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.