Under the UAE Civil Code there are three ways to terminate a
contract: by consent, by operation of law and by court order
(Article 267). Articles 892 to 896 of the UAE Civil Code also deal
with the issue of termination of muqawala contracts, which are
contracts for works (i.e. construction contracts).
In accordance with Article 267 of the UAE Civil Code unilateral
termination of a contract can have no legal effect in the UAE, but
the practice of the UAE Courts show that the employer in
construction cases can be entitled to unilaterally terminate a
contract. In a recent Court of Appeal judgment it was held that
"the reason behind this exception is that muqawala contracts
often take a long time to complete and circumstances may change in
the period between contract formation and completion of the
contract work". This exception has its roots in Egyptian law.
In this case, the court held that when a main contractor gives
notice of termination to the subcontractor, the
