Contract Law DIFC Law No. 6 of 2004

PART 1: GENERAL..........................................................................................................................................................1

1. Title .......................................................................................................................................................................1

2. Legislative Authority..............................................................................................................................................1

3. Application of the Law...........................................................................................................................................1

4. Date of enactment.................................................................................................................................................1

5. Commencement......................................................................................................................................................1

6. Interpretation ........................................................................................................................................................1

PART 2: CONTRACTS GENERALLY ..................................................................................................................................2

7. Choice of governing law and jurisdictions.............................................................................................................2

8. Freedom of and capacity to contract ....................................................................................................................2

9. No form required ....................................................................................................................................................2

10. Binding character of contract .............................................................................................................................2

11. Exclusion or modification by the parties..............................................................................................................2

12. Usages and practices ..........................................................................................................................................2

13. Notice ..................................................................................................................................................................3

PART 3: FORMATION ......................................................................................................................................................4

14. Manner of formation ............................................................................................................................................4

15. Definition of offer ................................................................................................................................................4

16. Withdrawal of offer ..............................................................................................................................................4

17. Revocation of offer...............................................................................................................................................4

18. Rejection of offer.................................................................................................................................................4

19. Mode of acceptance.............................................................................................................................................4

20. Time of acceptance..............................................................................................................................................5

21. Acceptance within a fixed period of time............................................................................................................5

22. Late acceptance; delay in transmission .............................................................................................................5

23. Withdrawal of acceptance ..................................................................................................................................5

24. Modified acceptance............................................................................................................................................5

25. Writings in confirmation ......................................................................................................................................5

26. Conclusion of contract dependent on agreement on specific matters or in a specific form ..............................6

27. Contract with terms deliberately left open .........................................................................................................6

28. Freedom to negotiate .........................................................................................................................................6

29. Duty of confidentiality .........................................................................................................................................6

30. Merger clause ......................................................................................................................................................6

31. Written modification clauses...............................................................................................................................6

32. Contracting under standard terms.......................................................................................................................6

33. Conflict between standard terms and non-standard terms.................................................................................7

34. Battle of forms......................................................................................................................................................7

PART 4: VALIDITY...........................................................................................................................................................8

35. Validity of mere agreement..................................................................................................................................8

36. Initial impossibility...............................................................................................................................................8

37. Relevant mistake .................................................................................................................................................8

38. Error in expression or transmission.....................................................................................................................8

39. Remedies for non-performance ..........................................................................................................................8

40. Fraud....................................................................................................................................................................8

41. Threat...................................................................................................................................................................9

42. Confirmation ........................................................................................................................................................9

43. Loss of right to avoid...........................................................................................................................................9

44. Notice of avoidance.............................................................................................................................................9

45. Time limits ...........................................................................................................................................................9

46. Partial avoidance .................................................................................................................................................9

47. Retroactive effect of avoidance ..........................................................................................................................9

48. Mandatory character of the provisions................................................................................................................9

PART 5: INTERPRETATION ............................................................................................................................................10

49. Intention of the parties......................................................................................................................................10

50. Interpretation of statements and other conduct...............................................................................................10

51. Relevant circumstances ....................................................................................................................................10

52. Reference to contract or statement as a whole ...............................................................................................10

53. All terms to be given effect ...............................................................................................................................10

54. Interpretation against party responsible...........................................................................................................10

55. Linguistic discrepancies ...................................................................................................................................11

PART 6: CONTENT.........................................................................................................................................................12

56. Express and implied obligations........................................................................................................................12

57. Implied obligations.............................................................................................................................................12

58. Co-operation between the parties ....................................................................................................................12

59. Duty to achieve a specific result; duty of best efforts .....................................................................................12

60. Determination of kind of duty involved ...............................................................................................................1

61. Determination of quality of performance ..........................................................................................................12

62. Price determination............................................................................................................................................13

63. Contract for an indefinite period .......................................................................................................................13

PART 7: PERFORMANCE ...............................................................................................................................................14

64. Time of performance .........................................................................................................................................14

65. Performance at one time or in instalments .......................................................................................................14

66. Partial performance ...........................................................................................................................................14

67. Order of performance .........................................................................................................................................14

68. Earlier performance............................................................................................................................................14

69. Place of performance.........................................................................................................................................15

70. Payment by cheque or other instrument .............................................................................................................1

71. Payment by funds transfer.................................................................................................................................15

72. Currency of payment ..........................................................................................................................................15

73. Currency not expressed .....................................................................................................................................16

74. Costs of performance.........................................................................................................................................16

75. Imputation of payments.....................................................................................................................................16

76. Imputation of non-monetary obligations...........................................................................................................16

PART 8: NON-PERFORMANCE.......................................................................................................................................17

77. Non-performance defined..................................................................................................................................17

78. Interference by the other party .........................................................................................................................17

79. Withholding performance...................................................................................................................................17

80. Cure by non-performing party............................................................................................................................17

81. Additional period for performance.....................................................................................................................17

82. Force majeure.....................................................................................................................................................18

83. Performance of monetary obligation .................................................................................................................18

84. Performance of non-monetary obligation..........................................................................................................18

85. Repair and replacement of defective performance ...........................................................................................19

86. Right to terminate the contract ........................................................................................................................19

87. Notice of termination..........................................................................................................................................19

88. Anticipatory non-performance ..........................................................................................................................19

89. Effects of termination in general ......................................................................................................................19

90. Restitution .........................................................................................................................................................20

91. Set-off................................................................................................................................................................20

PART 9: ASSIGNMENT...................................................................................................................................................21

92. Assignment of rights and obligations................................................................................................................21

