Investment opportunities often arrive through trust. A friend introduces a promoter, a business owner offers a share in a project, or someone explains that they can invest your money in the UAE and generate a return. The presentation may look convincing, the opportunity may be genuine, and the people involved may be well known. None of that answers the legal question that should come before the transfer: what exactly am I giving my money for, to whom, and what legal rights will I receive in return?

The first step is to verify the party receiving the investment. A trade name is not enough. The legal name of the company, its commercial registration, licensing authority, licensed activity and current status should be checked. If an individual is negotiating on behalf of a company, you should also verify that the person has authority to bind it. The UAE Commercial Register framework and company legislation make corporate identity and registered information central to the legal existence and operation of a business. The UAE also maintains rules concerning beneficial ownership, reflecting the importance of identifying the natural persons who ultimately own or control legal entities.

The next question is ownership. If you are told that your money will buy shares, the documents should explain which company you are acquiring an interest in, what percentage you will own, what class or type of interest you receive, and how that ownership will be formally recorded. If the arrangement is instead a loan, profit-sharing arrangement, joint venture, managed investment or funding of a particular project, the agreement should say so clearly. A promise that you will “receive profits” is not a substitute for knowing the legal nature of the transaction.

Authority and licensing also matter. Some activities in the UAE, particularly financial or investment-related activities, are regulated and may require approval or licensing by the relevant authority. A person who is authorised to operate an ordinary commercial company is not necessarily authorised to collect money from others for investment or to provide regulated financial services. The legal review should therefore consider not only whether the company exists, but whether the proposed activity is one it is legally permitted to conduct.

You should also understand where the money will go. The receiving bank account, the contracting party and the investment structure should make sense together. If the agreement is with one company but the funds are requested to a different company or a personal account, that inconsistency requires an explanation before payment. The same applies where funds will pass through several entities or jurisdictions. Complexity is not necessarily wrongdoing, but unexplained complexity increases risk.

The documentation should then be tested against the commercial promise. If you are being told that your capital is protected, where is that protection in the contract? If you have been promised a fixed return, what creates the obligation to pay it and what happens if the business cannot do so? If the investment is tied to a specific asset or project, does the investor obtain any right over that asset, or only a contractual claim against the promoter? If you are becoming a shareholder, what information rights, voting rights, dividend rights and exit mechanisms will you have? The answers should come from the legal documents, not from the sales conversation.

Good legal due diligence also looks for problems that may not appear in the investment proposal: existing shareholders, restrictions on transfer, material contracts, litigation, regulatory issues, debts, security interests, key licences and the authority of the people controlling the business. The scope will depend on the size and nature of the investment, but the principle is consistent: before accepting the upside, understand the legal structure that carries the downside.

The UAE’s new Civil Transactions Law has also strengthened the legal framework around pre-contractual negotiations by recognising duties concerning disclosure of fundamental information. That development is particularly relevant where a party is making a decision based on information provided before the final agreement is signed. It does not remove the need for due diligence; it reinforces the importance of making investment decisions on accurate and sufficiently complete information.

No legal review can tell you whether a business will be profitable, and legal due diligence is not financial investment advice. It cannot eliminate market risk or guarantee that a promoter will perform. What it can do is confirm what can be verified, identify inconsistencies, explain the rights you are actually receiving and highlight protections that should be negotiated before your funds leave your control.

A useful rule is therefore simple: do not allow the transfer of money to become the first legally significant step in the transaction. The legal structure, the identity and authority of the parties, the investment documents and the essential protections should be understood before payment. If the opportunity cannot withstand that level of scrutiny, that is itself information an investor should have before deciding whether to proceed.

Most shareholder problems are predictable. One owner wants to reinvest profits while another wants distributions. A founder believes that operational control should remain with them even after bringing in an investor. New funding is needed, but the parties disagree over who should contribute and what happens if someone does not. A shareholder wants to sell, a relationship breaks down, or a key individual dies or becomes unable to participate. The difficulty is rarely that nobody could imagine these events. It is that the parties did not agree what would happen before the relationship was tested.

