In UAE real estate disputes, the term force majeure is often used the moment something goes wrong. But under UAE law, it is not a broad label for every disruption, delay, or financial setback. It has a much more specific meaning.
The real legal question is whether an unexpected event made a party’s obligation impossible to perform, or whether it simply made performance more difficult, more expensive, or more burdensome. That difference is critical in disputes involving property sales, leases, construction projects, handover delays, and development obligations.
Under the UAE legal framework, force majeure applies where a supervening event makes performance impossible. In that situation, the obligation may come to an end, and the contract itself may be cancelled. If only part of the obligation becomes impossible, the relief may be limited to that part. In ongoing contracts, even temporary impossibility may justify suspension or cancellation in some cases.
This is an important point because many parties assume that any serious disruption automatically amounts to force majeure. That is not the case. The legal threshold is high. The issue is not whether the event caused difficulty, but whether it made performance truly impossible.
That is also why force majeure is often confused with hardship. UAE law recognizes that some exceptional public events may not make performance impossible, but may make it so oppressive that the affected party faces serious loss. In these cases, a court may intervene to reduce the burden and restore fairness between the parties. So while force majeure is about impossibility, hardship is about extreme difficulty. The distinction is especially important in real estate disputes, where parties may use the wrong label and weaken their position from the start.
Another key issue is liability for damages. Even if a contract is not cancelled, a party may still argue that it should not be held liable for compensation if the loss was caused by an external event beyond its control. In real estate cases, this can be relevant where one party claims damages for delayed handover, interrupted works, failed delivery, or other forms of non-performance caused by outside events.
These principles play out in different ways across the real estate sector.
In sale and purchase disputes, parties may argue that an external event prevented transfer, registration, payment, delivery, or handover. The first question is always whether the obligation truly became impossible. If it did, force majeure may be available. If the event merely made the transaction more difficult or costly, the legal analysis may fall under hardship instead.
In construction and development disputes, the same reasoning applies. If an unforeseen external event stops work from continuing or prevents completion, parties may seek termination or other legal relief. Where work has already started, disputes may also arise over payment for completed work, expenses already incurred, and the actual benefit received from what has been done.
Lease disputes are often more complex. A tenant cannot assume that every downturn in business or reduction in commercial usefulness automatically suspends rent. At the same time, a landlord cannot assume that every major disruption leaves the lease completely unaffected. Much depends on the wording of the lease, the type of event involved, whether the premises can still legally and physically be used for their intended purpose, and whether the situation amounts to impossibility or only hardship.
In all of these cases, classification and causation are crucial. A party relying on force majeure must do more than point to a dramatic event. It must show exactly how that event prevented performance of the specific obligation in question. Courts and tribunals will also look closely at the contract itself, since many real estate agreements contain tailored force majeure clauses, notice requirements, extension-of-time provisions, termination rights, and exclusions.
That is why the most effective legal analysis usually follows a clear sequence. First, identify the exact obligation. Second, identify the event said to have affected it. Third, determine whether the event made performance impossible or simply more burdensome. Fourth, review the contract for any notice or remedy provisions. Finally, consider what remedy is actually being sought, whether cancellation, adjustment, extra time, or a defence to damages.
Using the wrong legal label can seriously damage a case. A hardship claim presented as force majeure may fail unnecessarily. A valid defence to damages may be missed. A party may also lose protection under the contract if it overlooks notice requirements or relies on general language without proving the necessary causal link.
Conclusion
Force majeure remains one of the most misunderstood concepts in UAE real estate disputes. It can provide powerful relief, but only in limited cases where an unexpected event makes contractual performance genuinely impossible. Where performance is still possible, but has become severely difficult or financially oppressive, the issue may be one of hardship rather than force majeure. In practice, success depends on careful legal analysis, strong evidence, and close attention to the wording of the contract. For developers, landlords, tenants, buyers, and investors, the key is not simply showing that an event was disruptive, but proving exactly how it affected the obligation and what remedy the law and the contract actually support.
For more information and legal consultation reach out to us at +971 52 758 3267 - reception@alsafarpartners.com or visit https://www.alsafarpartners.com .
Written By: Mrs. Kavitha Panicker - Managing Partner at Al Safar and Partners Law Firm.