Law of Obligations DIFC Law No. 5 of 2005

PART 1: GENERAL........................................................................................................................................................8

1. Title.......................................................................................................................................................................8

2. Legislative Authority ............................................................................................................................................8

3. Application Of The Law..........................................................................................................................................8

4. Date Of Enactment.................................................................................................................................................8

5. Commencement ....................................................................................................................................................8

6. Interpretation........................................................................................................................................................8

7. Non-Assignment Of Right Of Action ......................................................................................................................8

8. Rights Cumulative .................................................................................................................................................8

9. Limitation..............................................................................................................................................................9

10. Causation ...........................................................................................................................................................9

11. Intervening Act ...................................................................................................................................................9

PART 2: CAPACITY .....................................................................................................................................................10

12. Capacity ............................................................................................................................................................10

PART 3: OBLIGATIONS OF GENERALAPPLICATION.........................................................................................................11

CHAPTER 1: APPORTIONMENT OF LIABILITY ...............................................................................................................11

13. Joint And Several Liability ................................................................................................................................11

14. Apportionment Of Joint And Several Liability....................................................................................................11

15. Vicarious Liability .............................................................................................................................................11

16. Responsibility For Children................................................................................................................................12

CHAPTER 2: NEGLIGENCE...........................................................................................................................................12

17. Liability .............................................................................................................................................................12

18. Duty Of Care.......................................................................................................................................................12

19. Public Authorities..............................................................................................................................................13

20. Economic Loss...................................................................................................................................................13

21. Standard Of Care ...............................................................................................................................................13

2 CHAPTER 3: OCCUPIERS' LIABILITY..........................................................................................................................14

22. Liability..............................................................................................................................................................14

23. Occupier's Duty Of Care To Visitors....................................................................................................................14

24. Standard Of Care ...............................................................................................................................................14

25. Warnings And Notices.......................................................................................................................................15

26. Occupier's Duty Of Care To Non-Visitors............................................................................................................15

27. Standard Of Care ...............................................................................................................................................15

28. Warnings And Notices.......................................................................................................................................15

CHAPTER 4: MISREPRESENTATION .............................................................................................................................15

29. Misrepresentation Defined................................................................................................................................15

30. Liability..............................................................................................................................................................16

CHAPTER 5: DECEIT ..................................................................................................................................................16

31. Deceit................................................................................................................................................................16

CHAPTER 6: ECONOMIC TORTS ..................................................................................................................................17

32. Inducing Or Procuring A Breach Of A Legal Right ..............................................................................................17

33. Intimidation.......................................................................................................................................................17

34. Unlawful Interference With Contract ................................................................................................................17

35. Exception To Articles 33 And 34 .......................................................................................................................18

36. Unlawful Conspiracy .........................................................................................................................................18

37. Breach Of Confidence........................................................................................................................................18

38. Passing Off........................................................................................................................................................19

39. Assisting Passing Off By Others........................................................................................................................19

40. Interpretation....................................................................................................................................................19

CHAPTER 7: WRONGFUL INTERFERENCE WITH PROPERTY...........................................................................................20

41. Wrongful Interference With Property.................................................................................................................20

42. Meaning Of Property .........................................................................................................................................20

43. Person With An Interest In Property..................................................................................................................20

44. More Than One Interest In The Property.............................................................................................................20

45. Provisions Of Part 7 (Obligations Relating To Banking) .....................................................................................20

46. Rights Of Third Parties.......................................................................................................................................21

CHAPTER 8: TRESPASS TO LAND ...............................................................................................................................21

47. Claimant Defined................................................................................................................................................21

48. Trespass Defined...............................................................................................................................................21

49. Lawful Justification ..........................................................................................................................................21

50. Defence Of Property ..........................................................................................................................................21

CHAPTER 9: NUISANCE..............................................................................................................................................22

51. Nuisance Defined...............................................................................................................................................22

52. Surrounding Circumstances...............................................................................................................................22

53. Substantial Loss................................................................................................................................................22

54. Defences...........................................................................................................................................................22

CHAPTER 10: DEFENCES ..........................................................................................................................................22