93. Assignment of future rights...............................................................................................................................21

94. Limits on assignments and delegations ...........................................................................................................21

95. Contractual prohibition of assignment ..............................................................................................................21

96. Interpretation of words of assignment; effect of acceptance of assignment...................................................22

97. Contracts to assign in the future, or to transfer proceeds to be received .......................................................22

98. Defences against an assignee...........................................................................................................................22

99. Discharge of an obligor on assignment .............................................................................................................23

100. Substituted performance..................................................................................................................................23

101. Substituted contract .......................................................................................................................................23

102. Novation ..........................................................................................................................................................23

103. Accord and satisfaction ..................................................................................................................................23

PART 10: RIGHTS OF THIRD PARTIES ...........................................................................................................................25

104. Right of third party to enforce contractual term..............................................................................................25

105. Variation and rescission of contract ...............................................................................................................25

106. Defences available to promisor .......................................................................................................................26

107. Enforcement of contract by promisee..............................................................................................................27

108. Protection of promisor from double liability.....................................................................................................27

PART 11: DAMAGES .....................................................................................................................................................28

109. Right to damages ............................................................................................................................................28

110. Full compensation ...........................................................................................................................................28

111. Measure of damages........................................................................................................................................28

112. Certainty of harm..............................................................................................................................................28

113. Foreseeability of harm......................................................................................................................................28

114. Proof of harm in case of replacement transaction ..........................................................................................28

115. Proof of harm by current price .........................................................................................................................29

116. Harm due in part to aggrieved party.................................................................................................................29

117. Mitigation of harm.............................................................................................................................................29

118. Interest for failure to pay money .....................................................................................................................29

119. Interest on damages ........................................................................................................................................29

120. Manner of monetary redress.............................................................................................................................29

121. Currency in which to assess damages ............................................................................................................29

122. Agreed payment for non-performance ............................................................................................................30

123. Limitation ........................................................................................................................................................30

PART 12: AGENCY .......................................................................................................................................................31

124. Agency; principal; agent..................................................................................................................................31

125. General agent; special agent...........................................................................................................................31

126. Disclosed principal; partially disclosed principal; undisclosed principal........................................................31

127. Consent.............................................................................................................................................................31

128. Authority ..........................................................................................................................................................31

129. Creation of authority .......................................................................................................................................31

130. Apparent authority............................................................................................................................................32

131. Creation of apparent authority.........................................................................................................................32

132. Applicability of rules for interpretation of agreements ...................................................................................32

133. When incidental authority is inferred ..............................................................................................................32

134. Inference that agent is to act only for principal’s benefit ..............................................................................32

135. General principle of interpretation ..................................................................................................................32

136. Duty of care and skill .......................................................................................................................................32

137. Duty of loyalty...................................................................................................................................................32

138. Duty to account for profits arising out of employment ...................................................................................32

139. Duty not to act as adverse party without principal's consent.........................................................................33

140. Duty not to compete as to subject matter of agency.......................................................................................33

141. Duty not to act for one with conflicting interests ...........................................................................................33

142. Duty not to use or disclose confidential information ......................................................................................33

143. Period of employment ......................................................................................................................................33

144. Continuing duties after termination of agency ...............................................................................................33

145. Liability for loss caused ..................................................................................................................................33

146. Liability for things received in breach of duty of loyalty..................................................................................34

147. Liability for use of principal's assets ..............................................................................................................34

148. Principal's choice of remedies ........................................................................................................................34

149. Duty of indemnity ............................................................................................................................................34

150. When duty of indemnity exists.........................................................................................................................34

151. When no duty of indemnity...............................................................................................................................35

152. Ratification ......................................................................................................................................................35

153. Affirmation........................................................................................................................................................35

154. What acts can be ratified ................................................................................................................................35

155. Purporting to act as agent as a requisite for ratification ................................................................................35

156. Who can affirm.................................................................................................................................................35

157. Affirmation after rights have crystallised.........................................................................................................35

158. Effect of ratification ........................................................................................................................................36

159. Revocation of authority ...................................................................................................................................36

160. Liability based upon agency principles ...........................................................................................................36

161. Liability of disclosed or partially disclosed principal; general rule ................................................................36

162. Liability of disclosed or partially disclosed principal; apparent authority ......................................................36

163. Unauthorised acts of general agent.................................................................................................................36

164. Unauthorised acts of special agents...............................................................................................................36

165. Rights between third person and agent...........................................................................................................37

166. Defences of principal – in general...................................................................................................................37

167. Undisclosed principal; general rule .................................................................................................................37

168. Acts of general agents ....................................................................................................................................37

169. Acts of manager appearing to be owner .........................................................................................................37

170. Unauthorised acts of special agents...............................................................................................................37

171. Defences of undisclosed principal – in general...............................................................................................37

172. Power of agent to modify contract before disclosure of principal...................................................................38

173. Contracts, disclosed agency; general rule.......................................................................................................38

174. Defences of other party ...................................................................................................................................38

175. Rights between other party and agent ............................................................................................................38

176. Contracts, undisclosed agency; general rule ..................................................................................................38

177. Principal excluded from transaction.................................................................................................................38

178. Rights between other party and agent ............................................................................................................39

179. Defences of other party ...................................................................................................................................39

180. Status of agent as party to a contract ............................................................................................................39

181. Agent who warrants authority .........................................................................................................................39

182. Defences of agent ...........................................................................................................................................39

183. Agent surety for principal.................................................................................................................................39

184. Election by other party to hold principal; agency undisclosed........................................................................40

Schedule 1 Interpretation ........................................................................................................................................41