contract concluded by way of auction.

Article (175) A contract shall be voidable if unfairness affects the property of a person interdicted for debt or a person suffering from a terminal illness, even where the unfairness is slight, provided that their debts exhaust their property, and the unfairness has neither been removed nor approved by the creditors.

Article (180) 1. Every contract shall have a subject matter to which it is attached. 2. The subject matter may consist of a tangible thing, a benefit, any other financial right, an act, or an abstention from an act. 3. The subject matter may be a future thing specified by its type and quantity. 4. The estate of a person who is alive may not be the subject matter of a contract, even if they have consented thereto, except in the cases stipulated by law.

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Article (181) 1. The subject matter shall meet the following conditions: a. It shall exist or be capable of existence. b. It shall not be outside the scope of dealing by its nature or by law, or contrary to public order or public morals. c. It shall be determined in itself, or by its type and quantity, or it shall be determinable. d. It shall not be impossible in itself at the time of the conclusion of the contract. 2. The contract shall be void if the subject matter does not meet the conditions set out in Paragraph (1) of this Article.

Article (182) If the parties to the contract do not agree on the quality of the subject matter of the contract and it cannot be inferred from custom or the nature of the transaction, the debtor is obliged to deliver the subject matter with a quality that is consistent with the lawful expectations of the parties, taking into account the nature of the subject matter, customs, and the amount of the consideration.

Article (183) If the subject matter of the disposition or its consideration is money, its amount and type shall be stated, and any increase or decrease in the value of such money at the time of performance shall have no effect.

Article (184) 1. A contract may include any condition agreed upon by the contracting parties, provided that such condition is not contrary to the law, public order, or public morals. 2. If a contract includes a condition that is contrary to the law, public order, or public morals, the condition alone shall be void, and either contracting party may request annulment of the contract if it is established that they would not have consented to the contract without that condition.

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Federal Decree by Law of 2025 Promulgating the Civil Transactions Law 43 Sixth: Cause

Article (185) 1. The cause is the direct purpose intended from the contract. 2. Every contract for which no cause is stated shall be presumed to have an existing and lawful cause, unless there is evidence to the contrary. 3. The cause stated in the contract shall be deemed to be the true cause, and the burden of proof shall lie on the person who claims otherwise. 4. If the contract has no cause, or the cause is contrary to the law, public order, or public morals, the contract shall be void. Seventh: The Valid, Void, and Voidable Contract 1. The Valid Contract

Article (186) A valid contract is a contract that is lawful in its essence and attributes, issued by a person having capacity, related to a subject matter capable of being governed thereby, has an existing, valid, and lawful purpose, and its attributes are valid. 2. The Void Contract

Article (187) 1. A void contract is a contract that is unlawful in its essence and attributes, due to the defect of any of its elements, its subject matter, its cause, or the form imposed by law for its conclusion. Such a contract shall not produce any effect and shall not be subject to ratification. 2. Any interested party may assert the nullity, and the court may declare it of its own motion. 3. A claim of nullity shall not be heard after the lapse of fifteen (15) years from the date of conclusion of the contract.

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Federal Decree by Law of 2025 Promulgating the Civil Transactions Law 44 3. The Voidable Contract

Article (188) 1. A contract shall be voidable if it is concluded by an unauthorized person (Fuduli) in respect of the property of another, or by an owner in respect of property to which another has a right, or by a person of limited legal capacity in respect of their property, where the disposition is capable of resulting benefit and detriment, or by a person under coercion, or if the law so provides. 2. A voidable contract shall produce its effects unless it is annulled. If it is annulled, it shall be deemed as if it never existed. If it is ratified, the ratification shall take effect retroactively from the date of its conclusion, without prejudice to the rights of third parties.

Article (192) 1. In cases of annulment or nullity of the contract, the contracting parties shall be restored to the position in which they were before the conclusion of the contract. If this is impossible, compensation may be awarded. 2. If a contract is annulled due to the limited capacity of a discerning minor, in such cases as permitted by law, such minor shall only be obliged to return the benefit that has accrued to them from the performance of the contract.

Article (194) A contract shall be non-binding with respect to one or both of its parties, notwithstanding its validity and effectiveness, where a right of rescission is stipulated in their favor without the need for mutual consent or litigation. Each party may independently rescind it if it is non- binding by its nature with respect to them or if such party has stipulated for themselves an option of rescission. Tenth: Options Affecting the Binding Nature of the Contract 1. Option of Stipulation

Article (195) In binding contracts that admit of rescission, the contracting parties or one of them may stipulate in the contract or thereafter an option of stipulation for themselves or for a third party for a period they agree upon. If they do not agree on a period, the court may determine it according to custom.

Article (196) If an option is stipulated for both contracting parties in financial commutative contracts, neither of the two counter-performances shall pass out of the ownership. Where the option is stipulated for one of them, their property shall not pass out of their ownership, nor shall the property of the other enter into their ownership.

Article (198) If the option is stipulated for both contracting parties, and one of them chooses to rescind, the contract shall be rescinded even if the other ratifies. If one chooses to ratify, the other shall retain their option for the duration of the option period.

Article (199) 1. Rescission or ratification shall be by any act or statement indicating either of them, whether expressly or implicitly. 2. If the period expires without choosing rescission or ratification, the contract shall become binding.

Article (200) For a rescission to be valid, it shall be chosen within the option period, and the other party shall be informed thereof if the rescission is effected by statement. Neither mutual consent nor litigation shall be required for rescission. As for ratification, knowledge of the other party shall not be required.

Article (202) An option of inspection shall be established in contracts that admit of rescission for the person in whose favor the disposition is made, even if not stipulated, where the subject matter of the contract has not been seen and has been determined by designation.

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Article (203) The option of inspection shall remain in force until the inspection is made within the agreed- upon period or until a cause of lapse occurs.

Article (204) The option of inspection shall not prevent the effectiveness of the contract; rather, it shall prevent its binding force with respect to the party for whom the option is stipulated.

Article (205) The option of inspection shall not lapse by waiver; however, it shall lapse upon the inspection of the subject matter of the contract and its acceptance, whether expressly or implicitly. It shall also lapse upon the death of its holder, the total or partial perishing of the subject matter of the contract, its defectiveness, or upon any disposition thereof by the option holder that does not admit of rescission or a disposition that creates a right for another.

Article (206) Rescission by the option of inspection shall be effected by any act or statement indicating it, expressly or implicitly, provided that the other contracting party is aware thereof. 3. Option of Selection

Article (207) It may be agreed that the subject matter of the contract shall be one of two or one of three things, and that the option of selection from among them shall vest in one of the contracting parties, provided that the consideration for each is stated and the period for the option is specified.

Article (209) The contract shall be non-binding on the party who has the right of option until this right is exercised. If the choice is made expressly or implicitly, the contract shall become effective and binding in respect of what has been chosen.

Article (212) If a person vested with the option of selection dies during the option period, their right shall pass to their heirs. 4. Option for a Defect

Article (213) The right to rescind a contract due to the option for defect is established in contracts that are susceptible to rescission, even if this option is not stipulated in the contract.

Article (214) For a defect to give rise to an option, it shall be latent, pre-existing, and have a material effect on the value of the subject matter of the contract, and the purchaser shall be unaware thereof, and the seller shall not have stipulated exemption from liability therefor.

Article (216) Rescission of a contract for a defect shall entail the restitution of its object to its owner and the recovery of what has been paid.

Article (217) The holder of the option for a defect may keep the subject matter of the contract and claim compensation for the diminution in price.

Article (219) 1. The legal effect of a valid contract is established in its subject matter and its consideration upon its conclusion, without being contingent on taking possession or any other matter, unless the law or the agreement provides otherwise. 2. The contracting parties shall perform the obligations and exercise the rights imposed on each of them by the contract.

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Article (221) 1. The contract shall be performed in accordance with its contents and in a manner consistent with the requirements of good faith. 2. The contract is not limited to obligating the contracting party to what is stated therein, but also includes its requisites in accordance with the law, custom, and the nature of the obligation. 3. In contracts prepared on standard forms to unify the regulation of contractual relationships, the conditions added to these forms shall prevail over the original conditions, even if the latter are not struck out, unless the law provides that the original conditions may not be contravened.

Article (222) In bilateral contracts, if the reciprocal obligations are due for performance, each of the contracting parties may refrain from performing their obligation if the other contracting party fails to perform what they have undertaken.

Article (223) If a contract is concluded by way of adhesion and contains unfair conditions, the court may modify these conditions or exempt the adhering party from them in accordance with the requirements of justice, and any agreement to the contrary shall be void.

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Article (224) If exceptional, general circumstances arise that could not have been foreseen at the time of contracting, and as a result of their occurrence, the performance of the contractual obligation becomes onerous for the debtor, threatening them with serious loss, the court may, depending on the circumstances and after balancing the interests of the parties, reduce the onerous obligation to a reasonable limit or rule for the rescission of the contract. Any agreement to the contrary shall be void. Second: Effects of the Contract with Respect to Third Parties

Article (225) Without prejudice to the provisions relating to inheritance, the effect of the contract shall extend to the contracting parties and the universal successor, unless it is apparent from the contract, the nature of the transaction, or a provision of law that this effect does not extend to the universal successor.

Article (226) If the contract creates personal obligations and rights related to a thing that is subsequently transferred to a particular successor, these obligations and rights shall be transferred to this successor at the time the thing is transferred, if they are among its requisites and the particular successor was aware of them at the time of the transfer of the thing to them.

Article (227) A contract shall not create an obligation upon a third party, but it may grant them a right.

Article (229) 1. A person may contract in their own name for obligations stipulated for the benefit of a third party, if they have a personal interest, whether material or moral, in the performance of these obligations. 2. A stipulation for the benefit of a third party results in the third party acquiring a direct right against the promisor, entitling them to demand fulfillment thereof, unless it is agreed otherwise, and the promisor may invoke against the beneficiary the defenses arising from the contract. 3. The stipulator may demand that the promisor perform what was stipulated for the benefit of the beneficiary.

Article (231) In a stipulation for the benefit of a third party, the beneficiary may be a future person, or a person who is not determined at the time of the contract, if it is possible to determine them at the time of performance of the stipulated obligation.

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Federal Decree by Law of 2025 Promulgating the Civil Transactions Law 55 Part Six Dissolution of the Contract

Article (232) If a contract is valid and binding, neither of the contracting parties may revoke the contract, nor modify or rescind it, except by mutual consent, litigation, or by virtue of a provision of law.

