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ARTICLE · 14 NOVEMBER 2013

Limitations On Liability In The UAE - Beware!

Fenwick Elliott LLP
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Many standard form contracts contain provisions limiting the overall liability of the contractor, upon which a contractor unfamiliar with UAE law may place mistaken reliance.

United Arab EmiratesReal Estate and Construction

Many standard form contracts contain provisions limiting the overall liability of the contractor, upon which a contractor unfamiliar with UAE law may place mistaken reliance. The FIDIC Red Book for instance, which is widely used throughout the Middle East region, contains a number of limitations on liability including at clause 17.6, which states:

"The total liability of the Contractor to the Employer, under or in connection with the Contract other than under Sub- Clause 4.19 [Electricity, Water and Gas], Sub-Clause 4.20 [Employer's Equipment and Free-Issue Materials], Sub-Clause 17.1 [Indemnities] and Sub-Clause 17.5 [Intellectual and Industrial Property Rights] shall not exceed the sum stated in the Particular Conditions or (if a sum is not so stated) the Accepted Contract Amount. This Sub-Clause shall not limit liability in any case of fraud, deliberate default or reckless misconduct by the defaulting Party."

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