What Contractual Damages Are Awarded Under UAE Law?

Al Rowaad Advocates & Legal Consultants | View firm profile

In a simple language, “damages” are referred to as compensation paid to the claimant for a breach, loss or injury caused by another. Damages are generally confused with the term “damage”, however, they are both are significantly different from each other. Where damages refer to compensation claimed by one party from another and damage is the loss and injury for which one can claim compensation. Damages are often granted in the event there is a breach of a contract or in cases of tort. Civil Lawyers of Dubai has carefully scrutinized the different types of damages claimed or sought and their nature is usually dependent upon the objective behind claiming such damages. Therefore, the present article will let you have a sneak peak on the types of contractual damages one can claim in a case registered before UAE Civil courts.

Categories of Damages under UAE Law

UAE Civil and Commercial Laws takes into consideration the following types of damages:

  • Direct Damages;
  • Loss of Opportunity;
  • Loss of Income or profit;
  • Consequential Damages;
  • Moral Damages;
  • Interest.

Primarily, the Civil Code of UAE allows the plaintiff to seek direct damages as expected by the parties at the time of signing the contract. However, in situations, where the compensation or damages are not clearly defined under the contract, it shall be assessed by the court, depending upon the situation of the case. This is in accordance with Article 389 of the UAE Civil Code which states that “if the compensation amount is not defined by the contract or the law, the judge shall have the authority to assess the amount equivalent to the damage suffered at the time of occurrence.”

The second most significant type of damages considered by courts of UAE are ‘Consequential damages’. However, these damages are confined to the concept of tortious liability and does not apply to a contractual liability.

In addition, the courts of UAE recognise the concept of ‘Loss of Profit/Income’ as one of the categories of damages that can be claimed by the plaintiff. UAE Civil Code, under various provisions discuss the aspect of loss of profit, however, to allow the courts to award ‘loss of profit’ the damage that will be sustained by the plaintiff in future should be certain and not probable or vague.

Moral Damages, another most important categories of damages are clearly defined and acknowledged by Article 293 of the UAE Civil Code which reads as follows:

“The right to claim damage to make good shall entail moral damage and a violation of liberty, honour, dignity, reputation, social standing or any financial condition of the other person. Such damages shall be deemed considered as moral damage.”

Top Lawyers of Dubai often claim the aforementioned damages in any civil claim for contractual violation or breach of contractual obligations. The major concept behind claiming damages is that a reasonable prudent person should be able to predict the amount of damages, if he were to find himself in such contractual circumstances. Nevertheless, establishing the civil claim with the list of damages entailed above is not an easy task, thus, would require the assistance of Best Civil Lawyers in Dubai.

More from Al Rowaad Advocates & Legal Consultants