A shareholder agreement is valuable because it allows the owners to move beyond the basic fact of ownership and agree how the company will actually be governed. That starts with decision-making. Not every matter should require unanimous consent, but some decisions may be too important to leave to an ordinary majority. Borrowing above a certain amount, issuing new shares, changing the business, selling major assets, approving related-party transactions or replacing senior management may justify specific approval thresholds. The objective is to distinguish normal management from decisions that fundamentally change the owners’ bargain.

The agreement should also address management authority. Under the UAE Commercial Companies Law, managers of limited liability companies operate within the powers given by law, the memorandum of association and their appointment terms, and certain acts may require partner consent or express authority. Managers can also incur liability for breaches, negligence or failure to exercise the required care. For shareholders, this makes it important to understand who can sign, who can commit the company, which matters require escalation and how conflicts of interest are handled.

Funding is another recurring source of disagreement. A growing company may need additional capital long before it produces distributable profits. The shareholder agreement should address whether future funding is expected, whether it will be provided as equity or shareholder loans, and what happens if one shareholder is unable or unwilling to contribute. Without a clear mechanism, a funding request can quickly become a dispute about dilution, control and fairness.

Profit distribution also needs realistic treatment. The UAE Companies Law contains mandatory rules concerning profit and loss allocation and prohibits fictitious distributions. A private agreement should therefore be designed to work with the company’s constitutional documents and applicable law, not assume that shareholders can contract around mandatory rules. Commercial expectations about dividends, retained earnings and reinvestment should be recorded in a way that can operate legally within the company structure.

Transfer and exit provisions may be the most important clauses that nobody wants to discuss at the beginning. The agreement should consider whether shareholders can freely sell, whether the others have pre-emption rights, whether a majority sale can require minority participation, and whether minority shareholders receive protection if control is sold. Founders and investors may also want restrictions on transfers to competitors or unsuitable third parties. These provisions are far easier to negotiate while the parties still want to be in business together.

Deadlock deserves particular attention where ownership or voting power is evenly balanced. Simply requiring unanimous agreement can preserve control, but it can also paralyse the company. A useful agreement should provide a sequence for resolving serious deadlock: escalation to senior principals, negotiation, mediation, a buy-out mechanism or another carefully designed exit route. The right mechanism depends on the business and the relationship; a clause copied from another transaction can produce unintended results.

Confidentiality, competition, intellectual property and related-party dealings may also be important, particularly where shareholders bring their own businesses, clients or technology into the relationship. The contract should separate what belongs to the company from what remains with a shareholder and address what happens when someone leaves.

The shareholder agreement should not be treated as a document that sits separately from the company’s memorandum of association, licences and corporate records. Some rights need to be reflected in the constitutional or registered documents to have the intended effect, and mandatory provisions of UAE law will prevail over inconsistent private arrangements. The documents should therefore be reviewed as one governance package rather than drafted in isolation.

The best shareholder agreement is not the one that anticipates every theoretical dispute. It is the one that answers the questions that matter to this company and these owners: who controls what, how money is put in and taken out, what happens when interests diverge, and how a shareholder can leave without destroying the business. Those questions are easiest to answer before anyone needs the clause. Once the disagreement has already started, the negotiation is no longer about planning; it is about leverage.

A contract does not protect you simply because it is long, detailed, signed by both parties or written in formal legal language. It protects you when it accurately records the transaction you believe you are entering into, clearly allocates the risks that matter, and gives you workable rights if the other party does not perform as expected.

Many commercial disputes arise even though the parties have a signed contract. Payment is delayed, a service does not meet expectations, a supplier misses a deadline, an investor understands the arrangement differently, or one party wants to exit and discovers that the agreement does not provide a practical way out. The real question is therefore not whether a contract exists, but whether it was drafted to deal with the problems that could realistically arise.

Protection starts with the identity of the counterparty. You should know exactly who you are contracting with, whether that entity legally exists, whether it is licensed for the relevant activity where required, and whether the person signing has authority to bind it. A carefully drafted agreement can still provide little practical protection if the wrong company signs it, the signatory lacks authority, or the party making the commercial promises is not the party that assumes the contractual obligations.

