UAE cuts majority age to 18 with contract, property and corporate law reforms

The UAE Government has issued a Federal Decree Law promulgating a new Civil Transactions Law, delivering

The reform includes a reduction in the age of majority from twenty-one lunar years to eighteen Gregorian years, a move that aligns the UAE with comparative legal systems and introduces a unified standard for full legal capacity across civil, juvenile, labour, and criminal legislation.

UAE civil law

The new Civil Transactions Law establishes a comprehensive and integrated legal framework, representing a pivotal legislative milestone and a qualitative shift in the regulation of civil transactions in the UAE.

It is based on a balanced and contemporary vision aimed at reorganising the general foundations of rights and obligations, enhancing clarity of legal rules, and facilitating their practical application across courts, businesses, and individuals.

The law forms part of a continuous national legislative trajectory focused on modernising the legal framework. It simplifies legal provisions, unifies references, and eliminates duplication with recently enacted special laws, improving efficiency and reducing procedural complexity.

From a judicial perspective, the law expands the scope of judicial reasoning by granting courts broader discretion to refer to the principles of Islamic Sharia where no applicable legislative provision exists.

In such cases, judges may select the solution that best achieves justice and public interest according to the circumstances of each case, without being bound by a specific school of jurisprudence or a single Sharia doctrine.

The law also provides for the application of Sharia principles in the absence of special legislation governing matters relating to persons of unknown parentage, missing persons, and absentees, strengthening judicial adaptability to evolving societal needs.

Federal and local legislation

The comprehensive review of the law took into account practical challenges faced by the judiciary, while respecting the competencies of local authorities in regulating certain matters, issuing licences, and supervising activities related to civil transactions.

Local legislation remains applicable within each emirate’s jurisdiction, while the law preserves the unity and integrity of the federal legislative framework and ensures harmonisation between federal and local roles.

To prevent duplication, provisions overlapping with other legislation were removed.

In relation to proprietary rights, the law reorganised rules governing usufructuary construction rights, requiring registration with the competent authority and providing for nullity in the absence of registration. It introduced provisions governing the obligations of rights holders and allowed parties to determine the duration of such rights.

The law also provides that financial assets located within the UAE belonging to a foreigner with no heirs shall be designated as a charitable endowment, subject to supervision by the competent authority.

A new framework governing assignment was introduced, alongside provisions protecting possession through preventive actions aimed at halting new acts of encroachment before harm occurs.

Youth empowerment, and protection

The law adopts clearer legal concepts aligned with contemporary transactional realities, reinforcing individual legal capacity while protecting free will in legal acts and contracts.

In a move supporting entrepreneurship and youth participation in economic activity, the law lowers the age at which a minor may seek judicial authorisation to manage assets from eighteen Hijri years to fifteen Gregorian years.

It also introduces provisions addressing persons unable to express their will, empowering courts to appoint a judicial assistant to support such individuals in acts serving their best interests.

Contracts and compensation

The Decree Law establishes an advanced framework governing pre-contractual negotiations, imposing an obligation to disclose fundamental information to ensure informed contractual decision making and reduce disputes.

It introduces the concept of a framework agreement to regulate recurring or long-term contractual relationships, predefining essential terms to reduce time and cost and ensure consistent legal reference.

Financial acts of a discerning minor involving benefit and detriment are deemed voidable in the minor’s interest rather than suspended, with defined time limits for annulment.

The law permits the combination of blood money or assessed compensation with additional damages where death or injury results in material or moral harm not fully covered, affirming the principle of full reparation.

Sale contracts were updated with clearer regulation of sale by sample and by model, enhanced protection in cases of gross inadequacy in real estate sales, and strengthened rules governing latent defects. The limitation period for latent defect claims was extended from six months to one year from delivery, unless a longer guarantee is agreed.

Corporate, non-profit, and professional companies

Corporate provisions were modernised to align with commercial legislation. The law distinguishes between civil and commercial companies based on activity and legal form, permits single-person companies, regulates partner withdrawal, continuation, and liquidation procedures, and enhances corporate stability.

A dedicated legal framework for nonprofit companies was introduced, requiring reinvestment of profits into company objectives and supporting sustainable development.

The law also establishes a modern regime for professional companies, regulating ownership, naming, and liability, and introduces independent regulation of mudaraba contracts outside the scope of company law.

Works contracts, insurance, and guarantees

Provisions governing contracts of works were updated to clarify responsibilities, regulate termination, address unforeseen circumstances affecting contractual equilibrium, and empower courts to restore balance.

Insurance provisions were refined, including a comprehensive framework for takaful insurance, while rules governing guarantees were reorganised to protect guarantors and ensure equitable enforcement.