55. Voluntary Assumption Of Risk ...........................................................................................................................22

56. Illegal Conduct Of Claimant................................................................................................................................23

57. Prevention Of Crime And Harm...........................................................................................................................23

58. Lawful Authority ...............................................................................................................................................23

59. Exclusion Of Liability.........................................................................................................................................23

PART 4: OBLIGATIONS RELATING TO INSURANCE .........................................................................................................24

60. Application And Scope......................................................................................................................................24

61. Duty Of The Insured To Disclose Facts...............................................................................................................24

62. Duty Of Utmost Good Faith Of The Insurer And Of The Insured...........................................................................25

63. Consequence Of Breach Of Duty .......................................................................................................................25

64. Regulations ......................................................................................................................................................25

PART 5: OBLIGATIONS RELATING TO BAILMENT ...........................................................................................................26

CHAPTER 1: APPLICATION AND DEFINITIONS...............................................................................................................26

65. Application........................................................................................................................................................26

66. Bailment Defined...............................................................................................................................................26

67. Sub-Bailment Defined .......................................................................................................................................27

CHAPTER 2: DUTIES OF BAILOR AND BAILEE...............................................................................................................27

68. Application Of This Chapter...............................................................................................................................27

69. Duty Of The Bailor To Disclose Information........................................................................................................27

70. Expenses .........................................................................................................................................................27

71. Duty Of The Bailee To Take Care Of Property Bailed...........................................................................................27

72. Duty Of The Bailee Not To Use Property Bailed ..................................................................................................28

73. Bailee's Duty Not To Act In A Manner Inconsistent With Owner's Title ……....................................................... 28

74. Duty Of The Bailee To Return Property...............................................................................................................29

75. Joint Bailments.................................................................................................................................................29

76. Sub-Bailments...................................................................................................................................................29

PART 6: NEGOTIABLE INSTRUMENTS ...........................................................................................................................30

CHAPTER 1: DEFINITIONS .........................................................................................................................................30

77. Negotiable Instrument Defined..........................................................................................................................30

78. Bill Of Exchange Defined...................................................................................................................................30

79. Cheque Defined ................................................................................................................................................30

80. Promissory Note Defined...................................................................................................................................31

CHAPTER 2: BILLS OF EXCHANGE ..............................................................................................................................31

81. Effect Where Different Parties To Bill Are The Same Person .............................................................................31

82. Address To Drawee............................................................................................................................................31

83. Certainty Required As To Payee.........................................................................................................................31

84. What Bills Are Negotiable..................................................................................................................................32

85. Bill Payable On Demand ....................................................................................................................................32

86. Bill Payable At A Future Time ............................................................................................................................32

87. Omission Of Date In Bill Payable After Date.......................................................................................................32

88. Ante-Dating And Post-Dating............................................................................................................................33

89. Optional Terms By Drawer Or Endorser...............................................................................................................33

90. Acceptance.......................................................................................................................................................33

91. Incomplete Instruments....................................................................................................................................33

92. Delivery .............................................................................................................................................................33

93. Capacity Of Parties............................................................................................................................................34

94. Signature Essential To Liability.........................................................................................................................34

95. Person Signing As Agent...................................................................................................................................34

96. Holder In Due Course ........................................................................................................................................34

97. Negotiation Of Bill .............................................................................................................................................34

98. Requirements For A Valid Endorsement............................................................................................................35

99. Conditional Endorsement..................................................................................................................................35

100. Endorsement In Blank And Special Endorsement............................................................................................35

101. Restrictive Endorsement ................................................................................................................................36

102. Negotiation Of Overdue Or Dishonoured Bill.....................................................................................................36

103. Negotiation Of Bill To Party Already Liable Thereon ........................................................................................36

104. Rights Of The Holder........................................................................................................................................37

105. When Presentation For Acceptance Is Necessary...........................................................................................37

106. Time For Presenting Bill Payable After Sight ...................................................................................................37

107. Presentation For Acceptance, And Excuses For Non-Presentation ................................................................38

108. Non-Acceptance..............................................................................................................................................38