Article (233) 1. The contracting parties may mutually agree to rescind the contract after its conclusion. 2. Mutual rescission (Iqala) shall be subject to the general conditions of a contract. 3. Mutual rescission may be effected in respect of part of the subject matter of the contract in exchange for its corresponding consideration. 4. For the validity of mutual rescission of the entire subject matter of the contract, it shall be possible for the contracting parties to return to the state they were in before the contract. 5. As between the contracting parties, mutual recission shall have the effect of rescission; however, with respect to third parties, it shall constitute a new contract.

Article (235) It may be agreed that the contract shall be considered automatically rescinded without the need for a judicial judgment upon failure to perform the obligations arising therefrom. This

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Federal Decree by Law of 2025 Promulgating the Civil Transactions Law 56 agreement does not exempt the parties from giving notice, unless the contracting parties have expressly agreed to waive such notice.

Article (236) 1. In bilateral contracts, if a force majeure arises rendering performance of an obligation impossible, the corresponding obligations are extinguished, and the contract is rescinded automatically. 2. If the obligation becomes partially impossible, either of the contracting parties may invoke the extinguishment of the corresponding obligation or request the court to rescind the contract. 3. If the impossibility is temporary in continuing contracts, either of the contracting parties may invoke the extinguishment of the corresponding obligation or the modification of the contract, or request the court to rescind the contract.

Article (237) If the contract is rescinded or terminated, the contracting parties shall be restored to the state they were in before the contract. If this is impossible, compensation shall be awarded.

Article (238) If a contract is dissolved due to nullity, rescission, or for any other reason, and each contracting party shall return what they have received from the other, each of them may withhold what they have received as long as the other contracting party has not returned what they received from them or provided a guarantee for this return. Chapter Two Unilateral Act

Article (240) The provisions governing contracts shall apply to a unilateral act, except for those relating to the necessity of the existence of two corresponding wills for the creation of the contract, unless the law provides otherwise.

Article (241) If a unilateral act fulfils its essential element and conditions, the disposer may not revoke it, unless the law provides otherwise.

Article (242) Unless the law provides otherwise, if the unilateral act is: 1. A transfer of ownership, its effect shall not be established for the person to whom the disposition is made except by their acceptance. 2. A waiver that has the meaning of a transfer of ownership or a release from a debt; its effect shall be established for the person to whom the disposition is made unless they reject it in the session (majlis). 3. A pure waiver, its effect shall be established for the person to whom the disposition is made and shall not be reversed by their rejection.

Article (243) A promise is what a person imposes on themselves for another to be performed in the future, not by way of an obligation in property. It may concern a contract or an act, and the promisor is bound by their promise unless they die, become bankrupt, or become insolvent.

Article (245) 1. Subject to the provisions on liability contained in special legislations, the provisions of this Chapter shall apply to the liability arising from a harmful act committed by a natural or legal person. 2. Civil liability shall not prejudice criminal liability when its conditions are met, and the penalty shall have no effect on determining the scope of civil liability and assessing the compensation.

Article (248) A person whose property has been destroyed by someone is not entitled to destroy the property of that person; otherwise, each of them shall be liable for what they have destroyed.

Article (249) If a person proves that the harm arose from an external cause beyond their control, such as an act of God, a sudden accident, force majeure, the act of a third party, or the act of the injured party, they shall not be liable for compensation, unless the law or the agreement provides otherwise.

Article (250) A person who causes harm while acting in lawful self-defence of their person, honour, or property, or of the person, honor, or property of another, shall not be liable for such harm, provided that they do not exceed the necessary limits; otherwise, they shall be liable for compensation to the extent deemed appropriate by the court.

Article (252) Whoever causes harm to another to avert a greater imminent harm threatening them or another shall not be liable for compensation except to the extent deemed appropriate by the court, taking into account the requirements of justice.

Article (253) 1. If there are multiple persons responsible for the harm, each shall be liable in proportion to their share therein, and the court may rule that they be liable equally or jointly and severally. 2. The court may reduce the amount of compensation or not award it at all if the injured party contributed by their act to causing the harm or aggravated it.

Article (254) 1. Liability shall include moral harm. An infringement on another's freedom, honor, reputation, social standing, or financial status shall constitute moral harm. 2. Compensation may be awarded to spouses and relatives up to the second degree for the moral harm suffered as a result of the incapacity or death of the injured person. 3. The right to claim compensation for moral harm shall not be transferred to another unless its value has been determined by an agreement or a final judicial judgment.

Article (255) In all cases, compensation shall be assessed based on the extent of the loss suffered by the injured party and the loss of their profit, provided that this is a natural consequence of the harmful act.

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Article (257) Any condition providing for exemption or mitigation of liability arising from a harmful act shall be void. However, it shall be permissible to stipulate an aggravation of this liability, unless the law provides otherwise.

Article (259) 1. Compensation shall be required for bodily harm inflicted upon the person. 2. In cases where blood money (Diyah) or Arsh is due, the court may, upon the request of the injured party, award compensation if the death or injury results in material and moral harm not covered by the blood money (Diyah) or Arsh. Second: Destruction of Property

Article (264) 1. Whoever holds property held in trust (Amanah) thereafter commits usurpation thereof, disposes of it by way of trespass, or withholds it from its owner without right, finds it while its owner is unknown, or dies while its owner remains unknown, shall be liable for it by equivalent if it is a fungible, or by value if it is a non-fungible, as the case may be. 2. Whoever finds an item dropped on the road and takes it as their own, shall be obligated to return it to its owner if it still exists, or to return its equivalent or value if they have consumed it, even if such consumption occurred under compulsion. Part Three Liability for the Acts of Others

Article (266) 1. A principal shall be liable for the harm resulting from a harmful act committed by their subordinate, when it is committed by them in the performance of their duty or because of it. 2. The relationship of subordination exists, even if the principal is not free to choose their subordinate, when the principal has actual authority over them in supervision and direction.

Article (268) The guardian of a thing is any person who, whether personally or through another, exercises actual control over it. The owner of the thing shall be presumed to be its guardian, unless evidence is provided that guardianship has passed to another.

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Article (269) The guardian of an animal, even if not its owner, is liable for any harm caused by the animal, unless the guardian proves that the incident occurred due to an external cause for which they are not responsible.

Article (270) The guardian of a building, even if not its owner, is liable for the harm caused by the collapse of the building, even if it is a partial collapse, unless it is proven that the harm was due to an external cause for which they are not responsible or that the incident is not attributable to negligence in maintenance, old age of the building, or a defect in it.

Article (271) Whoever has under their control things that require special care to prevent their harm, or mechanical machinery, shall be liable for the harm caused by these things or machinery, except for what cannot be prevented, without prejudice to what is provided in this regard in special provisions.

Article (273) The use of public utilities is a right subject to the safety of others. Whoever uses this right and causes damage that could have been averted, shall be liable. Chapter Four Beneficial Acts Part One Unjust Enrichment

Article (275) 1. Whoever receives, by way of performance, what is undue to them shall be bound to make restitution thereof if it remains in existence, or to restore its equivalent or its value if it is no longer in existence.

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Federal Decree by Law of 2025 Promulgating the Civil Transactions Law 68 2. No restitution shall be due if the person who made the performance knew that they were paying what was not due, unless they were of limited legal capacity or were coerced into this performance.

Article (276) Restitution of the undue shall be permitted if performance has been made in fulfilment of an obligation whose cause has not been realized, or of an obligation whose cause has ceased after having been realized, or if the performance was in fulfilment of an obligation whose term has not yet fallen due and the performer was unaware of the existence of the term.

Article (277) No restitution of the undue may be claimed from the creditor if the performance was made by a person other than the debtor and it resulted in the creditor, acting in good faith, having divested themself of the instrument evidencing the debt, or of the securities obtained therefor, or having abandoned their claim against the true debtor until the period specified for its hearing has lapsed. In such case, the third party who made performance may have recourse against the true debtor for the debt and for compensation, where applicable.

Article (279) If the person who received what is undue lacks contractual capacity, they shall be bound only to the extent of the enrichment thereby obtained. Part Three Negotiorum Gestio (Fadalah)

Article (281) Negotiorum gestio (Fadalah) is established even if the negotiorum gestor, while managing their own affair, also manages the affair of another, due to a connection between the two affairs that makes it impossible to carry out either of them separately from the other.

Article (283) The negotiorum gestor shall continue the work they have begun until the principal is able undertake it personally. The negotiorum gestor shall also notify the principal of their intervention as soon as they are able to do so.

Article (285) 1. The principal shall be bound to perform the obligations undertaken by the negotiorum gestor on their behalf, to reimburse them for the obligations they have assumed, to refund them for the necessary and beneficial expenses justified by the circumstances, and to compensate them for any damage they have suffered due to carrying out the work. 2. A negotiorum gestor is not entitled to remuneration for their work unless it forms part of their professional activities.

Article (286) 1. If the negotiorum gestor dies, their heirs shall be bound by the same obligations binding the heirs of an agent upon termination of agency by the agent's death. 2. If the principal dies, the negotiorum gestor remains bound toward the heirs by the obligations to which they were bound toward their decedent. Part Four Payment of Another's Debt

Article (287) Whoever pays the debt of another at that person’s order shall have the right of recourse against the person who gave the order for what they have paid on their behalf, and shall legally substituted for the original creditor in claiming the debt, whether they stipulated the right of recourse or not.

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Article (288) Whoever pays the debt of another without that person’s order shall have no right of recourse against the debtor for what they have paid, unless authorized by the court, required by necessity, or it is customary that they act as the debtor’s representative. They shall have no right of recourse against the creditor unless the creditor has discharged the debtor from the debt, even after recovering their debt from the payer.

Article (290) 1. No claim arising from a beneficial act shall be admissible after the lapse of three (3) years from the day on which the creditor became aware of their right of recourse. 2. In all cases, no claim shall be admissible after the lapse of fifteen (15) years from the day on which the right of recourse arose. Chapter Five The Law

Article (291) Obligations that arise directly from the law shall be governed by the legal provisions that created them.

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Federal Decree by Law of 2025 Promulgating the Civil Transactions Law 72 Section Two Effects of the Obligation Chapter One General Provisions

Article (292) The debtor shall perform their obligation upon its maturity once its legal conditions are met. If the debtor refuses, performance shall be compelled against them.

Article (293) 1. Performance shall be voluntary if effected by payment or by its equivalent. 2. Performance shall be compulsory if effected in kind or by way of compensation.

Article (294) If a right lacks legal protection for any reason, it shall not be subject to compulsory enforcement and shall become a natural obligation incumbent upon the debtor. If the debtor voluntarily performs it, such performance shall be valid and shall not be regarded as a donation, an undue payment, or performance of an obligation that is not due. Chapter Two Means of Performance Part One Voluntary Performance First: Parties to Performance 1. The Party Effecting Performance

Article (295) 1. Subject to the provisions of Article (332) of this Law, performance may validly be effected by the debtor, their representative, or a third party. 2. The creditor may refuse performance by a third party if the debtor objects thereto and notifies the creditor of such objection.