The contract should then describe the commercial bargain with enough precision that an independent reader can tell whether it has been performed. What exactly is being supplied? When is delivery due? What standard must the work meet? Who approves it? When does payment become due? Is payment conditional on delivery, acceptance, certification or another event? Expressions such as “as agreed”, “as required” or “to the client’s satisfaction” may create uncertainty if the contract does not also explain how the relevant decision is made.

The UAE’s new Civil Transactions Law, Federal Decree-Law No. 25 of 2025, has applied since 1 June 2026. It reinforces the importance of the parties’ consent and what they have actually committed to, while requiring contractual interpretation to take account of intention, surrounding circumstances, good faith and, where relevant, commercial custom. The new law also introduced a more developed framework for pre-contractual negotiations and disclosure of material information. The practical lesson is simple: the final document should reflect the real deal, not leave essential points in informal conversations, presentations or messages that were never properly incorporated into the contract.

A protective contract must also deal with risk. Liability, indemnities, warranties, insurance, payment security and limits of liability are not merely technical clauses. They answer a commercial question: if a particular problem occurs, who carries the financial consequence? A liability cap may be reasonable in one transaction and unacceptable in another. An indemnity may appear broad but fail to address the loss that is most likely to arise. These provisions should be tested against the actual transaction rather than accepted simply because they appear in a standard template.

The same applies to termination. A useful contract should distinguish between a breach that can be corrected and a serious breach that justifies suspension or termination. It should address notice, cure periods where appropriate, outstanding payments, return of property, confidential information, unfinished work and obligations that survive termination. If the only realistic response to a breach is to begin a full dispute, the agreement may not be protecting the commercial relationship as efficiently as it could.

The dispute resolution clause also deserves careful attention before signature. Governing law, court jurisdiction and arbitration are not boilerplate. They determine where and how a future dispute may be resolved and may affect cost, speed and enforcement. Under the UAE Arbitration Law, an arbitration agreement must be in writing. Businesses should therefore understand the dispute mechanism they are accepting rather than treating it as a clause to review only after a dispute begins.

Finally, the contract should control change. Commercial relationships evolve, and parties frequently alter scope, price, timelines or responsibilities through emails, WhatsApp messages, quotations or verbal discussions. A protective agreement should state who can approve variations, how they become binding, and how formal notices are delivered. That prevents the written contract from becoming disconnected from the way the business relationship actually operates.

The strongest contracts are not necessarily the most aggressive. Protection usually comes from precision, realistic risk allocation and practical remedies. Before signing, imagine that the relationship has gone wrong six months later. Can you identify exactly what the other party was required to do? Can you prove whether it failed? Do you know what you can do next, whether you can stop further loss, and where a dispute would be resolved? If those answers are unclear, the contract probably still needs work.

A legal review cannot eliminate commercial risk or guarantee performance. What it can do is reduce uncertainty, expose problems before signature and place you in a materially stronger position if circumstances change. The best time to ask whether a contract protects you is therefore before you sign it, not after the dispute has already started.

When a commercial relationship begins to fail, the instinct is often to send the strongest possible legal notice immediately. Sometimes that is the correct step. In other cases, escalation before the facts and contract have been properly reviewed can damage a position that could have been stronger. The first task in a dispute is not to sound aggressive. It is to understand the case.

Start with the documents. The signed contract, amendments, purchase orders, invoices, delivery records, certificates, emails, messages and meeting records should be collected before people begin relying on memory. Commercial disputes frequently turn on events that were documented informally: an extension agreed by email, an approval sent through WhatsApp, a complaint that was never formally acknowledged, or work carried out after the original scope changed. Preserving that material early reduces the risk that evidence is later lost or taken out of context.

The contract should then be read as a dispute document rather than as a transaction document. What exactly was each party required to do? Were there conditions that had to be satisfied before payment or performance became due? Did the agreement require a particular form of notice? Is there a cure period? Does termination require a warning? Are there contractual limits on liability or specific procedures for claims? A demand that ignores the agreed procedure may create avoidable arguments about whether the claim was properly made.

