Q: Hi Hari, I hope this finds you well. I have a query regarding subcontracting for the supply of materials to the site, installation, testing and commissioning. In this regard, I wish to understand whether under the UAE laws an employer can enter into a contract with a subcontractor. Or can the contractor only enter into a contract with the subcontractor? Please provide me with your valuable insight on this. Many thanks. Regards Archit Gupta Advocate

Q: I have signed a contract with a contractor to carry out AC works where the owner of the company has paid me cash with a payment voucher and he asked to provide a security deposit cheque. My scope of work was supposed to be finished in 45 days but delayed due to civil works for more than 4 months, in the interim we have continued to work and finished the works and started the equipment. Our final bill is linked with authority approvals which cannot be accomplished without civil works. I have asked the contractor to pay the VAT and amount for variation which he failed to do so. After 4 months the contractor called to resume the works where I have rejected as he failed to fulfil the contractual obligations. I've written a letter to the owner that I will take legal action if he misuses the cheque. The owner deposited my security cheque and filed a case. If I file a civil case against the owner, am I entitled to get losses incurred due to damaging my relation with the bank and other legal expenses?

Q: I am a contractor and my client has pending payments with him. I have received 5 out of 13 payments I sent him. All the 13 payments are late. All the payments have been signed and approved and he gave me a payment certificate to confirm due date of payment but until this date, it is not paid. Each certificate is delayed out of the 8 balance. They range in delay from 2 weeks to 6 months. What are my rights and the damages I can claim as per the UAE law? Please note that I had to close down my business because I can't afford to run it due to the late payments.

Q: Hello !! I have a query about a payment not getting released by a Contractor for last 1& half year. What should we do?

Q: We are a contracting company based in Dubai. We entered into a contract with our client two years ago, the client released the advance payment at the start. They have caused delays at the site due to which we weren't able to proceed with the work for this duration. We were recently invoiced charges for the delay but they aren't ready and are now trying to terminate us from the contract. They are asking us to repay the advance payment made in 2018 April. Our contracts do not carry any clauses for the security of advances or liquidated damages. Can they still claim back the advance even though we were not the ones responsible for causing the delays? What are the options we have to move forward with this situation?

Q: Hello, My husband and I awarded one of Dubai's contractors to do renovation in our apartment. We paid him 50% in advance according to the contract signed between us. We paid another 20% after some time in response to his request to have an additional amount to buy the materials. The renovation was supposed to be completed in one month, yet, 2 months and a half already passed and the contractor has not even bought the material he promised (tiles, sanitary-ware... etc.). He promises but not delivering, postponing payments in all possible ways. Suppliers of the materials confirmed that payments had not been made by the contractor. We have a clause of damage liquidating (contractor needs to pay 1000 AED/day), but he doesn't seem to take it seriously. What is the best way to deal with this problem? If we take him to court, how much do we need to pay for the file opening? What damages he will experience - license termination? How quick can we have the money back? BR, J.

Q: Would like to file a case in Dubai against a real estate company. They were supposed to build my villa in Marrakech, Morocco. Nothing was done after 5 years. I have paid $ 200000 so far and want my money back. Please advise. Thanks

Q: Greetings, We have issued a Letter of Purchase Order (LPO) to our subcontractor for a project. The payment from the main contractor has been delayed. To speed up the process, we have asked the main contractor to pay the subcontractor on our behalf through a No Objection Certificate (NOC). Since the LPO is from our company, the subcontractor has asked us to give a security cheque in case the payment is further delayed. We have issued the cheque along with a letter stating that they have to return the cheque upon receiving the cheque from the main contractor. The guarantee cheque was used after 3 months even after getting the payment from the main contractor. The subcontractor has started communicating with the main contractor without keeping us in the loop. Due to cash flow problems, we were supposed to leave the project. Can I approach the court asking for the same/twice the amount as compensation due to a breach of trust and a similar amount as a conflict of interest?

Q: I, as a UAE-based Seller, entered a sales agreement with a KSA-based Buyer. The Buyer defaulted on the LC payment, breaching the contract. The goods are stuck at the port as they need original documents, which I am holding to recover the outstanding balance. They later made a partial payment but now threaten to cash the PBG (UAE bank) I provided if don't release the document. The contract mandates DIAC arbitration but lacks a governing law clause. I need advice on: 1. Which law applies to this dispute? 2. Where can I seek an injunction to prevent PBG encashment, given the Buyer’s bad faith and breach? Or should I send a letter to their bank with the brief above? Kindly advise.

An interview-format article covering the topic of contracts in the UAE. This is from the legal podcast of lawyer Ludmila Yamalova, the founder of Lawgical with LYLAW.

The provisions of this law, promulgating UAE Civil Code, govern the civil transactions in the United Arab Emirates. The commercial transactions remain subject to the laws and regulations applicable in their regard.