Yes. UAE law allows a party to claim damages for losses suffered as a result of a breach of contract, provided that the legal requirements for compensation are met. The purpose of damages under UAE law is not to punish the breaching party, but to restore the injured party to the position they would have been in had the contract been properly performed.
To successfully claim damages, the claimant must prove three essential elements: the existence of a valid contract , a breach of that contract, and actual damage suffered as a direct result of the breach. UAE courts place strong emphasis on causation, meaning the damage must be a direct and foreseeable consequence of the breach. Remote or speculative losses are generally not recoverable.
Documentary evidence plays a critical role in breach of contract claims. Courts rely on written agreements, correspondence, invoices, payment records, and expert reports to assess whether a breach occurred and to quantify the resulting loss. Oral assertions without supporting documents are rarely sufficient.
Under UAE law, damages may include direct financial losses, loss of profit where it can be clearly established, and costs incurred due to non-performance or delay. However, punitive or exemplary damages are not recognized. Compensation is limited to actual harm proven to the court’s satisfaction.
Where contracts include penalty or liquidated damages clauses, courts have discretion to adjust the amount claimed. If the agreed compensation is significantly higher than the actual loss suffered, the court may reduce it. Conversely, if the claimant proves higher actual damage, the court may award compensation based on proven loss rather than the contractual penalty.
Defendants often raise defenses such as force majeure, contributory fault, or failure by the claimant to mitigate losses. Courts assess whether the claimant took reasonable steps to reduce damage and whether external events genuinely prevented contractual performance.
Expert evidence is frequently used to evaluate financial loss, particularly in commercial and construction disputes. Courts may appoint an independent expert to assess causation and quantify damages.
Given the evidentiary and legal complexity of damage claims, early legal assessment is advisable. DY Lawyers and Legal Consultants assists clients in evaluating breach of contract claims, preparing evidence, and pursuing compensation in accordance with UAE law.
Disclaimer: The content in this article is provided for informational purposes only and does not constitute legal advice.