109. Dishonour By Non-Acceptance And Its Consequences ...................................................................................38

110. Duties As To Qualified Acceptances................................................................................................................38

111. Presentation For Payment ..............................................................................................................................39

112. Late Presentation For Payment And Exceptions From Presentation ..............................................................39

113. Dishonour By Non-Payment.............................................................................................................................40

114. Notice Of Dishonour And Effect Of Non-Notice ...............................................................................................40

115. Notice Of Dishonour.........................................................................................................................................40

116. Late Notice And Exceptions From Notice........................................................................................................40

117. Duties Of Holder As Regards Drawee Or Acceptor............................................................................................41

118. Liability Of Acceptor.........................................................................................................................................41

119. Liability Of Drawer Or Endorser.........................................................................................................................42

120. Stranger Signing Bill Liable As Endorser..........................................................................................................42

121. Measure Of Damages Against Parties To Dishonoured Bills.............................................................................42

122. Transferor By Delivery And Transferee ............................................................................................................43

123. Payment In Due Course ...................................................................................................................................43

124. Banker Paying Demand Draft Whereon Endorsement Is Forged ......................................................................43

125. Acceptor The Holder At Maturity......................................................................................................................43

126. Express Waiver................................................................................................................................................43

127. Cancellation ....................................................................................................................................................44

128. Alteration Of Bill..............................................................................................................................................44

129. Holder’s Right To Duplicate Of Lost Bill ...........................................................................................................44

CHAPTER 3: CHEQUES ..............................................................................................................................................45

130. Application Of Chapter 2..................................................................................................................................45

131. Presentation Of Cheque For Payment..............................................................................................................45

132. Presentation Of Cheque For Payment: Alternative Means Of Presentation By Banker ....................................45

133. Cheques Presented For Payment Under Article 132; Disapplication Of Article 117 .........................................46

134. Revocation Of Bank’s Authority ......................................................................................................................46

135. Crossed Cheques.............................................................................................................................................46

CHAPTER 4: PROMISSORY NOTES ..............................................................................................................................46

136. Delivery Necessary .........................................................................................................................................46

137. Joint And Several Notes...................................................................................................................................46

138. Note Payable On Demand.................................................................................................................................47

139. Presentation Of Promissory Note For Payment ................................................................................................47

140. Liability Of Maker.............................................................................................................................................47

141. Application Of Chapter 2 (Bills Of Exchange) To Notes....................................................................................47

CHAPTER 5: CHEQUES AND OTHER INSTRUMENTS.......................................................................................................48

142. Relevant Instruments .....................................................................................................................................48

143. General And Special Crossings Defined...........................................................................................................48

144. Crossing By Drawer Or After Issue....................................................................................................................48

145. Crossing A Material Part Of Instrument............................................................................................................48

146. Duties Of Bank As To Crossed Instruments......................................................................................................49

147. Protection To Banker And Drawer Where Instrument Is Crossed......................................................................49

148. Non-Transferable Instruments........................................................................................................................49

149. Protection Of Bankers Paying Unendorsed Or Irregularly Endorsed Instruments ............................................49

150. Protection Of Bankers Collecting Payment Of Instruments..............................................................................49

151. Obligation Of Bankers To Pay Cheques.............................................................................................................50

152. Protection Of Bankers Paying Bearer Cheques ...............................................................................................50

153. Rights Of Bankers Collecting Cheques Not Endorsed By Holders....................................................................50

PART 7: OBLIGATIONS RELATING TO BANKING.............................................................................................................51

154. Application......................................................................................................................................................51

155. Duty Of Confidentiality Of A Banking Business ...............................................................................................51

156. Duties Of A Banker ..........................................................................................................................................51

PART 8: FIDUCIARY DUTIES........................................................................................................................................52

157. Application.......................................................................................................................................................52

158. Fiduciary Status ..............................................................................................................................................52

159. Fiduciary Duties...............................................................................................................................................52

160. Consequences Of Breach ................................................................................................................................52

SCHEDULE 1...............................................................................................................................................................54

SCHEDULE 2..............................................................................................................................................................59

SCHEDULE 3...............................................................................................................................................................60