The dispute resolution clause is especially important. The contract may require UAE court proceedings, arbitration or another forum. If it contains an arbitration agreement, the UAE Arbitration Law requires that agreement to be in writing, and the arbitration clause is generally treated as legally separate from the rest of the contract. The clause may also identify an arbitral institution, seat, number of arbitrators and language. Those details affect how the case should be prepared and which procedural steps come next.

The business objective should be defined before the legal strategy. Does the client want payment, completion of the work, return of property, termination, preservation of a long-term relationship, or a clean commercial exit? The strongest legal position is not always the strategy that best serves the business. A claim worth pursuing against an operating counterparty may be uneconomic against an entity with no recoverable assets. A technically valid termination right may be less valuable than completing a profitable project. Legal strength, commercial objective and enforceability should be considered together.

Communications during this period require discipline. Senior employees may be frustrated and send messages that contain admissions, threats or inconsistent positions. Different departments may communicate separately with the counterparty. A company should establish who speaks on the dispute, which issues require legal review, and how settlement discussions are recorded. The purpose is not to stop commercial communication; it is to avoid creating unnecessary evidence against the company’s own position.

Early legal assessment should also identify deadlines. Contractual notice periods, limitation issues, arbitration timelines and procedural requirements may all affect the available options. Some problems can be corrected if identified immediately and become difficult or impossible to correct later. Waiting for negotiations to fail before checking deadlines is a common and avoidable risk.

Settlement should not be treated as an admission of weakness. A negotiated solution can preserve value that litigation or arbitration cannot. The key is to negotiate from an informed position. That means understanding the evidence, legal exposure, likely cost, enforcement prospects and the consequences of delay. A settlement reached after those issues are assessed is a strategic decision, not simply a compromise.

If escalation becomes necessary, the earlier preparation should make the transition more efficient. The chronology is organised, evidence is preserved, the contract has been analysed, the correct forum is identified and the client’s objective is clear. That work is useful whether the next step is a formal demand, arbitration, court proceedings or a structured settlement process.

A commercial dispute is rarely improved by uncertainty. The first few days should therefore be used to replace reaction with structure. Preserve the record, understand the contract, identify the forum and deadlines, define the business objective and only then decide how strongly and how quickly to escalate. The best dispute strategy often begins before the first legal letter is sent.

Many businesses operate successfully for years without describing what they do as “governance”. The founder approves payments, a trusted manager signs contracts, important decisions are discussed informally, and the finance team knows which matters need senior approval. That can work while the company is small and the same people remain involved. Growth changes the risk.

As more employees, managers, shareholders and business units are added, informal authority becomes harder to understand. A contract may be signed by someone who believed they had approval. A related-party transaction may proceed without independent review. Two managers may give conflicting instructions. The company may have policies on paper that nobody has been assigned to implement. Governance becomes important when personal knowledge is no longer enough to control the organisation.

At its most practical level, governance answers a few basic questions: who has authority to make which decisions, who can bind the company, which matters must be escalated, what approvals must be documented, and how management remains accountable to the owners. A growing business does not necessarily need a large governance manual. It needs a structure that reflects the decisions it actually makes.

The company’s constitutional documents are the starting point. They determine ownership, management powers and formal decision-making rules. Under the UAE Commercial Companies Law, managers of limited liability companies have legal duties and can be liable for damage arising from breaches of the memorandum of association, their appointment terms, negligence or failure to exercise the care expected of a prudent person. Certain acts also require partner consent or express authority. The internal approval system should therefore be consistent with the company’s legal structure rather than operate as an informal parallel system.

A delegated authority matrix is often one of the most useful governance tools. It can set financial limits, define who signs contracts, identify matters requiring two approvals and reserve significant decisions for shareholders or the board. The objective is not to slow the business down. It is to allow routine decisions to happen quickly while ensuring that high-risk decisions receive the level of review they deserve.

Internal policies serve a similar purpose. Conflicts of interest, procurement, expenses, data handling, gifts, employment matters, complaints and regulatory responsibilities may all require clear internal rules depending on the business. The policy should identify responsibility and escalation, not simply repeat the law. A policy that nobody understands or follows creates the appearance of control without the substance.

