On 1 January 2026, the UAE ushered in one of the most significant legal reforms of the last decade: the promulgation of changes to the Civil Transactions Law, 2026. While the announcement from WAM reads like a formal legislative update, the implications of this law are far-reaching, practical, and deeply relevant to how people live, contract, invest, inherit, and resolve disputes in the UAE.
This is not a cosmetic amendment. It is a structural recalibration of civil law in the UAE, one that reflects maturity, confidence, and a forward-looking legal philosophy.
From Fragmentation to Coherence: A Unified Civil Framework
One of the defining features of the new Civil Transactions Law is its intentional simplification. Over the years, practitioners and courts alike navigated a dense overlap between the Civil Code and various special laws. The new law deliberately removes duplication, consolidates principles, and creates a clearer hierarchy of legal rules.
For businesses and individuals, this translates into:
- Fewer interpretational conflicts
- Greater predictability in contractual enforcement
- Reduced procedural friction in litigation
In short, the law is designed not merely to exist on paper, but to work in practice.
A Stronger, More Adaptive Judiciary
Perhaps the most intellectually significant shift lies in how courts are empowered to decide cases where legislation is silent.
Under the new law, judges may:
- Refer directly to principles of Islamic Sharia
- Choose the solution that best serves justice and public interest
- Do so without being bound to a specific school of jurisprudence
This approach gives the judiciary flexibility to respond to modern transactional realities, whether digital assets, evolving family structures, or unconventional contractual arrangements, while remaining anchored in legal authenticity.
Related Article: UAE Legal Reforms 2025-2026: How the Nation Reshaped Its Laws.
Capacity, Consent, and the Age of Majority: A Clear Line at 18 years
A landmark reform is the reduction of the age of majority from 21 lunar years to 18 Gregorian years. This aligns civil capacity with labour law, juvenile law, and criminal responsibility, eliminating long-standing inconsistencies.
Why this matters:
- Individuals gain full legal capacity earlier
- Contracts, wills, and financial decisions are less vulnerable to challenge
- Legal certainty is strengthened across civil and commercial dealings.
In a progressive move, the law also allows minors as young as 15 years to seek court permission to manage their assets, an explicit nod to youth entrepreneurship and early financial independence.
Protecting the Vulnerable Without Paralysing Autonomy
The law introduces a modern framework for individuals who are unable to fully express their will due to incapacity. Instead of blanket restrictions, courts may now appoint a judicial assistant to support such individuals, preserving dignity, autonomy, and protection in equal measure.
This balanced approach reflects a deeper philosophical shift: safeguarding individuals without unnecessarily stripping them of agency.
Contracts Reimagined: Transparency Before the Signature
One of the most practical reforms lies in the recognition of pre-contractual obligations. Parties are now under a duty to disclose essential information during negotiations, promoting informed consent and reducing disputes before they arise.
The introduction of framework agreements is equally notable. For long-term or recurring commercial relationships, parties can now predefine core terms, saving time, cost, and future disagreement—an invaluable tool for businesses operating at scale.
Property, Possession, and Registration: No More Grey Areas
On proprietary rights, the law tightens clarity:
- Usufructuary construction rights must now be registered, failing which they are void.
- Obligations of rights holders are clearly defined.
- Duration is left to party autonomy.
A particularly striking provision concerns foreigners who pass away without heirs. Financial assets located in the UAE will now be allocated as a charitable endowment, under the supervision of the competent authority, a rule with direct implications for estate planning and succession strategies.
Full Compensation, Not Symbolic Justice
The law resolves a long-standing judicial challenge by allowing blood money or assessed compensation to be combined with additional damages where death or injury results in material or moral harm beyond what is traditionally covered.
This reform reinforces a modern principle: full reparation, not partial relief.
Modernising Sales, Companies, and Professional Structures
From extending limitation periods for latent defects to regulating sale by sample, disputed rights, and gross inadequacy in real estate transactions, the law significantly strengthens buyer protection.
On the corporate side:
- Single-person companies are formally recognised.
- Clear distinctions are drawn between civil and commercial companies.
- Nonprofit companies receive a dedicated legal framework.
- Professional companies and mudaraba contracts are independently regulated.
The result is a civil law regime that finally speaks the same language as contemporary commercial practice.
Why This Law Matters Beyond the Courtroom
The 2026 Civil Transactions Law is not just a legal update, it is a pivotal legislative milestone and a qualitative shift in regulating Civil Transactions law in the UAE, based on a balanced and contemporary vision that seeks to reorganise the general foundations of rights and obligations, while enhancing the clarity of legal rules and facilitating their practical application. It signals that the UAE’s civil law system is no longer reactive, but anticipatory. It balances Sharia principles with global best practices, individual autonomy with social responsibility, and federal unity with emirate-level governance.
For individuals, families, and businesses alike, this law reshapes the legal landscape they operate in quietly, decisively, and for the long term.
As legal practitioners, our role now is to interpret, apply, and advise within this renewed framework, ensuring that rights are protected, intentions are respected, and justice remains both principled and practical.