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Article (297) Performance made to some creditors shall not be effective as against the other creditors if the debtor has been interdicted for debt and performance is made out of the interdicted property, or if the debtor is suffering from death-illness, and the performance is prejudicial to the remaining creditors. 2. The Person to Whom Performance is Made

Article (298) Performance shall be made to the creditor or their representative. A person who presents to the debtor a receipt issued by the creditor shall be deemed to have capacity to receive the debt, unless it has been agreed that performance is to be made to the creditor personally.

Article (300) If the creditor, without justification, refuses to accept a duly offered performance, or declares that they will not accept performance, the debtor shall put the creditor in default, and shall grant them a reasonable period within which the creditor shall fulfil their part to receive their right.

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Article (301) Once the creditor has been put in default, they shall bear the risk of loss of the subject matter of the obligation. The debtor shall have the right, with the court's permission, to deposit it at the creditor's expense, and to claim compensation for any harm they have suffered.

Article (302) If the subject matter of performance is a specific thing determined by its identity, and shall be delivered at the place where it is located, the debtor may, after putting the creditor in default, obtain permission from the court to deposit it. If this thing is immovable property or a thing intended to remain where it is, the debtor may request that it be placed under judicial sequestration.

Article (304) A deposit, or an equivalent measure, shall be permissible if the debtor is unaware of the creditor's identity or domicile, if the creditor lacks or has limited legal capacity and has no representative to accept performance on their behalf, if the debt is disputed among several persons, or if there are other serious reasons justifying such measure.

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Article (305) A formal offer of performance made by the debtor shall be equivalent to performance if it is followed by a deposit that complies with its legal requirements or by any similar measure, provided it is accepted by the creditor or validated by a final judgment.

Article (307) 1. If the debt is a thing determined by designation, the debtor may not perform by delivering another thing in substitution thereof without the creditor's consent, even if this substitute is of equal or higher value than the thing due. 2. If the debt is a thing not determined by designation, the debtor may perform by delivering its equivalent, even without the creditor’s consent.

Article (308) 1. The creditor shall not be compelled to accept partial performance of their right, unless the law or the agreement so provides. 2. If part of the debt is in dispute and the creditor accepts receipt of the acknowledged part, the debtor may not refuse performance of that part.

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Article (309) If the debtor is obliged to pay any expenses in addition to the debt, and the amount paid is insufficient to cover both the debt and those expenses, the amount paid shall be applied first to the expenses and then to the principal debt, unless otherwise agreed.

Article (310) 1. If several debts, of the same kind, are owed by the debtor to a single creditor, and the amount paid is insufficient to discharge them all, the debtor may, at the time of performance, designate the debt they intend to discharge, unless prevented by law or agreement. 2. If the debt is not designated in the manner set out in Paragraph (1) of this Article, payment shall be applied to the debt that has fallen due. If several debts have fallen due, it shall be applied to the debt most onerous to the debtor. If the debts are equally onerous, payment shall be applied to the debt designated by the creditor.

Article (311) 1. Performance shall be due immediately once the obligation has become definitively established in the debtor's liability, unless the law or the agreement provides otherwise. 2. In exceptional cases, and unless prohibited by law, the court may grant the debtor a reasonable time or allow performance by installments, if the debtor’s circumstances so require, and such deferment does not cause serious harm to the creditor.

Article (315) 1. A person who has performed a debt in whole or in part may request a receipt for what they have performed. 2. If the creditor refuses to deliver the debtor such receipt, the debtor may deposit the thing due by judicial deposit. Part Two Performance by Equivalent First: Performance by Consideration (Datio in Solutum)

Article (316) A debt may be discharged by consideration, as agreed upon by the parties to the contract, and such agreement shall be subject to the general provisions governing contracts provided for in this Law.

Article (317) The provisions governing sale shall apply to performance by consideration if the consideration consists of a specific thing given in the discharge of the debt. The provisions governing performance in discharge of a debt shall also apply.

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Article (318) The original debt, together with its securities, shall be extinguished by the performance by consideration, and the right of the creditor shall be transferred to the thing given in substitution. Second: Set-off

Article (319) Set-off is the extinguishment of a debt owed by one party to another by means of a debt owed by the latter to the former. It is either legal, taking effect by operation of law; contractual, effected by agreement of the parties; or judicial, effected by a judgment or order of the court.

Article (320) The following conditions are required for a legal set-off: 1. Both parties shall be both creditor and debtor of the other. 2. The two debts shall be identical in kind, description, maturity, and strength or weakness. 3. Its implementation shall not prejudice the rights of third parties, whether the cause of the two debts is the same or different.

Article (321) Legal set-off shall not take effect by operation of law in the following cases: 1. If one of the two debts consists of a thing that has been unlawfully taken from the possession of its owner and is required to be returned. 2. If one of the two debts consists of a thing that has been deposited or lent for use. 3. If the right of one of the creditors is not subject to attachment. 4. If one of the two debts is a claim for compensation for bodily injury.

Article (322) Contractual set-off shall be effected by agreement of the parties if any of the conditions for legal set-off is not met.

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Article (323) Judicial set-off shall be effected by a judgment or order of the court if its conditions are met and upon an original or incidental claim.

Article (325) If a debt is time-barred at the time set-off is invoked, this shall not prevent the set-off from taking effect, provided that the period barring the action had not been completed at the time the set-off became possible.

Article (326) If a debtor pays a debt against which they could have claimed set-off, they may not invoke the securities for that right to the detriment of a third party unless they were unaware of its existence and had a valid excuse for their ignorance.

Article (327) A set-off may not take effect to the detriment of rights acquired by a third party.

Article (328) If a third party effects an attachment against the debtor, and the debtor subsequently becomes a creditor of their creditor, they may not invoke set-off to the detriment of the attaching party.

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Federal Decree by Law of 2025 Promulgating the Civil Transactions Law 80 Third: Merger of Patrimonies (Confusion)

Article (329) 1. When the capacities of creditor and debtor in respect of the same debt are united in one person, the debt is extinguished to the extent of such merger. 2. If the creditor is an heir of the debtor, there shall be no merger of patrimonies; rather, the creditor shall stand, like the other creditors, in claiming their debt from the estate.

Article (330) If the cause that led to the merger of patrimonies ceases, and such cessation has a retroactive effect, the debt and its accessories shall be reinstated with respect to all persons concerned. Part Three Compulsory Performance First: Specific Performance

Article (331) 1. After being put in default, the debtor shall be compelled to perform their obligation by specific performance, whenever this is possible. 2. If specific performance would be excessively onerous for the debtor, the court may, upon the debtor's request, limit the creditor's right to monetary compensation, so long as no substantial prejudice is thereby caused to the creditor.

Article (334) 1. If the debtor is required to preserve a thing, to manage it, or to exercise care in the performance of their obligation, they shall have fulfilled the obligation if they exert in its performance all the care of an ordinary person, even if the intended result is not achieved, unless the law or the agreement provides otherwise. 2. In all cases, the debtor remains liable for fraud or gross fault.

Article (335) If the subject matter of the right is an obligation to refrain from an act and the debtor breaches it, the creditor may request the removal of what has been done in violation thereof, or may request the court’s authorization to carry out such removal at the debtor's expense. Second: Performance by Way of Compensation

Article (337) Compensation shall not be due unless the debtor has been formally put in default, except when the law or the agreement provides otherwise.

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Article (338) Notice to the debtor is not required in the following cases: 1. If the performance of the obligation becomes impossible or futile due to the debtor’s act. 2. If the subject of the obligation is compensation arising from an unlawful act. 3. If the subject of the obligation is the return of a thing known by the debtor to be stolen, or a thing they received without right, with knowledge thereof. 4. If the debtor declares in writing that they do not intend to perform their obligation.

Article (341) 1. All of the debtor's assets constitute a security for the performance of their debts. 2. All creditors are equal in this security, except those who have a right of priority according to the law. 3. The creditors may agree to determine the order of priority in the satisfaction of debts, provided that this does not conflict with the law. Second: Indirect Action

Article (345) If the creditors demand payment of their debts from a debtor whose debts have encompassed all of their property, they may not donate of their property or dispose of it for consideration, even without favouritism. The creditors may request a judgment declaring the non- enforceability of their disposition against them, and they may request the sale of their property and the pro-rata apportionment of its price in accordance with the law.

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Article (346) If a creditor claims that a debt encompasses the debtor's property, they shall only prove the amount of the debt owed by the debtor, and the debtor shall prove that they own property exceeding the value of the debt.

Article (347) The recipient of a disposition may avoid a lawsuit for non-enforceability if they deposit the price of the disposed property with the court's treasury in an amount not less than the value of the like.

Article (348) Once the non-enforceability of the disposition has been adjudged, the creditors who are harmed thereby shall benefit therefrom.

Article (349) 1. A lawsuit for non-enforceability of a disposition shall not be heard after the lapse of three (3) years from the day on which the creditor became aware of the reason for the non- enforceability of the disposition. 2. In all cases, a lawsuit for non-enforceability of a disposition shall not be heard after the lapse of fifteen (15) years from the date of the disposition. Fifth: Right of Retention

Article (352) Whoever retains a thing in exercise of the right of retention shall have priority over all other ordinary creditors in satisfying their right therefrom.

Article (354) An obligation shall be conditional if its existence or extinction is made to depend on a future, uncertain event.

Article (355) An obligation shall be void if it is made subject to an impossible condition or a condition that is contrary to public order or public morals.

Article (356) An obligation shall be void if it is made subject to a suspensive condition that makes its existence dependent solely on the will of the obligor.

Article (358) 1. The fulfilment of a resolutory condition shall result in the extinguishment of the obligation. The debtor shall be bound to return what they have taken; if return is impossible for a reason attributable thereto, they shall be liable for compensation. 2. Acts of management issued by the debtor shall remain effective despite the fulfilment of the resolutory condition.

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Federal Decree by Law of 2025 Promulgating the Civil Transactions Law 88

Article (360) 1. An obligation shall be for a term if its effectiveness or extinction is made to depend on a future, certain event. 2. An event is considered certain if its occurrence is inevitable, even if the time of its occurrence is unknown.

Article (361) An obligation deferred to a term shall not be effective until the term falls due. The creditor may, before the term falls due, take such measures as are necessary to preserve their right, including requesting security if they fear the debtor's insolvency and base this on a reasonable cause.

Article (362) If it is apparent from the obligation that the debtor will not perform it except upon their ability or ease (maysarah), the court shall set a suitable time for the maturity of the term, taking into account the debtor's current and future resources and what is required by the diligence of a prudent person in performing their obligation. Once their ability to perform is proven, the term shall lapse.

