Force majeure under United Arab Emirates law is a high threshold. Article 273 of the UAE Civil Transactions Law (Civil Code) only bites when a supervening event renders contractual performance impossible (not merely delayed, inconvenient, or more expensive). When that standard is met, the corresponding obligation is extinguished and the contract is rescinded “ipso facto”; where only part is impossible (or impossibility is temporary in a continuing contract), the law contemplates partial extinction and may allow the creditor to rescind in defined circumstances.
Practically, even where disruption is real, termination is not the default outcome. A well-documented extension (addendum) is often the lowest-risk move especially because Form F itself anticipates written extensions, and because Dubai Land Department has also supported remote registration pathways that can reduce “impossibility” arguments in some cases.
This article is general information for buyers, sellers, brokers and legal teams. The Form F template states that Arabic prevails if there is a discrepancy between Arabic and English text so always check the signed Arabic version.
Force majeure and hardship under UAE law
UAE courts start with the contract. If your SPA contains a force majeure clause, its wording, notice mechanics, and risk allocation matter courts tend to apply those requirements closely.
Article 273 (force majeure / impossibility) The Civil Code provides that if force majeure arises in a bilateral contract and makes performance impossible, the corresponding obligation is extinguished and the contract is rescinded automatically. If impossibility is partial (and, for continuing contracts, if impossibility is temporary), the consideration for the impossible part is extinguished and related rescission rights may arise.
How courts characterize “force majeure” While the Civil Code does not define force majeure, UAE jurisprudence and commentary commonly focus on an event that is unforeseeable, unavoidable, and objectively prevents performance not merely making it harder. A Dubai Court of Cassation extract (as quoted in reputable practitioner materials) describes force majeure as an unforeseeable incident that cannot be prevented, rendering performance impossible, and emphasises an objective “ordinary person” standard and the trial court’s discretion.
Article 249 (hardship / exceptional public circumstances) Where performance is not impossible but has become oppressive/onerous due to exceptional, public, unforeseeable circumstances that threaten grave loss, Article 249 empowers a judge to reduce the obligation to reasonable limits; any agreement to the contrary is void.
Good faith and notice in practice. Even where Article 273 can operate without notice as a matter of strict doctrine, credible legal commentary warns that giving prompt notice is usually prudent to avoid allegations of bad faith (Article 246 requires performance consistent with good faith).
How Article 273 plays out in DLD Contract F
Contract F/Form F often titled “Property Sales Contract between Seller and Buyer” is a standardized SPA used to document secondary-market sales in Dubai. In many workflows it is generated through DLD systems (including the Dubai REST platform), with brokers following a documented “Broker’s Journey” to create the unified sale contract (F).
The DLD template contains several features that become central in any termination or force majeure analysis:
The seller undertakes to complete transfer procedures to the buyer’s name after receiving the agreed price, and by the agreed deadline.
The buyer pays a deposit cheque and the balance using a manager’s cheque or another guaranteed method acceptable to DLD.
The deposit cheque is held “as a trust” and cannot be cashed or disposed of without a written order from both parties; otherwise, return/entitlement is tied to a court order.
The parties may extend deadlines by mutual written agreement signed by both parties this matters because an agreed extension is usually cleaner than arguing over impossibility.
- Termination and compensation mechanics are framed around fault (“own act or omissions”):
- If the buyer fails to pay or complete transfer on the agreed date due to their own act/omission, the seller may terminate and retain the deposit (subject to the contract’s terms).
- If the seller fails to complete transfer due to their own act/omission, the buyer may terminate; the deposit is refunded and the seller pays compensation equal to the deposit, unless dates are amicably varied.
The sale price is stated to be fixed and not adjusted for market price changes this is one reason “market movement” arguments rarely fit force majeure.
The contract is governed by local and federal laws in Dubai; disputes are first to be resolved amicably within a short window, then referred to competent courts in Dubai.
Why “impossibility” is harder to prove in many Form F cases
A recurring issue in Form F disputes is that the performance obligation is not “deliver goods across a closed border”; it is usually: arrange payment, attend transfer (or appoint representation), and complete DLD registration.
Because DLD has supported remote registration approaches (including systems designed to complete sale transactions remotely, with digital verification and escrow-style protections), the factual claim “transfer was impossible” can be contested if a workable alternative existed at the time.
That does not mean force majeure can never apply. It means that the evidence must show that, despite reasonable alternatives, the parties could not legally or physically complete the transfer within the required timeframe.
When termination is justified in a property SPA
A Form F termination position tends to be more defensible where you can show (a) a true impediment, (b) inability to overcome it with reasonable steps, and (c) a direct causal link to non-completion. The following is a practical, deal-focused checklist drawn from the statutory tests and mainstream UAE legal guidance.
