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What You Need to Know About Breach of Contract in UAE

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Contracts are essential to business in the United Arab Emirates (UAE). They provide a framework for agreements between parties, ensuring that all parties understand their rights and obligations. 

However, despite the best intentions of those involved, a breach of contract can occur. This can have significant legal and financial consequences for all parties involved. Therefore, it is essential to have a solid understanding of breach of contract laws in the UAE to protect your interests and prevent disputes from escalating. 

This article will provide an overview of what you need to know about breach of contract in the UAE. Read on to learn more!

What Breach of Contract Exactly Is

A party breaches the contract when they fail to fulfil their contractual obligations. In a broader sense, contract breach refers to a violation of the agreement that occurs when one party fails to meet the agreement’s partial or total obligations.

The UAE government has issued and implemented some of the most impressive laws and regulations to address contract-related issues. Non-violating parties have the right to take legal action to mitigate their losses, while breaching parties have the right to justify their actions. 

Thus, both parties interests are protected.

Type Of Breach of Contract

Material Breach

A material violation occurs when a party fails to fulfil its contractual obligations. The non-breaching party receives something significantly different from what was initially agreed upon due to the material breach. When a material violation occurs, the non-breaching party is not obligated to sign. 

Minor Breach

Minor violations occur when a party receives the agreement’s terms, albeit with some variation. In the event of a minor infraction, the non-breaching party must continue to fulfil its legal obligations. 

For instance, you must still provide the agreed-upon purchasing list, exercise schedule, and meal plan. 

Fundamental Breach

A fundamental breach is a severe violation of a contract in the UAE that goes to the heart of the agreement between the parties. It is a breach that is so severe that it renders the entire contract useless or defeats its purpose. 

When a fundamental breach occurs, the non-breaching party may be entitled to terminate the contract and seek damages or other remedies. 

Consequences of Breach of Contract in UAE

  • Contract violation is a severe offence that can financially and emotionally cost both parties. 
  • As one might expect, a breach of contract has consequences when one or both parties fail to abide by one or more of the contract’s terms. 
  • When determining the following actions and resolving a contract dispute, there are additional repercussions to consider besides monetary damages associated with a breach of contract. 
  • Legal action to recover losses can be costly for both parties. Before pursuing a lawsuit or deciding to breach a contract yourself, it is essential to comprehend the consequences of a contract breach.

Conclusion

Breaching a contract can have significant consequences for both parties involved. If a breach occurs, seeking legal advice and resolving the dispute through negotiation or alternative dispute resolution methods before pursuing legal action is essential. 

Ultimately, it is better to avoid a breach of the contract by thoroughly reviewing and understanding the terms of any agreement before signing it.

If you require legal advice or representation for breach of contract matters in Dubai or the UAE, turn to the experienced team at Al Kabban & Associates. Our team of the best lawyers in Dubai, UAE, has over 30 years of experience and a proven track record of successfully navigating the legal system and its framework. Contact us today!

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