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Article (363) 1. If the debt is deferred, the debtor may pay it before the term falls due if the term is for their benefit, and the creditor shall be compelled to accept. 2. If the obligation is deferred and no term for its performance is specified, the court shall determine it at the request of the creditor or the debtor, according to custom and the nature of the transaction. 3. If the debtor pays the debt before the term falls due and then the thing received becomes subject to entitlement in favor of a third party, the debt shall revert to being deferred as it was.

Article (364) If the term is for the benefit of either of the parties, they may waive it by their unilateral will.

Article (366) The debtor’s right to the term shall lapse in the following cases: 1. If they are adjudged bankrupt, insolvent, or placed under interdiction. 2. If they fail to provide the agreed security for the debt. 3. If the agreed security for the debt is diminished by an act attributable thereto or by a cause beyond their control, unless they promptly complete it.

Article (367) 1. If an obligation is coupled with a suspensive term, it shall not be effective except upon the expiry of the term.

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Federal Decree by Law of 2025 Promulgating the Civil Transactions Law 90 2. The creditor may, even before the expiry of the term, take such measures as are necessary to preserve their rights, and they may demand security if they fear the debtor's bankruptcy or insolvency and base this on a reasonable cause.

Article (368) Upon the expiry of a resolutory term, the obligation shall be extinguished, without such extinguishment having a retroactive effect. Chapter Four Multiplicity of the Subject Matter of the Obligation Part One Alternative Obligation

Article (369) An obligation shall be an alternative if its subject matter includes multiple things, and the debtor is fully discharged by performing one of them. The choice shall belong to the debtor, unless the law or the agreement provides otherwise.

Article (371) If the choice belongs to the debtor, and it then becomes impossible for them to perform all of the multiple things that constitute the subject matter of the obligation. The impossibility is attributable thereto, even with respect to one of these things, they shall be bound to pay the value of the last thing the performance of which became impossible. Part Two Facultative Obligation

Article (373) Solidarity among creditors or among debtors shall not be presumed; rather, shall arise from a provision of law or by agreement. First: Joint and Several of Creditors

Article (374) 1. The joint and several creditors, jointly or severally, may claim the entire debt from the debtor. 2. If one of the joint and several creditors demands performance from the debtor, the debtor may not plead against this creditor defences personal to other creditors, but they may

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Federal Decree by Law of 2025 Promulgating the Civil Transactions Law 92 plead against the demanding creditor defences personal to this creditor, and defences that are common to all creditors.

Article (375) Whatever one of the joint and several creditors receives from the debt shall be deemed to be the right of all the creditors jointly, and they shall share therein proportionately. The pro rata distribution shall be in equal shares, unless the law or the agreement provides otherwise.

Article (376) If there is solidarity among the creditors, the debtor may pay the debt to any of them, unless one of them has served a notice on the debtor not to pay their share to a specific creditor, provided that no prejudice results to the debtor.

Article (377) If the debtor is discharged from their obligation vis-à-vis one of the joint and several creditors for a reason other than performance, their liability shall not be discharged vis-à-vis the other creditors except to the extent of that creditor's share.

Article (378) If one of the joint and several creditors performs an act that is prejudicial to the other creditors, such act shall not be effective against them.

Article (379) Solidarity among creditors shall not prevent the division of the debt among the heirs of any of them. Solidarity in respect of the entire debt shall pass to each heir in proportion to their share in the estate, unless the debt is indivisible, in which case solidarity shall pass to each heir in respect of the entire debt.

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Federal Decree by Law of 2025 Promulgating the Civil Transactions Law 93 Second: Joint and Several Liability of Debtors

Article (380) Solidarity among debtors shall be established even if the debt of one of them is deferred, or subject to a condition, or associated with a description that affects it, while the debt of the other is immediate or free from such a description.

Article (381) If one of the jointly and severally debtors performs the debt, their liability and that of the other debtors shall be discharged.

Article (382) 1. The creditor may claim their debt from all the joint and several creditors or from any of them, taking into account any attribute affecting their relationship with each debtor that has an effect on the debt, and a claim against one of them shall not preclude a claim against the others. 2. A joint and several debtor may not invoke the defenses personal to other debtors, but they may invoke the defenses personal thereto and the defenses common to all the debtors.

Article (384) If the creditor agrees with one of the joint and several debtors on performance by consideration (datio in solutum), the liability of the other debtors shall be discharged, unless the creditor has reserved their right against all of them.

Article (386) 1. In cases where the creditor releases one of the joint and several debtors, whether the release is from the debt or from the solidarity, the other debtors may have a right of recourse against that debtor for their share in the debt, within the limits of the share of any bankrupt or insolvent among them. 2. If the creditor exempts the debtor they have released from all liability for the debt, the creditor shall bear the share of this debtor in the share of the bankrupt or insolvent debtor.

Article (387) 1. The barring of a claim by the lapse of time with respect to one of the joint and several debtors shall not benefit the other debtors except to the extent of that debtor's share. 2. The creditor may not invoke the suspension or interruption of the lapse of time with respect to one of the joint and several debtors against the other debtors.

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Article (390) 1. If one of the joint and several debtors acknowledges the debt, this acknowledgment shall not take effect against the other joint and several debtors. 2. If one of the joint and several debtors refuses to take an oath directed to them by the creditor, or directs the oath to the creditor and the creditor takes it, the other joint and several debtors shall not be prejudiced thereby. 3. If the creditor directs an oath to one of the joint and several debtors and they take it, the other joint and several debtors shall benefit therefrom.

Article (391) If a judgment is rendered in favour of the creditor against one of the joint and several debtors, such judgment shall not be invoked against the others; however, they shall benefit from it if it is rendered in favour of the debtor, unless the judgment is based on a ground personal to that debtor.

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Article (393) If one of the joint and several debtors is the principal debtor and the other debtors are guarantors; they shall have no right of recourse against them for anything after performing the debt. Part Two Joint Debt

Article (396) If one of the co-creditors receives their share in the joint debt and then disposes thereof or consumes it, the other co-creditors may have recourse against them for their shares therein. If it perishes or is destroyed while in their possession without any fault or negligence on their part, they shall not be liable for the shares of their co-creditors therein, and they shall be deemed to have received their share, while the remainder of the debt in the liability of the debtor shall belong to their other co-creditors.

Article (399) One of the co-creditors may grant their share in the debt to the debtor or release them therefrom, and they shall not be liable for the shares of their co-creditors in what they granted or released.

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Federal Decree by Law of 2025 Promulgating the Civil Transactions Law 98

Article (400) One of the co-creditors in a joint debt may enter into a settlement for their share therein. If the consideration for the settlement is of the same kind as the debt, the others may either share them in what has been received or pursue the debtor. If the consideration for the settlement is of a different kind, they may pursue the debtor or the settling co-creditor, and the settling co-creditor may pay them their share in what has been received or their share in the debt.

Article (401) 1. No one of the co-creditors in a joint debt may, on their own, defer the debt without the consent of the other co-creditors. 2. However, a co-creditor in a joint debt may defer their share without the consent of the others, and in this case, that co-creditor shall not be entitled to share with them in what they receive from the debt. Part Three Indivisibility of the Obligation

Article (402) An obligation shall be indivisible in the following cases: 1. If its subject matter, by its nature, does not admit division. 2. If it appears from the purpose intended by the contracting parties that the obligation may not be performed in divisible parts.

Article (405) A creditor may assign their right to another person, unless this is precluded by a provision of law, the agreement of the contracting parties, or the nature of the obligation. The validity of the assignment shall not be conditional upon the debtor’s consent.

Article (406) A right may only be assigned to the extent that such right is capable of attachment.

Article (407) An assignment of right shall not be enforceable against the debtor or a third party unless it is accepted by the debtor or notified thereto. However, its enforceability against a third party by the debtor's acceptance requires that such acceptance be of a fixed date.

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Article (408) The assignee creditor may, before the notification of the assignment of the right or its acceptance, take such measures as are necessary to preserve the right that has been transferred thereto.

Article (411) 1. If the assignment of right is for consideration, the assignor shall warrant only the existence of the assigned right at the time of the assignment, unless otherwise agreed. 2. If the assignment of right is without consideration, the assignor shall not warrant even the existence of the right.

Article (412) 1. The assignor shall not warrant the solvency of the debtor, unless there is a specific agreement for this warranty. 2. If the assignor warrants the solvency of the debtor, this warranty shall extend only to the solvency at the time of the assignment, unless otherwise agreed.

Article (414) The assignor shall be liable to compensate the assignee for the damage sustained due to their personal acts, even if the assignment was gratuitous, and any condition to the contrary shall be void.

Article (415) The debtor may plead, as against the assignee, the defences that they could have raised against the assignor at the time the assignment of right became effective against them, and they may also plead defences arising from the assignment contract.

Article (416) If multiple assignments are made for the same right, the assignment that first becomes effective against third parties shall prevail.

Article (418) 1. A debtor may transfer their obligation to another person, unless this is precluded by a provision of law, the agreement of the contracting parties, or the nature of the obligation. 2. An assignment of debt shall not be concluded except with the consent of both the assignee and the creditor.

Article (420) 1. The original debtor shall have the right to require the assignee to perform payment to the creditor, unless otherwise agreed. 2. The assignee may refrain from performing the debt to the creditor if the original debtor has not performed what they undertook towards the assignee under the assignment contract.

Article (421) 1. The assigned debt shall retain its securities, notwithstanding any change in the person of the debtor. 2. A guarantor, whether real or personal, does not remain bound to the creditor unless the guarantor has consented to the assignment.

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Article (422) The original debtor warrants the solvency of the assignee at the time of the creditor's approval of the assignment, unless otherwise agreed.

Article (424) 1. The sale of a mortgaged property by a registered mortgage shall not entail the transfer of the debt secured by the mortgage to the liability of the purchaser, unless there is an agreement to that effect. 2. If the seller and the purchaser agree to assign the debt, the consent of the mortgagee creditor shall be obtained before the registration of the sale contract, unless the special legislations provide otherwise. Chapter Six Extinction of the Obligation Part One Release

Article (425) An obligation shall be extinguished if the creditor voluntarily releases their debtor. The release shall be effected when it comes to the knowledge of the debtor, and shall be revoked by the debtor's rejection thereof. If the debtor dies before acceptance, the debt shall not be taken from their estate.

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Article (428) An obligation shall be extinguished if the debtor proves that performance has become impossible for them due to a foreign cause beyond their control. Part Three Barring of a Claim by the Lapse of Time

Article (429) A right shall not be extinguished by the lapse of time, but a claim thereon shall not be admissible against a denier upon the lapse of fifteen (15) years without an accepted excuse, except for the cases where the law specifies another period and the cases stipulated in this Law.