Termination is more likely to be justified where:
Performance is objectively impossible, not merely harder (Article 273).
The impossibility is due to an external event beyond the party’s control and cannot reasonably be avoided or mitigated.
The party relying on force majeure has complied with any contractual notice requirements (or, at minimum, provided prompt notice consistent with good faith).
The obstruction affects the specific transfer mechanics required by the SPA and DLD process (for example, inability to complete registration and settlement), not merely the party’s internal convenience.
Delay / hardship (not termination) is usually the better fit where:
The issue is financial pressure, pricing regret, or credit tightening. Those typically go to hardship concepts (Article 249) only in narrow cases and Article 249 leads to judicial adjustment, not automatic termination.
An alternative pathway exists (POA, different bank, different guaranteed payment method accepted by DLD, remote registration route), meaning performance is not “impossible” in the Article 273 sense.
Force Majeure vs Financial Hardship comparison table
| Topic | Force majeure (Article 273) | Financial hardship / exceptional circumstances (Article 249) |
|---|---|---|
| Core legal test | Supervening event renders contractual performance impossible. | Public, exceptional, unforeseeable event makes performance onerous/oppressive, threatening grave loss, but not impossible. |
| Evidence usually needed | Causal chain showing impossibility (official closure/suspension notices, system outage confirmations, dated appointment records, refused submissions), plus proof you could not reasonably overcome/mitigate. | Proof of a public exceptional event + proof of oppressive burden/grave loss; typically requires judicial evaluation. |
| Typical remedies | Obligation extinguished; contract rescinded ipso facto if total impossibility; partial/temporary rules may apply. | Court may reduce obligation to reasonable limits; contract generally continues and is rebalanced rather than cancelled. |
| Likely outcome in litigation | Fact-specific; courts apply an objective standard and often reject arguments that amount to “hardship” rather than impossibility. | More likely to result in adjustment (if criteria met) than termination; Article 249 is mandatory in that sense parties cannot contract out of it. |
| Typical contractual wording | Defined FM events + notice + mitigation + suspension/extension + long-stop termination. | “Hardship” / “exceptional circumstances” clause allowing renegotiation, then expert determination/court adjustment if unresolved. |
SCENARIO
Scenario where force majeure is less likely (alternative method available).
The buyer’s bank cannot issue a manager’s cheque on the scheduled day, but the Form F template itself allows payment by manager’s cheque or any other guaranteed method acceptable to DLD. If another guaranteed method or alternative bank route is available within a reasonable window, the case often looks like a delay to be managed via an agreed extension rather than impossibility justifying rescission.
Scenario where force majeure is less likely (market conditions).
After signing, the buyer wants to exit because market prices moved. The DLD template expressly fixes the sale price regardless of market changes; this is typically treated as ordinary commercial risk rather than a force majeure event.
Scenario where Form F’s own “condition precedent” decides the outcome.
A buyer signs Form F conditional on mortgage approval; the contract provides that if the buyer cannot obtain the loan within the stated period, the contract becomes void and the deposit cheque is refunded. That is a contractual mechanism, not force majeure analysis.
FAQ
Can I terminate Form F just because transfers are delayed?
Not usually. Delay alone typically points to rescheduling and a written extension under Form F, unless the delay is caused by an event that makes completion objectively impossible under Article 273.
Does force majeure automatically return the deposit?
Form F treats the deposit as held in trust and restricts release/cashing without joint written instruction or a competent order. Deposit outcomes are therefore highly fact-driven and often depend on agreement or adjudication.
What if my mortgage approval fails?
Form F includes a financing pathway: if the buyer cannot obtain the loan within the stated period (where applicable), the contract is void and the deposit is refunded this is contractual, not force majeure.
Can parties agree an extension without losing their rights?
Yes. Form F expressly allows written extensions signed by both parties, and a well-drafted addendum can preserve rights while moving the completion date.
What evidence matters most if force majeure is claimed?
Clear documentary evidence that performance was objectively impossible (not merely difficult), plus proof of mitigation efforts and prompt notice aligned with good faith expectations.
Contact Best Property Lawyers In Dubai Today
Property transactions in Dubai are governed by strict legal principles. Relying on assumptions especially around force majeure can expose buyers and sellers to serious financial risk.
If you are facing delays, uncertainty, or potential termination under a Property SPA, it is critical to assess your position before taking any step.
DY Lawyers and Legal Consultants advises clients on property SPAs, Form F disputes, force majeure claims, and risk-managed exits, with a focus on compliance, documentation, and protecting deposits and contractual rights.
Speak to our legal team before issuing any notice or taking unilateral action.
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