Record-keeping is another essential part of governance. Important decisions should be capable of being reconstructed later. Minutes, written resolutions, approval emails and properly maintained corporate records can establish why a decision was made and who authorised it. This becomes especially important when shareholders change, a regulator asks questions, an investor conducts due diligence or a dispute arises.

Related-party transactions require particular care because the same person may sit on both sides of the commercial decision. The UAE Companies Law contains restrictions and approval requirements for certain dealings involving managers and related parties. Even where a particular transaction is legally permissible, the company should be able to demonstrate that conflicts were identified and the decision was properly approved.

Governance should also evolve with the company. A structure suitable for a founder-owned consultancy may be inadequate after external investment, rapid hiring or expansion into several jurisdictions. Bringing in an investor usually increases expectations around reporting, reserved matters, budgets, financial controls and access to information. The governance framework should be reviewed when the risk profile changes, not only when something goes wrong.

The value of governance is often most visible in a crisis. When there is a dispute over authority, a regulatory issue or a disagreement between owners, the company either has a record of how decisions are meant to be made or it has to reconstruct that system after the event. The second option is slower, more expensive and much less reliable.

Good governance is therefore not about making a business more corporate for appearance’s sake. It is about making authority visible, decisions defensible and accountability clear. When a company grows beyond the point where one person can safely hold the entire system in their head, governance stops being administrative formality and becomes risk management.

Employment disputes often begin with a gap between the written contract and the way the employment relationship actually operates. The contract says one thing, the offer letter says another, the payroll reflects a third arrangement, and an internal policy introduces conditions that were never clearly communicated. When the relationship is good, those inconsistencies may appear harmless. When employment ends, they can become the centre of the dispute.

The employment contract should therefore reflect the real commercial arrangement from the beginning. The employee’s role, salary structure, allowances, working arrangement, notice period and any material benefits should be recorded consistently with the documents and systems used by the employer. In the UAE, the distinction between basic wage and total wage can affect statutory entitlements, which makes inaccurate salary breakdowns more than an administrative issue.

Employers should also be careful when using bonuses, commissions and incentive schemes. The contract should make clear whether an amount is fixed, discretionary, conditional on performance, linked to a defined formula or subject to the employee remaining in employment on a particular date. If an incentive is intended to depend on measurable targets, the targets and the consequences of not achieving them should be stated in a way that can actually be administered. A scheme that gives management unlimited discretion may create different problems from one that accidentally turns an intended bonus into an unconditional contractual entitlement.

Notice provisions must also comply with the UAE Labour Relations Law. Article 43 provides that, in the circumstances covered by that provision, contractual notice is generally required to be not less than 30 days and not more than 90 days, subject to the law’s detailed rules. The contract should therefore avoid notice terms copied from foreign templates without checking whether they fit the UAE framework. Probation, termination and the consequences of leaving employment should likewise be reviewed against the applicable law and regulations rather than left to generic wording.

Confidentiality and protection of business information are particularly important for employees who handle customers, pricing, strategy or proprietary material. The contract should define the obligation clearly and work together with practical controls inside the business. A confidentiality clause cannot compensate for unrestricted access, weak document controls or the absence of an off-boarding process. Legal protection is strongest when contract wording and internal practice support each other.

Non-compete provisions require the same care. Employers often want a broad restriction that prevents an employee from joining any competitor. An enforceable restriction must be considered against the statutory framework and the employee’s actual role, the legitimate interest being protected, geography, duration and the nature of the restricted activity. A narrowly designed clause connected to a genuine business interest is usually more useful than language drafted simply to be intimidating.

Internal policies should also be integrated with the employment framework. UAE labour legislation requires employers to maintain work regulations and employment-related rules in accordance with the applicable controls. Policies dealing with conduct, disciplinary procedures, leave, remote work, expenses, incentives, information security and workplace complaints should be consistent with the contract and communicated in a way that allows the employer to rely on them fairly.

Documentation becomes especially important when performance or conduct becomes an issue. If the employer expects to rely on warnings, targets, investigations or performance improvement measures, the process should create a clear and contemporaneous record. Waiting until termination to reconstruct months of informal concerns weakens decision-making and makes the employer’s position harder to explain.