Article (430) 1. A claim for any periodic recurring right shall not be admissible against a denier upon the lapse of five (5) years without an accepted excuse. 2. A claim for the due quarter against a holder in bad faith shall not be admissible against a denier upon the lapse of fifteen (15) years without an accepted excuse.

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Article (431) A claim shall not be admissible upon denial after the lapse of three (3) years without an acceptable excuse for the following rights: 1. The rights of physicians, pharmacists, lawyers, engineers, experts, professors, teachers, and brokers, provided that these rights are due to them for their professional work and incurred expenses. 2. Amounts due to be refunded in respect of taxes and duties paid unduly, without prejudice to the provisions contained in special laws.

Article (432) A claim shall not be admissible upon denial after the lapse of two (2) years without an acceptable excuse for the following rights: 1. The rights of merchants and manufacturers for items supplied to persons who do not trade in such items, and the rights of hotel and restaurant owners for the cost of accommodation and food and for all they have spent on behalf of their customers. 2. The rights of workers, servants, and employees for daily and non-daily wages and for the price of supplies they have provided.

Article (435) A claim shall not be admissible if it is left unpursued by a predecessor then by a successor after them and the total of the two periods reaches the period prescribed for the non-hearing thereof.

Article (436) The period that bars a claim shall be calculated in days, and the first day shall not be counted. The period shall be completed upon the expiry of the last day thereof, unless it is an official holiday, in which case it shall extend to the following day.

Article (437) 1. The lapse of time barring a claim shall be suspended whenever there is an acceptable excuse that makes it impossible to claim the right, and the period during which such impediment exists shall not be counted in the prescribed period. 2. The lapse of time barring a claim shall be suspended in respect of a person who lacks legal capacity, or an absent or missing person, or in respect of any person prevented from disposing of their property by law or a judicial judgment, unless any of them has a legal representative.

Article (439) An express or implied acknowledgment by the debtor of the right shall interrupt the lapse of time prescribed for the barring of a claim.

Article (440) The period prescribed for the barring of a claim shall be interrupted by a judicial claim or by any judicial proceeding taken by the creditor to assert their right.

Article (441) 1. If the period prescribed for the barring of a claim is interrupted, a new period, equal to the original period, shall commence. 2. If a judgment is rendered for the debt and the judgment has acquired the force of res judicata, or if the debt is of a kind in respect of which a claim is barred after one year and the period is interrupted by the debtor's acknowledgment, the new period for the barring of the claim shall be fifteen (15) years, unless the debt for which judgment is rendered includes periodic recurring obligations that do not fall due for performance until after the judgment is issued.

Article (442) The barring of a claim in respect of a right by the lapse of time entails the barring of a claim relating to its accessories, even if the period prescribed for the barring of a claim for these accessories has not been completed.

Article (443) 1. A waiver of the defense of the barring of a claim by the lapse of time shall not be valid before the right to invoke such defense is established, nor may it be agreed that a claim shall not be admissible after a period other than that specified by law. 2. Any person who has the capacity to dispose of their rights may expressly or impliedly waive the defense after the right to invoke it has been established, provided that such waiver shall not be enforceable against creditors if it is made to their detriment.

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Article (444) 1. The court may not rule on its own motion on the non-admissibility of a claim; such ruling shall be made only upon a request by the debtor or by an interested party among the litigants. 2. The defence may be raised at any stage of the lawsuit, unless it is apparent from the circumstances that the person entitled to invoke it has expressly or impliedly waived it. Book Two Nominate Contracts Section One Contracts of Transfer of Ownership Chapter One Contract of Sale Part One Definition and Elements of the Contract of Sale

Article (445) A sale is a contract whereby the seller undertakes to transfer to the purchaser ownership of the subject matter of the sale or any other financial right, in consideration of a monetary price.

Article (447) 1. If the sale is by "sample or model", the subject matter of the sale shall conform thereto. 2. If it appears that the subject matter of the sale does not conform to the sample or model, the purchaser shall have the option to accept or reject it. 3. If the sample or model is damaged, destroyed, or lost while in the possession of one of the parties to the sale, the statement of the other party regarding conformity or non- conformity shall prevail, unless the opposing party proves otherwise.

Article (450) In a sale on approval, the rules of sale shall apply as from the date of the sale.

Article (451) If the purchaser loses their legal capacity before they approve the sale, the guardian, tutor, curator, as the case may be, shall choose what is in their best interest, in compliance with the conditions and provisions stipulated by law.

Article (452) If the purchaser dies before choosing the subject matter of the sale, and a creditor whose debt exhausted all the purchaser’s property, the right of trial shall pass to the creditor. Otherwise, this right shall pass to the heirs. If the heirs agree on the approval or rejection of the sale, their agreement shall be binding. If some approve the sale and others reject it, rejection shall prevail.

Article (453) The purchaser may not use the subject matter of the sale during the trial period except to the extent required for the purpose of the trial according to custom. If they exceed such use in a manner not intended for trial, the sale shall become binding.

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Federal Decree by Law of 2025 Promulgating the Civil Transactions Law 111

Article (454) The fruits of the subject matter of the sale during the trial period shall belong to the seller, and the expenses thereof shall be borne thereby, unless the fruits form part of the subject matter of the sale in which case they shall belong to the purchaser if the purchase is completed.

Article (462) 1. If an immovable property owned by a person lacking or of limited legal capacity is sold, and the sale involves gross lesion, the seller may request completion of the price to the value of the like. 2. The assessment of whether the lesion is gross or not shall be made by appraising the immovable property according to its market value at the time of the sale.

Article (463) 1. A claim for completion of the price due to gross lesion shall not be admissible after the lapse of three (3) years from the time of attaining legal capacity or from the day of the death of the owner of the sold immovable property. 2. The claim for completion of the price due to gross lesion shall not prejudice a third party acting in good faith who has acquired a real right (jus in rem) over the sold immovable property.

Article (464) 1. An increase in the price by the purchaser after the contract shall attach to the original contract if accepted by the seller, and the agreed price together with the increase shall constitute the consideration for the entire subject matter of the sale. 2. A reduction of the agreed price by the seller after the contract shall likewise attach to the original contract if accepted by the purchaser, and the remainder shall thereafter constitute the agreed price.

Article (465) 1. The price shall be due for immediate payment, unless the parties agree that it shall be deferred or paid in instalments over a specified term.

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Federal Decree by Law of 2025 Promulgating the Civil Transactions Law 114 2. If the price is deferred or to be paid in instalments, the term shall commence from the date of delivery of the subject matter of the sale, unless the parties agree otherwise. Part Two Effects of Sale First: Seller's Obligations 1. Transfer of Ownership

Article (466) 1. The ownership of the subject matter of the sale shall be transferred to the purchaser as soon as the sale is concluded, unless the law or the agreement provides otherwise. 2. Each of the parties to the sale shall proceed to perform their obligations, except for those that are deferred. 3. The seller is obligated to do what is necessary to transfer ownership of the subject matter of the sale to the purchaser and to refrain from any act that would render such transfer of ownership impossible or difficult.

Article (467) If the sale is a lump-sum sale (Juzāf), ownership shall be transferred to the purchaser in the same manner as it is transferred in respect of a specifically designated thing. A sale shall be deemed lump sum even if the determination of the price is dependent on the measurement of the subject matter of the sale.

Article (471) The sale of land does not include the crops growing thereon, unless a condition or custom provides otherwise.

Article (472) The sale of a tree, whether independently or as appurtenant to the land, shall include the fruit born thereon if it has not been pollinated, or if it has not been set, in whole or for the most part. If it has been pollinated or has set, in whole or for the most part, it shall not be included in the contract, unless otherwise stipulated by a condition or established by custom as being appurtenant to the tree. Where the fruit has been pollinated or has set only as to one-half thereof, each part shall be governed by the foregoing rule applicable thereto.

Article (473) A contract for crops that are harvested by cutting does not include subsequent growth, unless a condition or custom provides otherwise.

Article (474) If the seller delivers the subject matter of the sale to the purchaser in a proper manner, they shall no longer be liable for any damage or loss occurring to the subject matter of the sale thereafter.

Article (476) A claim for rescission of the contract, or reduction or completion of the price, shall not be admissible if one year has elapsed from the date of delivery of the subject matter of the sale.

Article (477) Delivery is effected by placing the subject matter of the sale at the disposal of the purchaser in such a way as to enable them to take possession of it and benefit from it without hindrance, even if actual possession does not occur, as long as the seller has informed them thereof. Delivery shall take place in a manner consistent with the nature of the subject matter of the sale, and in accordance with the agreement or established custom.

Article (480) If the subject matter of the sale is in the possession of the purchaser before the sale, under any capacity or for any reason, such possession shall be deemed a delivery, unless otherwise agreed.

Article (483) 1. The seller warrants that the subject matter of the sale is free from any third-party right that may be asserted against the purchaser, if the cause of such entitlement claim predates the contract of sale. 2. The seller warrants the subject matter of the sale if the entitlement is based on a cause subsequent to the sale and arising from the seller’s own act.

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Article (485) The purchaser's right to the warranty shall be established even if they, acting in good faith, acknowledge the third party's right or conclude a settlement with them in respect thereof without awaiting a judicial ruling to be issued, provided that the purchaser had notified the seller of the claim in due time and called upon them to substitute for them therein, and the seller failed to do so.

Article (489) 1. The contracting parties may agree to increase the warranty against entitlement. 2. Any condition that excludes or reduces the warranty shall be void. 3. The purchaser's knowledge that the subject matter of the sale is not owned by the seller shall not prevent them from recovering the price in the event of entitlement.

Article (490) 1. If the entitlement is established on the basis of the purchaser's admission or their refusal to take an oath, they may not have recourse against the seller. 2. The purchaser may have recourse against the seller under the warranty, even if entitlement is established by their admission or refusal to take an oath, provided that the purchaser acted in good faith and had notified the seller of the entitlement claim in due time and invited them to join the proceedings, and the seller failed to do so, unless they prove that the entitled party was not justified in their claim.

Article (491) 1. If entitlement is claimed after the subject matter of the sale has perished while in the purchaser's possession, the purchaser shall be liable to the entitled party for its value as at the date of sale, and shall have recourse against the seller for the price.

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Federal Decree by Law of 2025 Promulgating the Civil Transactions Law 123 2. If the value for which the purchaser is liable exceeds the agreed price, they shall be entitled to recover the difference, along with compensation for damages due under Clause (5) of

Article (492) The entitled party may claim from the purchaser the benefit derived from the fruits or yield of the subject matter of the sale, after deducting the production expenses required, and the purchaser shall have recourse against the seller for whatever they have paid to the entitled party. 4. Warranty for Latent Defects

Article (493) 1. A sale is deemed to be concluded on the basis that the subject matter of the sale is free from defects. 2. The general rules governing the option for defect shall apply to the contract of sale, with due regard to the provisions of the following Articles.

