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Legal Challenges for Property Buyers Seeking to Invoke Force Majeure in Dubai

Property buyers looking to exit off-plan agreements in Dubai by citing force majeure encounter significant legal challenges. Lawyers indicate that current regional tensions do not automatically fulfill the requirements set by UAE law.

Legal experts have confirmed that while force majeure is acknowledged under Dubai law, its application relies on strict legal and evidentiary standards, evaluated on a case-by-case basis by the courts.

Bassel Boutros, a Partner at BSA LAW, explained that for an event to qualify as force majeure, it must be exceptional, extraordinary, unforeseeable at the time of contract signing, and unavoidable. Additionally, there must be a direct causal relationship between the event and the inability or delay in fulfilling contractual obligations.

He further stated that a party cannot claim force majeure if the delay or failure to perform was due to its own fault, especially if it was already in breach before the event occurred.

“The burden of proof falls on the party invoking force majeure,” Boutros noted, emphasizing that the party must demonstrate that the failure to perform was directly caused by the event, rather than by previous breaches or unrelated circumstances.

Boutros mentioned that Dubai courts have considerable discretion in determining whether an event qualifies as force majeure, based on the evidence provided in each case.

He also pointed out that certain events can be officially classified as exceptional circumstances through legislation or regulatory actions. For instance, during the Covid-19 pandemic, Cabinet Resolution No. 5 of 2021 declared the pandemic an “emergency financial crisis” for a specified period.

However, he remarked that invoking force majeure concerning off-plan sale agreements is not viable under the current conditions.

“Normal life in the UAE proceeds without disruption, and there are no significant adverse effects on the real estate market,” he stated. “The market continues to be governed by fundamental principles of supply and demand and is functioning consistently with its prior conditions.”

Boutros added that while some parties might attempt to leverage prevailing circumstances to evade contractual obligations, such actions do not meet the legal criteria for force majeure.

“In our view, the necessary conditions for invoking force majeure are not fulfilled, and thus, there is no legitimate basis for terminating off-plan sale agreements by either party,” Boutros concluded.

Inquiries

Andrew Thomson, partner and head of real estate at Al Tamimi & Co., confirmed that force majeure is a recognized concept under UAE law and is included in property contracts, but successfully invoking it is challenging.

“A party wishing to rely on force majeure must prove that the event was genuinely unforeseeable, beyond their control, and made contract performance impossible—not simply more difficult or financially inconvenient,” Thomson stated.

He explained that buyers sometimes look to force majeure clauses as potential escape routes during uncertain times, yet regional tensions alone do not automatically satisfy the legal requirements.

“Courts and arbitration tribunals in Dubai closely scrutinize these claims, and the specific wording of each contract is crucial,” he added.

Thomson noted that law firms are receiving an increasing number of inquiries from clients wanting to understand their legal options.

“Our consistent advice is to review your contract carefully before taking any action,” he advised. “What may appear to be a force majeure clause could come with significant conditions and limitations.”

He also emphasized that seeking early legal counsel is the most prudent course of action, warning that premature steps can sometimes lead to more issues than they resolve.