Strictly by the Rule Book: UAE Construction Law Punishes Deviations from Contract Specifications

In the United Arab Emirates, where construction is one of the most active and high-value industries, contractors are under growing legal scrutiny to deliver projects strictly in line with agreed specifications. A failure to do so, even if minor or unintentional, can amount to a breach of contract and expose them to penalties ranging from withheld payments to outright termination.

 

Industry lawyers and recent court rulings make clear that adherence to specifications under both the UAE Civil Code and standardised contracts such as the FIDIC Red Book is not just a contractual nicety, but a binding legal requirement. With billions of dirhams riding on mega projects in Dubai, Abu Dhabi and beyond, the consequences of deviation are proving costly.

 

FIDIC, (Fédération Internationale des Ingénieurs-Conseils). also known as the Federation of International Consulting Engineers, is a French organisation which lays down the standards for the construction industry.

 

The Legal Framework: Muqawala and the Civil Code

Construction contracts in the UAE fall under the legal category of Muqawala, codified in Articles 872 to 896 of the UAE Civil Code (Federal Law No. 5 of 1985). Under this provision, one party agrees to perform specific works or deliver a result in return for payment by the other.

 

In practical terms, this covers the full range of construction obligations, from design and engineering to execution and supervision. The law requires contractors to comply with agreed specifications and standards at every stage.

 

A 2020 ruling by the Dubai Court of Cassation (Judgment No. 922 of 2020) underscored this obligation. The court held that any deviation from contractual specifications without lawful justification entitles the employer to remedies. If the defect is correctable, the contractor must be given a reasonable opportunity to rectify it -- but persistent or material deviations can justify rescission of the contract.

 

FIDIC Standards: Clear Duties and Limited Flexibility

While the Civil Code provides the statutory backbone, most large projects in the UAE rely on FIDIC contracts -- particularly the 1999 Red Book. These contracts reinforce the principle of strict compliance.

 

Under Clause 4.1, contractors must execute the works exactly as per the contract documents. Clause 1.9 adds a proactive duty: contractors must notify the engineer of any errors, omissions, or inconsistencies in the employer’s requirements. Ignoring such defects not only bars later claims for additional time or cost, but can also be interpreted as tacit acceptance of responsibility.

 

FIDIC also binds contractors to strict quality standards. Clause 7.1 requires proper skill, care, and new materials that conform to specifications. Clause 7.5 empowers the engineer to reject any non-compliant work or material, obligating contractors to rectify or replace at their own expense.

 

The timetable is equally tied to compliance. Clause 8.2 links completion deadlines with specification adherence, while Clause 8.7 allows for liquidated damages if delays arise from defective work. Although FIDIC permits liquidated damages, UAE courts retain discretion under Article 390(2) of the Civil Code to reduce or increase these if they are disproportionate to the actual harm.

 

Critically, under Clause 20.1, contractors must serve written notice of any claim within 28 days of becoming aware of an issue. Missing this deadline extinguishes the claim entirely — a principle upheld by DIFC Courts, which treat notice provisions as binding conditions precedent.

 

Variations vs. Unauthorised Deviations

Construction projects are rarely static. Designs change, site conditions evolve, and employers frequently request adjustments. These are treated as “variations” under Clause 13 of FIDIC.

 

However, not all changes qualify as legitimate variations. Unless approved in writing by the engineer, deviations -- even if practically necessary -- may not be compensated. Article 887 of the Civil Code echoes this by stating that employers are under no obligation to accept or pay for unapproved changes.

 

Failure to follow formal variation procedures can result in disputes over payment, refusal to certify completed works, and claims of breach. In a sector where cash flow is vital, this can cripple contractors.

 

Legal Consequences of Non-Compliance

The penalties for failing to meet specifications are multi-layered and often severe.

 

1. 1. Replacement of Defective Work
   Employers can insist on full demolition and re-execution of defective work, at the contractor’s cost, if deviations are material -- such as use of substandard materials or failure to align with approved structural designs.

2. 2. Withholding Payments
   Both interim and final payments can be frozen until defects are rectified. Clause 7.5 allows engineers to withhold certification for defective work, leaving contractors without cash flow until issues are resolved.

3. 3. Damages and Decennial Liability
   If non-compliance undermines the building’s structural integrity or safety, the consequences escalate under UAE’s decennial liability regime. Contractors and designers remain liable for ten years after handover for serious structural defects, regardless of fault.

4. 4. Termination of Contract
   Clause 15.2 of FIDIC grants employers the right to terminate contracts for serious breaches, including persistent failure to remedy defective work, abandonment, unauthorised subcontracting, insolvency, or even bribery. Contractors expelled from site may also forfeit performance security and face claims for additional costs of completing the project.

 

Defences Available to Contractors

While the law strongly favours strict compliance, contractors are not without potential defences.

 

• Force Majeure
  Article 878 of the Civil Code and Clause 19 of FIDIC recognise relief from liability where breaches are caused by unforeseeable external events beyond the contractor’s control. Typically, this entitles them only to time extensions, not cost recovery.

• Defective Employer Specifications
  If the employer’s design itself is defective, contractors may avoid liability -- but only if they notify the engineer promptly under Clause 1.9. Failing to raise the issue in time forfeits the defence.

• Justified Deviations
  Courts may accept deviations as justified if they were necessary, notified, and free from negligence. However, the burden of proof lies heavily with the contractor, making this a difficult defence in practice.

 

A High-Stakes Industry With Tight Legal Guardrails

The UAE’s construction industry continues to expand at a rapid pace, fuelled by high-profile projects in real estate, infrastructure, and tourism. But with the scale of investment comes rising expectations of legal and technical discipline.

 

Industry experts warn that overlooking compliance is not merely a contractual risk but a potential existential threat to contractors’ businesses. Repeated court judgments demonstrate that employers are well-armed to enforce their rights, whether through rectification orders, damages claims, or termination.

 

For contractors, the message is clear: deviations are not tolerated unless formally approved, and procedural compliance is as important as technical execution. For employers, the law provides a robust safety net to ensure that their investments are protected against substandard delivery.

 

Compliance as a Core Business Strategy

Strict compliance with specifications under UAE construction law is more than a contractual checkbox. It is a legal necessity, central to project risk management and long-term business sustainability.

 

As projects grow in complexity and value, contractors must embed compliance into every level of execution -- from site management to contract administration. Raising timely notices, securing written approvals and avoiding informal shortcuts are no longer best practices, but survival strategies.

 

In a market that thrives on speed and ambition, the legal system is making one principle unambiguous: in the UAE, specification is law.

 

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