UAE has consistently upheld the importance and sanctity of contracts and the principle that parties must respect the obligations they undertake voluntarily. The Federal Decree-Law No. 25 of 2025 Promulgating the Civil Transactions Law reaffirmed this principle by retaining specific performance as the primary remedy for breach of contractual obligations. UAE’s civil law prioritises compelling the defaulting party to perform the contract wherever performance remains legally and practically possible.

Article 113 of the Civil Transactions Law provides that a valid contract is binding upon the contracting parties and may only be amended or terminated by mutual consent or in the circumstances prescribed by law. Articles 219 to 224 governs the legal effects of contracts and require parties to perform their contractual obligations in accordance with the agreed terms and the requirements of good faith.

Specific Performance of Contract

Specific performance or performance in kind, is a judicial remedy that compels a defaulting party to perform the contractual obligation agreed upon, rather than merely paying monetary compensation. The objective of this remedy is to ensure that the innocent party receives the actual benefit of the contract. It is particularly important where the damages would not adequately compensate the loss arising from non-performance, such as in contracts involving unique assets, real estate, specialised goods, or obligations that cannot easily be substituted.

Relevant provisions under the Civil Transactions Law

The law of specific performance is contained in Articles 292, 293, and 331 to 335 of the new Civil Transactions Law.

Article 292 imposes an obligation on the debtor to perform the contractual obligation once it becomes due and permits the creditor to seek judicial enforcement where the debtor unjustifiably refuses to perform. Article 293 distinguishes between performance in kind and performance by compensation, signifying the legislature’s preference for actual performance before monetary damages are considered.

More specifically, Articles 331 to 335 constitute the principal provisions governing compulsory performance. These articles empower the courts to order specific performance whenever the contractual obligation remains capable of execution and no legal or practical impediment prevents its enforcement.

Conditions for Granting Specific Performance

Although specific performance is the preferred remedy under the UAE Civil Transactions Law, it is subject to certain conditions. The claimant must establish that:

  1. A valid and legally enforceable contract exists between the parties.
  2. The claimant has performed, or is ready and willing to perform, its own contractual obligations.
  3. The defendant has failed or refused to perform the contractual obligation after it became due.
  4. The contractual obligation remains legally and practically capable of performance.

Where performance has become impossible, unlawful, or incapable of execution, the court may decline to order specific performance and instead award an alternative remedy, such as compensation (damages) or termination of the contract, in accordance with the Civil Transactions Law.

Practical Significance for Commercial Contracts

Specific performance is particularly significant in commercial transactions where the subject matter of the contract is unique or where monetary damages would not provide an adequate remedy.

For businesses operating in UAE, the new law provides greater confidence that contractual promises may be judicially enforced where performance remains possible. This is particularly important in sectors such as:

  1. construction
  2. real estate
  3. supply agreements
  4. commercial agency
  5. technology contracts
  6. shareholders’ agreements
  7. long-term commercial arrangements.

Conclusion

Specific performance of contract is considered to be one of the primary remedy available to the party to a contract, when the other party default in its performance. This is applicable whenever the performance of the contract is still possible. By prioritising contractual performance over monetary substitution, the new Civil Transactions Law promotes legal certainty, safeguards the legitimate expectations of contracting parties. The law further strengthens UAE’s reputation as a jurisdiction that is most effective in the enforcement of civil and commercial obligations.

We at Ayesha Aldhaheri Advocates & Legal Consultants, regularly handle contractual disputes involving non-performance/breach of contract, compensation, liability, and the specific performance of such contracts. We assist clients in understanding their contractual rights and obligations and represent them in resolving disputes arising from the performance, suspension, or termination of contracts.