The contract should also anticipate how employment ends. Final payments, return of property, access to systems, confidential information, customer handover and continuing obligations should all be managed through a structured exit process. Article 47 of the Labour Relations Law also provides specific protection against termination because a worker made a serious complaint to the Ministry or brought a claim that proved valid, which is one reason termination decisions should be based on documented and lawful grounds.

No employment contract can remove the protections created by mandatory labour law, and a contract should not attempt to do so. Its purpose is to create clarity within that framework. The strongest employment documentation is therefore not the longest set of restrictions. It is a consistent system in which the offer, contract, policies, payroll and day-to-day management all describe the same employment relationship.

For employers, the practical question is simple: if the employment relationship ended tomorrow, would the documents clearly show what was agreed, what happened and why the employer took the decision it did? If not, the issue is better corrected while the relationship is still functioning than after it has become a dispute.

Buying an existing business can be faster than building one from the beginning. The licences, employees, contracts, customers and operating history may already be in place. That convenience is also the source of the principal legal risk: a buyer may acquire not only the business it wants, but also liabilities and restrictions created before it arrived.

The first question is what exactly is being purchased. In a share acquisition, the buyer acquires an interest in the company itself. The company ordinarily continues to own its assets, owe its liabilities and remain party to its contracts. In an asset transaction, the buyer instead acquires identified assets or business components, subject to the transfer requirements that apply to each of them. The legal due diligence process should therefore be designed around the structure of the proposed deal. Reviewing a share purchase as though it were simply a list of assets can miss the liabilities that remain inside the company.

Corporate ownership and authority come first. The buyer should verify the legal existence of the target, its licence, ownership records, constitutional documents, managers and authorised signatories. Any restrictions on transferring the relevant interest should be identified early. The UAE Commercial Companies Law and the relevant licensing regime may affect how ownership can be transferred and which approvals or corporate steps are required. If the seller cannot legally deliver the interest being sold, commercial negotiations about price become secondary.

The review should then examine what gives the business its value. Key customer and supplier contracts may contain change-of-control provisions, termination rights, exclusivity obligations or restrictions on assignment. A valuable lease may not automatically remain available after a transaction. Intellectual property may be used by the business without being properly owned by it. Important equipment may be leased, financed or subject to security. A buyer should distinguish between assets the company actually owns and assets it merely relies on.

Employees and management arrangements can also materially affect the transaction. The buyer should understand key employment terms, accrued liabilities, incentive arrangements, pending disputes and the dependency of the business on particular individuals. If the commercial rationale for the acquisition depends on founders remaining for a transition period, that expectation should be converted into binding transaction documentation rather than left as an informal understanding.

Disputes, regulatory history and compliance should be considered with the same seriousness as financial information. Existing claims, threatened proceedings, unpaid obligations, regulatory notices or compliance gaps can alter the value of the target even if they have not yet resulted in a judgment or penalty. Legal due diligence is not limited to finding current liabilities; it should identify facts that could reasonably develop into liabilities after completion.

The buyer also needs to understand the company’s financial and tax position, although those areas will usually require accountants and tax specialists alongside legal counsel. The legal team should coordinate with those advisers because a financial issue may have contractual consequences and a legal issue may affect valuation. Material debt, guarantees, security, related-party balances and unusual payment arrangements often require both legal and financial analysis.

Due diligence findings are useful only if they influence the deal. A serious issue may justify walking away, but many findings are instead addressed through the transaction structure. The buyer may require a problem to be corrected before completion, reduce or defer part of the price, retain money, obtain a specific indemnity, require warranties, or make completion conditional on an approval or document being obtained. The purpose of due diligence is therefore not to produce a long report. It is to give the buyer information that changes the contract or the decision.

The sale agreement should then allocate risks that cannot be eliminated before closing. Representations, warranties, indemnities, disclosure processes, liability limits and claim procedures all determine who bears the consequences if the information provided about the target proves incomplete or inaccurate. These provisions should be linked to the findings from due diligence; generic warranties cannot substitute for a known risk that requires a specific solution.