Article (496) The seller shall be liable under the warranty if, at the time of delivery, the subject matter of the sale lacks the qualities that the seller guaranteed to the purchaser to exist therein, or if the subject matter of the sale has a defect that diminishes its value or its utility for the intended purpose, as stated in the contract or as apparent from the nature of the thing or the purpose for which it was prepared. The seller shall be liable for this defect even if they are unaware of its existence.

Article (498) The seller shall not be liable for defects known to the purchaser at the time of the sale, or which the purchaser could have discovered by themselves had they inspected the subject matter of the sale with the care of an ordinary person, unless they prove that the seller affirmed that the subject matter of the sale was free from such defect, or proves that the seller deliberately concealed the defect by way of fraud.

Article (499) If the purchaser disposes of the subject matter of the sale as an owner after becoming aware of the latent defect, their option for defect shall be forfeited.

Article (500) If the subject matter of the sale perishes due to a latent defect while in the purchaser's possession or is consumed before they become aware of the defect, they may recover from the seller the reduction in price caused by the defect.

Article (501) 1. If a new defect occurs in the subject matter of the sale while in the purchaser's possession, they may not return it on the basis of the latent defect, but may only demand from the seller a reduction in the price, unless the seller agrees to take it back with the new defect. 2. If the new defect ceases, the purchaser's right to return the subject matter of the sale to the seller on the basis of the latent defect shall be restored.

Article (502) 1. If the seller warrants the fitness of the subject matter of the sale for use for a specified period and a defect appears in the subject matter of the sale during that period, the purchaser shall notify the seller of this defect within one month from its appearance, unless a longer period is agreed upon.

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Federal Decree by Law of 2025 Promulgating the Civil Transactions Law 126 2. If the seller fails to repair the defect, the purchaser may request rescission of the contract with compensation, or retain the subject matter of the sale and claim compensation for the damage suffered due to the defect.

Article (505) The purchaser's right to return the subject matter of the sale for a defect shall not be forfeited solely due to a change in its value.

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Article (507) The risk of a subject matter of the sale returned for a defect shall pass from the purchaser to the seller upon the seller’s consent to take it back from the purchaser, even if actual delivery has not taken place, or upon the establishment before the court of the defect warranting return, even if no judgment ordering the return has been rendered, provided that the seller is present. If the seller is absent, the risk shall not pass thereto except upon the issuance of a judgment ordering the return of the subject matter of the sale.

Article (509) The claim for warranty in respect of a defect subsists even if the subject matter of the sale has perished for any reason whatsoever.

Article (511) The purchaser shall pay the price upon conclusion of the contract and before taking delivery of the subject matter of the sale or demanding it, unless otherwise agreed.

Article (512) 1. The seller may withhold the subject matter of the sale until they receive the price due to them, even if the purchaser has offered a pledge or a guarantee. 2. If the subject matter of the sale perishes while in the seller's possession while they are withholding it, the loss shall be borne by the purchaser, unless the perishing was caused by the act of the seller. 3. If the seller agrees to defer the price, their right to withhold the subject matter of the sale shall be forfeited, and they shall be obliged to deliver it to the purchaser.

Article (513) 1. If the purchaser takes possession of the subject matter of the sale before paying the due price, in the presence of the seller and without objection on their part, this shall be deemed consent to delivery. 2. If the purchaser takes possession of the subject matter of the sale before paying the due price, without the seller's consent, the seller may recover the subject matter of the sale. If the subject matter of the sale perishes or becomes defective while in the purchaser's possession, they shall be deemed to have taken delivery, and the seller may recover the price and claim compensation from the purchaser, where applicable.

Article (514) The destruction of the subject matter of the sale by the purchaser, even without intent, shall be deemed to constitute taking possession thereof.

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Article (515) If the purchaser was unaware of the location of the subject matter of the sale at the time of the contract and then becomes aware thereof, they shall have the option to either rescind the sale or to affirm it and take delivery of the subject matter of the sale at its place of existence.

Article (517) If the purchaser takes possession of an item on approval for purchase and it perishes or is lost while in their possession, and the price has been specified, they shall be bound to pay it. If the price has not been specified, the purchaser shall not be liable except in cases of transgression or negligence.

Article (519) If a specific date for payment of the price is set in the sale, and it is stipulated therein that if the purchaser does not pay the price on that date, there shall be no sale between them, and the purchaser does not pay it while the subject matter of the sale is remains in the seller's possession, the sale shall be deemed to be legally rescinded.

Article (522) Salam is a sale with deferred delivery for an advance price.

Article (525) It shall not be valid for both the Salam capital and the subject matter of the Salam to consist of two foodstuffs or currencies; in cases other than foodstuffs, it shall be sufficient that they differ in genus and benefit.

Article (526) If the delivery date for the subject matter of the Salam arrives, it shall be delivered at the agreed-upon location. If the seller and purchaser differ on the place of delivery of the Salam subject matter, preference shall be given to the party who alleges delivery at the place where the contract was concluded. If neither of them alleges this, it shall be delivered in accordance with the custom prevailing in this matter.

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Article (527) If the seller and the purchaser disagree on the quantity of the Salam subject matter, or on the term of its delivery, and neither has evidence, the statement of the one preference shall be given to the party who alleges the quantity prevailing among people shall be accepted. If no prevailing quantity exists, they shall be judged by the average quantity.

Article (528) The settlement of the Salam subject matter shall be made in its own genus. By way of exception, it may be agreed that settlement be effected in a different genus, subject to the following conditions: 1. The substitute consideration by which settlement is made shall be delivered immediately. 2. This substitute consideration shall be of a kind that may validly serve as the Salam capital. 3. The subject matter of the Salam shall not be foodstuff.

Article (532) If a person sells the property of another without their permission, the sale shall not be effective as against the owner except by their ratification.

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Article (533) 1. If the owner ratifies the sale, the contract shall become effective with respect thereto and binding with respect to the purchaser. The contract shall likewise become effective if ownership of the subject matter of the sale passes to the seller after the conclusion of the contract. 2. If the purchaser was unaware that the subject matter of the sale was not owned by the seller at the time the contract was concluded, the purchaser may demand the annulment of the contract and claim compensation, even if the seller was in good faith. Third: Takhāruj

Article (534) Takhāruj is the sale by an heir of their share in an estate, after the death of the decedent, to one or more other heirs for a known consideration, even if the assets of the estate are not specified.

Article (536) If the sale is effected without itemizing the components of the estate, the seller shall not warrant to the purchaser anything other than the existence of the estate and the confirmation of their hereditary share therein.

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Article (537) 1. The purchaser shall follow the procedures required by law for the transfer of each right included in the hereditary share subject to the Takhāruj. 2. Takhāruj shall not be effective against a third party until the purchaser has completed the procedures required by law for the transfer of each right included in the hereditary share subject to the Takhāruj. Fourth: Sale During Death Illness

Article (538) 1. Death illness is the illness in which a person is unable to pursue their usual activities, and in which death is predominant, and which is connected with death. 2. Cases which a person is surrounded by a danger of death and in which death is the most likely outcome shall be deemed equivalent to death illness, even if the person is not suffering from a disease.

Article (540) A sale by a sick person to a non-heir for less than the value of the like, even with minor unfairness, shall not be effective as against the creditors if the estate is fully encumbered with debts, and the purchaser may pay the price of the like, otherwise the creditors shall have the right to rescind the sale.

Article (544) By way of exception to the provisions set forth in Articles (542) and (543) of this Law, the representative, intermediary, or expert may purchase for themselves if authorized by the principal or the relevant person. Sixth: Sale of Disputed Rights

Article (545) 1. A right is considered disputed if a lawsuit has been instituted regarding its subject matter or if a serious dispute has arisen concerning it. 2. If a disputed right is sold, the person disputing with the seller may recover it from its purchaser if they refund them the price paid and the expenses incurred. 3. The right of recovery shall be extinguished upon the lapse of sixty (60) days from the date on which the recovering party became aware of the sale.

Article (546) The provisions of Article (545) of this Law shall not apply in the following cases: 1. If the disputed right is part of a group of properties sold en bloc for a single price. 2. If the disputed right is held in common among heirs or owners and one of them sells their share to another. 3. If a debtor assigns a disputed right to a creditor in settlement of a debt due therefrom. 4. If the disputed right encumbers an immovable property and the right is sold to the possessor of the property.

Article (548) Barter is a contract by which each of the contracting parties undertakes to transfer to the other, by way of exchange, the ownership of property other than money.

Article (549) The addition of a sum of money to one of the two exchanged items for balancing purposes shall not remove from the barter its nature, if the exchanged items have different values in the estimation of the contracting parties.

Article (550) The expenses of the barter contract, delivery expenses, and any other expenses shall be borne equally by the two parties to the barter, unless there is an agreement or a custom to the contrary.

Article (551) The provisions of the sale contract shall apply to the barter contract to the extent permitted by the nature of the barter, and each of the two parties to the barter shall be deemed a seller of the thing they exchanged and a purchaser of the thing they received in exchange.

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Federal Decree by Law of 2025 Promulgating the Civil Transactions Law 139 Chapter Three Gift Contract Part One Definition and Conditions of the Gift Contract

Article (552) A gift is a contract whereby the donor undertakes, during their lifetime, to transfer the ownership of the gifted property to the donee without consideration.

Article (553) 1. If the donor stipulates a consideration from the donee, the contract shall be a commutative contract to which the provisions governing commutative contracts shall apply, according to the nature of the consideration. 2. The consideration in a gift subject to consideration shall be known, otherwise either party may rescind the contract, even after the donee has taken possession of the gifted property, unless the parties agree on specifying the consideration before rescission. 3. If the gifted property perishes or is disposed of by the donee before rescission, the donee shall be bound to return its value as of the date of taking possession.

Article (554) 1. A gift is concluded by offer and acceptance and is completed by taking possession. 2. If the gifted property is immovable, its gift shall not be valid unless documented in accordance with the applicable legislation. 3. If the gifted property is movable, the gift shall not be valid unless documented in accordance with the applicable legislation, or by taking possession if such legislation does not so require.

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Article (555) A contract of gift shall not be effective in the following cases: 1. If the gifted property is not owned by the donor, unless ratified by the owner. 2. A gift made by a debtor whose debt has encompassed their property, unless ratified by the creditor.

Article (557) A partner may validly gift their share in an undivided property to their partner or to a third party is valid, whether the gifted property is immovable or movable, and even if the gifted property is divisible.

Article (558) It shall be a condition for the validity of a gift that the donor is not legally interdicted from making the gift.

