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Types of Breach of Contract in UAE

When you have a contract with clients, both parties have protection. However, when a client tries to not honor the agreement that you both have, what should you do? There’s a couple of questions you may have when you experience a breach of contract with a client. Here are some of the common ones:

  • Does it mean the entire agreement is void when a party breaches a contract?
  • What happens when a provision in a contract has not been followed?
  • What if a breach of contract can benefit a client? Will it make a difference when I bring the case to the local court?

In this article, we’ll provide you with a quick guide on breaches of contract in UAE, the most common types, and what you should do when you experience a contract breach. Before we delve into the different types of breach of contract in UAE, let’s first tackle what a contract is. 

A contract in UAE is seen as an agreement between signatories and the agreement is enforceable and legal in the eyes of the law. To give you an example, let’s say you whipped up an agreement with a client to start providing personal training sessions. The client, in the agreement, promises to pay a certain amount of money for personal training. You nail the details down and both parties to the agreement understand the terms. This is when a contract is established. 

What are the types of Breach of Contract in the UAE?

There are different kinds of contract breach. They are considered a breach when there is a violation in the contractual obligation of a party without an excusable reason. 

  • Material Breach 

 A material breach happens when a party fails in performing its duties as laid upon in the agreement. The material breach results to the non-breaching party getting something that is substantially different from what’s agreed earlier. With a material breach, performance from the non-breaching party will not be required. A material breach in UAE would occur if you’ve agreed to design for your client a workout plan, but you’ve sent the same client with a meal plan rather than a workout plan. 

  • Minor Breach 

Despite some variation with the agreement, minor breaches occur when a party receives what’s agreed in the agreement. With a minor breach, a non-breaching party still has to perform its obligations legally. An example is when you forgot to give the shopping list together with the exercise and meal plan which you have already agreed upon. 

How will the Court Decide if a Breach is Minor or Material?

When you sue a client or a client sues you for breach of contract in UAE, the local court will be deciding the type of breach that occurred based on several different factors.

They are as follows:

  • Extent to which injured party is deprived of benefit which was reasonably expected; 
  • Extent to which party that failed in performing or to offer in performing will suffer the forfeiture; 
  • Extent to which injured party will be compensated adequately for the benefit in which he’ll be deprived of; 
  • Extent to which behavior of party that failed to perform or offer to perform are within standards of operating in good faith.  

A Property Dispute in Dubai For Breach of Contract

Will a Court Ruling be Required for All Breach of Contract?

It can be in the best interests of parties involved to settle things without the involvement of the local courts. More often than not, a breach of contract in UAE can be settled with the help of mediators or arbitrators. A breach of contract in UAE has the possibility of merely being a misunderstanding. Professional communication with the aid of seasoned lawyers and legal consultants in UAE can quickly diffuse a situation.  

Hassan Humaid Al Suwaidi., LL.B. is a Senior Partner in HHS Lawyers. He has 20 years of experience dealing with high-value and complex cases. Frequently featured in local and international legal directories and commended for his ability to attain favorable outcomes for clients, Hassan has been involved in some of the largest legal settlements. A major part of his work is providing expert legal advice on UAE legislation and acting for individuals and businesses during disputes and litigation.