Closing mechanics deserve equal attention. The buyer should know which documents will be signed, which approvals are required, when funds are released, how ownership is transferred, and what evidence confirms that completion has occurred. Where several steps must happen together, the transaction documents should prevent the buyer from paying before the legal conditions for transfer have been satisfied.

Legal due diligence does not make a business successful and it cannot uncover information that is deliberately concealed and unavailable through reasonable review. Its purpose is more practical: to test whether the legal reality matches the business being sold, identify the risks that can be discovered, and ensure that those risks are reflected in the buyer’s decision and documents. A buyer should know what it is acquiring before the price becomes irreversible.

Cross-border contracts often contain a short clause saying that the agreement is “governed by UAE law” or that disputes are subject to the courts of a particular place. That may look complete, but international transactions involve several different questions. Which law governs the contract? Which court or tribunal can hear the dispute? Which procedural rules apply? And if you win, where are the counterparty’s assets and how will the judgment or award be enforced?

The UAE’s new Civil Transactions Law addresses the law applicable to contractual obligations. Article 19 provides, in general terms, that the form and substance of contractual obligations are governed by the law expressly agreed by the parties. If the parties do not agree, the law sets out connecting rules based on common domicile, the place where the main contractual obligation is to be performed and the circumstances of the transaction. Contracts relating to immovable property are governed by the law of the property’s location. Special laws and international treaties can also override the general rules.

That makes an express governing-law clause important, but governing law is not the same as jurisdiction. A contract may be governed by UAE law while disputes are heard in another forum, or an arbitral tribunal may apply UAE law even though the arbitration is seated elsewhere. Article 21 of the new Civil Transactions Law separately recognises that judicial jurisdiction and procedural matters are governed by the law of the place where the proceedings are conducted. Businesses should therefore avoid using “governing law” and “jurisdiction” as though they mean the same thing.

The choice of forum should be made with enforcement in mind. If the counterparty’s assets are in another country, a judgment obtained in the UAE may ultimately need recognition and enforcement there. The practical value of the forum clause therefore depends partly on where the other party and its assets are located, which treaties or reciprocal arrangements may apply, and whether local law permits recognition of the relevant judgment or award. This is a transaction-specific question and should be considered before the dispute arises.

Arbitration is frequently used in cross-border contracts because it allows the parties to select a neutral process and can provide an established framework for international enforcement. The UAE Arbitration Law requires arbitration agreements to be in writing. A useful arbitration clause should do more than say “disputes shall be arbitrated”; it should identify the agreed institution or rules, seat, language and number of arbitrators where appropriate. Uncertainty in the clause can create a procedural dispute before the substantive dispute is even reached.

The contract should also be written for cross-border performance. Currency, payment method, tax responsibilities, delivery terms, required approvals, sanctions or regulatory restrictions where relevant, notices, language priority and document execution can all become important when the parties operate in different countries. A notice clause that works domestically may be impractical if the other party has moved or relies on an overseas registered office. A payment clause may be clear about amount but silent on banking charges, currency conversion or the account into which payment is validly made.

Corporate authority should also be checked. A company incorporated outside the UAE may be signing through a representative whose authority is governed by another legal system. Documents may require notarisation, legalisation or certified translation for use in the UAE or abroad. The contract should not assume that a signature that looks commercially acceptable will automatically satisfy every formal requirement relevant to enforcement.

Cross-border transactions also require care where a UAE mainland entity, a free-zone entity, a DIFC or ADGM entity, or an overseas company is involved. Different legal and regulatory frameworks may apply, particularly in financial free zones or regulated sectors. The name “UAE company” does not by itself answer which legal regime governs every aspect of the relationship.

None of this means that an international contract needs to become excessively long. It means the dispute and enforcement architecture should be deliberate. A business should know which law governs, where disputes are resolved, which language controls, how notices are served, and where a successful result is likely to be enforced. Those decisions should fit the commercial transaction rather than be copied from the last contract.

The most expensive cross-border clause is often the one nobody thought about because there was no dispute at the time of signing. If the parties wait until a problem arises to ask which law applies, where proceedings belong and whether the counterparty has reachable assets, the contract has already missed an important opportunity to reduce uncertainty.