Article (559) Whoever mortgages a thing for a debt owed thereby and then gifts it to a person other than the mortgagee, and the mortgagee consents to the gift to another, the gift shall be valid and the debt shall remain without security, even if the mortgagor is insolvent. If the mortgagee does not consent to the gift of the mortgaged property to another and the mortgagor is insolvent, the gift shall be void. If the mortgagor is solvent, the gift shall be valid provided that the debt is paid immediately to the mortgagee or that adequate security is provided.

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Article (561) A gift shall be void if the donor's debts encompass their property before the donee takes possession of the gifted property, even if the debt arises after the gift.

Article (565) If a thing lent for use is gifted to a person other than the borrower, or a deposit is gifted to a person other than the depositary, and the donor dies before the expiry of the period of the loan for use or before the recovery of the deposit, the possession of the borrower of the thing lent for use, or of the depositary of the deposit, shall be deemed possession on behalf of the donee, and the gift shall be completed thereby, provided that the donor has had it witnessed. If the gift is not witnessed, the possession of each shall be deemed possession on behalf of the donor, and the gift shall be void.

Article (566) 1. A gift by a minor or a prodigal without consideration shall be void. 2. The guardian of an interdicted person may not make a gift of any property of their ward, unless the guardian is the father, and the gift is made for consideration.

Article (567) If the leased property is gifted to someone other than the lessee and the donor dies before the expiry of the lease period, the possession of the lessee shall not, after the gift, be possession for the donee, unless the donor has also gifted the rent to the donee before receiving it from the lessee, in which case the lessee's possession shall be possession for the donee.

Article (569) A promise to make a gift shall not be valid, nor shall a gift of a future property be valid.

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Federal Decree by Law of 2025 Promulgating the Civil Transactions Law 143

Article (571) A gift after the donor's death is valid if the donee sought to document it or to take possession thereof during the donor's lifetime but was unable to do so until after their death.

Article (572) The provisions of a will shall apply to a gift made during a death illness. Part Two Effects of the Contract of Gift First: The Donor's Obligations

Article (573) The donor is obliged to deliver the gifted property to the donee, and the provisions governing the delivery of the sold property shall be followed in this regard.

Article (574) 1. If the gift is made without consideration, the donor does not guarantee the entitlement of the gifted property nor its freedom from defects, unless they intentionally conceal the cause of the entitlement or the defects. In this case, the court shall assess for the donee fair compensation for the damage they have suffered. 2. If the gift is made for consideration, the donor does not guarantee except to the extent of the consideration provided by the donee, and the parties may agree to modify the guarantee or to waive it.

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Federal Decree by Law of 2025 Promulgating the Civil Transactions Law 144

Article (575) 1. If the gifted property becomes subject to entitlement after it has perished while in the possession of the donee, and the entitled party chooses to have recourse against the donee for the guarantee, the latter may claim from the donor what they have guaranteed to the entitled party. 2. If the gifted property becomes subject to entitlement and the donee has made an addition to the gifted property that cannot be separated without damage, the entitled party may not recover it before paying the value of the addition.

Article (576) The donor does not guarantee a latent defect in the gifted property, even if the donor intentionally concealed it, unless the gift is made for consideration. Second: The Donee's Obligations

Article (577) The donee is obliged to perform what has been stipulated as consideration for the benefit of the donor, a third party, or the public interest.

Article (578) If it is found that the gifted property is of lesser value than the stipulated consideration, the donee is not obliged to pay more than the value of the gifted property.

Article (579) If the donor stipulates as consideration for the gift the payment of their debts, the donee is not obliged to pay except the debts that existed in the donor's liability at the time of the gift, unless otherwise agreed.

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Article (580) If the donor stipulates that the donee shall provide maintenance for them or for another for life, the donee shall be bound by such stipulation. If the donee breaches this obligation, the donor may demand the performance of this obligation or the rescission of the gift.

Article (581) If the gifted property is encumbered with a real right (jus in rem) securing a debt owed by the donor or by another person, the donee is obliged to pay this debt, unless otherwise agreed. Part Three Revocation of the Gift

Article (586) If the donee intentionally and unlawfully kills the donor, any of their heirs has the right to invalidate the gift.

Article (587) 1. The donor may recover the gifted property if they have stipulated in the contract that such recovery shall occur in the event the donee fails to fulfill certain obligations for the benefit of the donor or someone they care about. 2. If the gifted property has perished or the donee has disposed thereof, the donor is entitled to its value at the time of the disposition or perishment.

Article (588) 1. Revocation results in the return of the gifted property to the ownership of the donor from the time the revocation is completed, without prejudice to the rules related to registration. 2. The donee shall not be required to return the fruits except from the time of agreement on the revocation or from the time of filing the lawsuit. They may have recourse for all necessary expenses they have incurred, while for beneficial expenses, recourse shall not exceed the value of the increase in the gifted property.

Article (589) 1. If the donor recovers the gifted property without mutual consent or litigation, they shall be liable to the donee for the perishment of the thing, whether the perishment is by the donor's act, by an external event for which they are not responsible, or due to use. 2. If a judgment is issued revoking the gift and the thing perishes while in the possession of the donee after being notified to deliver it, they shall be liable for this perishment, even if it is due to an external event for which they are not responsible.

Article (590) The expenses and costs of the gift shall be borne by the donee, and the expenses and costs of the revocation shall be borne by the donor, unless otherwise agreed.

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Federal Decree by Law of 2025 Promulgating the Civil Transactions Law 148 Chapter Four The Loan Contract

Article (593) 1. The lender shall be of full legal capacity, and the borrower shall be legally capable of assuming obligations. 2. The guardian, tutor, curator, or representative of an absentee may not borrow funds for the benefit of the person under their guardianship, except by permission of the court.

Article (594) 1. The lender shall deliver the subject matter of the contract to the borrower upon completion of the contract, unless it is agreed to deliver it at another time. 2. If the item perishes before its delivery to the borrower, the loss shall be borne by the lender.

Article (595) If a third party is adjudged entitled to the property received under the loan while it is still in the possession of the borrower, the latter’s obligation to return a similar item shall lapse, and

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Federal Decree by Law of 2025 Promulgating the Civil Transactions Law 149 they may have recourse against the lender for any damage they may have suffered as a result of such entitlement, if the lender was acting in bad faith.

Article (596) 1. If a latent defect appears in the property received under the loan, the borrower shall only be obliged to return its value in its defective condition. 2. If the lender intentionally concealed the defect, they shall be liable for the damage caused by the defect.

Article (597) If the loan is subject to a term, the lender may not demand repayment before the expiry of the term. If no term is agreed upon, or if it is agreed that repayment shall be made when the borrower is able to do so, the court shall determine a suitable time for repayment according to the circumstances.

Article (598) 1. The borrower is obliged to return the same amount, type, and description of what they have received at the end of the loan period, and no regard shall be had to any change in its value, at the time and place agreed upon. 2. If it is impossible to return an item of the same kind as the borrowed item, the lender's right shall transfer to its value on the date of receipt.

Article (601) The expenses of the loan and its repayment shall be borne by the borrower, unless otherwise agreed. Chapter Five Company Contract Part One General Provisions

Article (603) 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 profits or losses resulting therefrom. 2. Notwithstanding Paragraph (1) of this Article and in accordance with the applicable legislation, any of the following shall be permissible: a. The establishment or ownership of a company by a single person. b. The reinvestment of the net profits of the company to achieve the purposes for which it was established.

Article (604) 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,

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Federal Decree by Law of 2025 Promulgating the Civil Transactions Law 151 unless one of them requests that it be declared invalid, in which case such invalidity shall take effect in respect of the contract from the date the claim is instituted.

Article (605) 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 rely on such personality notwithstanding the non- completion of the prescribed procedures.

Article (606) 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-commercial, and in such case, it shall be subject to the Commercial Companies Law. 3. A company shall be subject to the provisions set out in this Chapter and the provisions of the special legislation regulating the activities it carries out. First: The Contributions

Article (611) 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.

Article (612) 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. Fourth: Management of the Company

Article (616) 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.

Article (618) 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. Fifth: Effects of the Company

Article (621) 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. After the liquidation of the company, they may claim their rights from the debtor's share in the company's assets. 2. The personal creditor of a partner may levy a precautionary attachment in the hands of the liquidator over what will develop upon their debtor from the company's assets upon liquidation. Sixth: Dissolution of the Company

Article (622) 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.

Article (623) 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 in kind and that thing perishes before being contributed, the company shall be dissolved with respect to all partners.

Article (624) 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.

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Federal Decree by Law of 2025 Promulgating the Civil Transactions Law 157

Article (627) 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 void.

Article (628) 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 withdrawal from the company if the company is for a fixed term, where they provide reasonable grounds therefor. 3. In both of the preceding cases, the provisions of Paragraph (2) of Article (625) of this Law shall apply to the share of the excluded or withdrawing partner. Such share shall be valued according to its value on the date of filing the claim. Seventh: Liquidation and Division of the Company

Article (629) 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 liquidation and division, in accordance with the provisions contained in the following Articles.

Article (630) 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 jointly liable with the participating managers, as the case may be.

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Federal Decree by Law of 2025 Promulgating the Civil Transactions Law 159

Article (635) The rules governing the division of undivided property shall be followed in the division of companies. Part Two Business Partnership

Article (636) 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 services, provided that the works are unified or interrelated.

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Federal Decree by Law of 2025 Promulgating the Civil Transactions Law 161

Article (637) 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.

Article (638) 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 to any of them.

Article (639) 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.

Article (640) 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 unequally distributed even if equality in the performance of services is stipulated, and profits shall be due even where an impediment prevents a partner from contributing to the services.

Article (641) Losses shall be apportioned among the partners in proportion to the services undertaken by each of them.

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Federal Decree by Law of 2025 Promulgating the Civil Transactions Law 162

Article (642) 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 shall be divided among the partners in proportion to the extent of each partner’s liability.

Article (643) 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 of them and the services from others.

Article (645) 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 provides otherwise.

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Federal Decree by Law of 2025 Promulgating the Civil Transactions Law 163

Article (647) 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 is named or whose name or surname is included in its name, the company's name shall be amended in the records of the Competent Authority; however, the professional company may continue to bear their name or include it in its name with their written consent or the written consent of their heirs, as the case may be.

Article (648) 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 activity, provided that they are subject to the supervision of and responsibility of the company.

Article (649) A partner may not assign, sell, or pledge their shares in the professional company except with the approval of the majority of the partners.

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Federal Decree by Law of 2025 Promulgating the Civil Transactions Law 164

Article (650) A partner may not be a founder or a partner in more than one professional company or be employed by another professional company. Second: Liability of the Professional Company and the Partner

Article (652) 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, they shall refrain from working in the company until the end of the suspension period and the removal of the cause thereof.

Article (654) 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 for practicing the profession. Chapter Six Mudaraba Contract Part One Formation of the Mudaraba Contract

Article (655) 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.

Article (657) The capital provider is obligated to deliver the Mudaraba capital to the mudarib and to enable them to manage and dispose thereof.

Article (658) 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.

Article (659) 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 shall be provided at the end of each year, unless otherwise agreed.

Article (660) 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 be authorized to carry out the work in accordance with the prevailing custom.

Article (663) 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 shall be determined in accordance with the prevailing custom, and either contracting party may, in this case, terminate the Mudaraba contract in accordance with

Article (665) 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 intervals while the Mudaraba continues, and it shall be presumed that what is distributed during the Mudaraba constitutes profit. 2. A contracting party may not take their share of the profit before it is due without the consent of the other. Part Three Expiration of the Mudaraba Contract

Article (668) 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 may not dispose of the Mudaraba funds after the termination of the Mudaraba contract. If they are other than cash, the mudarib shall convert them into cash, unless the agreement or the nature of the transaction requires otherwise.

Article (669) 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 capital decreases, they shall bear the loss; and if profit is realized, the capital provider shall be entitled to compensation equivalent to the capital would have earned until its return.

Article (670) 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 terminates upon the death of the mudarib, their heirs, if they have the legal capacity, or their representative, provided that they are aware of the Mudaraba, shall promptly inform the capital provider of the death of their decedent and take the measures required by the circumstances to preserve the capital. Chapter Seven Settlement Contract Part One Definition and Conditions of the Settlement Contract

Article (671) 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.

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Article (673) 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 settlement by guardians, tutors, and curators, taking into account the provisions of special laws.

Article (674) 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 crimes in accordance with the applicable laws.

Article (675) The proof of settlement shall be made in accordance with the general rules of evidence in the applicable legislation.

Article (678) 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.

Article (679) 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 validity shall not depend on knowledge of the value of the two considerations. 2. The provisions of the contract most closely resembling the settlement in terms of its validity and the effects arising therefrom shall apply to the settlement.

Article (680) 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 their heirs thereafter to revoke it.

Article (682) 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.

Article (683) 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.

Article (684) 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 have agreed that the parts of the contract are independent of each other. Section Two Contracts of Usufruct Chapter One Lease Contract Part One Definition of the Lease Contract

Article (685) 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.

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Federal Decree by Law of 2025 Promulgating the Civil Transactions Law 173 Part Two Elements of the Lease Contract

Article (687) 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 of the right of disposition, subject to the conditions required for such ratification.

Article (688) The subject matter of a lease is the usufruct, and its delivery is effected by the delivery of its subject matter.

Article (689) 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.

Article (690) 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.

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Federal Decree by Law of 2025 Promulgating the Civil Transactions Law 174 First: Lease Term

Article (691) 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.

Article (692) 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 specified for the payment of the rent, and it shall terminate upon the expiry of this period at the request of one of the contracting parties, provided that the contracting party has notified the other contracting party of his unwillingness to renew.

Article (693) 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 similar term.

Article (694) 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 case its addition to a future term exceeding one year from the date of the contract shall not be valid.

Article (696) 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 is not cash. 3. If the rent is unknown, the lease may be rescinded, and the rent of the like shall be due for the period elapsed prior to rescission.

Article (697) It is permissible to agree on the advance payment, deferral, or payment of the rent in instalments to be paid at specified times.

Article (698) 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 after the enjoyment of the usufruct or after the realization of the ability to enjoy it. 3. The rent due for a time unit shall follow the custom regarding its payment dates; otherwise, the court shall determine them at the request of the interested party.

Article (699) Rent is not due for a period that has elapsed before the delivery of the leased property, unless the lessee was the cause thereof.

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Federal Decree by Law of 2025 Promulgating the Civil Transactions Law 176 Part Three Effects of the Lease Contract First: Obligations of the Lessor 1. Delivery of the Leased Property

Article (701) If the leased property is delivered in a condition that renders it unfit for the enjoyment for which it was leased, or if such enjoyment is substantially diminished, the lessee may request the rescission of the contract or a reduction of the rent in proportion to the diminished enjoyment, with compensation in both cases where justified.

Article (702) The lessor may refrain from delivering the leased property until the advance rent is paid.

Article (704) The provisions governing the obligation to deliver the sold property shall apply to the obligation to deliver the leased property and its appurtenances, unless otherwise agreed. 2. Maintenance of the Leased Property

Article (707) 1. The lessee may not prevent the lessor from carrying out repairs that are necessary for the preservation of the leased property, but if such repairs cause a total or partial impairment of the enjoyment of the property, the lessee may, according to the circumstances, request either the rescission of the lease or a reduction of rent. 2. If the lessee remains in the leased property until the repairs are completed, their right to request rescission shall lapse.

Article (709) 1. If the lessee, with the lessor's permission, carries out constructions or repairs for the benefit or maintenance of the leased property, they shall have recourse against the lessor for what they spent within the customary limits, even if no recourse was stipulated. 2. If what the lessee has carried out is for their personal benefit, they shall have no recourse against the lessor, unless otherwise agreed.

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Federal Decree by Law of 2025 Promulgating the Civil Transactions Law 179

Article (710) 1. If a third party claims a right that conflicts with the rights of the lessee under the lease contract, the lessee shall promptly notify the lessor thereof and may request to be removed from the lawsuit, in which case the legal proceedings shall be directed against the lessor. 2. If such claim results in depriving the lessee of the enjoyment of the leased property, they may, according to the circumstances, request the court to order either rescission or a reduction of the rent with compensation if justified.

Article (712) If an act is issued by the competent authorities that prevents the lessee's enjoyment of the leased property wholly or partially in a manner that affects the intended usufruct, the lessee may request the rescission of the contract or a reduction of rent, without prejudice to the lessee's right to claim compensation from the lessor if the act of the competent authority was issued for a reason for which the lessor is responsible.

Article (715) Any agreement providing for exemption or limitation of the warranty against disturbance or defects is void if the lessor has fraudulently concealed the cause of such warranty. Second: Obligations of the Lessee

Article (716) 1. The leased property is a trust held by the lessee, who shall be liable for any deficiency, damage, or loss resulting from a cause attributable thereto, and they shall preserve it with the care of an ordinary person. 2. If there are multiple lessees, each shall be liable for damages arising from their own act, unless the law provides otherwise.

Article (717) The lessee is obligated to use the leased property in the manner agreed upon; if there is no agreement, the lessee is obligated to use the property according to the purpose for which it was prepared.

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Federal Decree by Law of 2025 Promulgating the Civil Transactions Law 181

Article (718) 1. The lessee may not make any change to the leased property without the lessor's permission, unless it is necessary for its repair and does not cause harm to it. 2. If the lessee exceeds this prohibition, they shall be obligated to restore the leased property to the original condition, with compensation where justified.

Article (719) 1. The lessee is obligated to carry out minor repairs customarily required, unless otherwise agreed. 2. The lessee is obligated during the lease term to clean the leased property and remove any accumulated dust or waste, in accordance with custom.

Article (722) The lessee shall pay the rent at the agreed times. If there is no agreement, the rent shall be paid at the times determined by custom.

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Federal Decree by Law of 2025 Promulgating the Civil Transactions Law 182

Article (724) 1. The lessee shall return the leased property upon the expiry of the lease. If they retain it under their possession without right, they shall be obligated to pay the lessor the rent of the like (ujrat al-mithl) for the period of use and shall also be liable for any harm to the leased property and for any expenses borne by the lessor that are chargeable to the lessee. 2. The leased property shall be returned in the state in which the lessee received it, except for what may have befallen it from destruction or damage due to a cause not attributable to them.

Article (725) 1. If the lessee introduces to the leased property any construction, planting, or other improvements that increase its value, with the lessor's consent, the lessor shall be obligated to reimburse the lessee, upon the expiration of the lease, for the amount spent on such improvements or for the amount by which the value of the property has increased, unless otherwise agreed. 2. If such improvements were made without the lessor's knowledge or despite their objection, the lessor may require the lessee to remove them, together with compensation if justified.

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Federal Decree by Law of 2025 Promulgating the Civil Transactions Law 183

Article (726) If the lessor requests a specific increase in the specified rent from the lessee after the expiry of the lease term, the lessee shall be deemed to have accepted the increase if the term expires and they remain in possession of the leased property without objection.

Article (727) If the lessee assigns the contract with the lessor's consent, the new lessee shall replace the original lessee in all rights and obligations arising under the original contract.

Article (728) If the lease pertains to a property in which a factory or a shop has been established, and necessity requires the lessee to sell this factory or shop, the court may order the continuation of the lease if the purchaser provides a sufficient security and the lessor suffers no actual harm therefrom.

Article (730) The lease contract shall terminate upon the expiration of the period specified in the contract without the need for a notice to vacate, unless the law or the agreement provides otherwise.

Article (731) 1. If the lease contract expires and the lessee continues to enjoy the leased property with the lessor's knowledge and without their objection, the lease shall be deemed to have been renewed under its original terms for a period of one year, unless the lease term was shorter than that. 2. This renewal shall be deemed a new lease, not merely an extension of the original lease. However, the real (in rem) securities that the lessee provided in the old lease shall transfer to the new lease. As for personal or real suretyship, it shall not transfer to the new lease unless the surety agrees thereto.

Article (734) If the lease was concluded only due to the lessee's profession or for other reasons related to their personal qualifications and they then die, their heirs or the lessor may request the termination of the contract.

Article (735) 1. The insolvency or bankruptcy of the lessee shall not cause rent that is not yet due to become payable. 2. If the lessee becomes insolvent or bankrupt, the lessor may request the rescission of the lease contract if adequate security is not provided to secure the payment of rent that has not yet fallen due. 3. The lessee, if they become insolvent or bankrupt, and are not authorized under the lease contract to assign the contract or to sublet, may apply to the court for rescission of the lease contract. In this case, the lessor shall be entitled to fair compensation.

Article (736) 1. If the ownership of the leased property is transferred to a particular successor, the lease shall not be effective against them, unless it is proven that they were aware of it, or that it had a fixed date prior to the cause that led to the transfer of ownership. 2. The person to whom ownership has been transferred may uphold the lease contract even if this contract is not effective against them.

Article (737) 1. If the leased property is sold without the permission of the lessee, the sale is effective between the seller and the purchaser, but this does not affect the rights of the lessee.

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Federal Decree by Law of 2025 Promulgating the Civil Transactions Law 186 2. If the lessee authorizes or approves the sale, the sale shall be effective against them and they shall be obligated to deliver the leased property, unless they have paid the rent in advance, in which case they shall have the right to retain possession of the leased property until they recover the equivalent of the rent for the remaining period during which they have not benefited.