UAE Lowers Age of Majority to 18 in Sweeping Overhaul of Civil Transactions Law

The UAE has enacted a landmark federal decree law reforming civil transactions and reducing the age of majority from 21 lunar years to 18 Gregorian years, marking one of the most significant updates to the country’s civil legal framework.

The new legislation establishes a comprehensive and integrated system governing legal acts, contracts and civil relationships. It reflects a broader national strategy to modernise legislation, simplify legal concepts, unify references across laws and eliminate duplication with recently enacted specialised statutes.

From a judicial standpoint, the law expands the scope of judicial reasoning by granting courts wider discretion to apply the principles of Islamic Sharia where no explicit statutory provision exists. Judges may now select solutions that best serve justice and public interest without being bound to a single school of jurisprudence. This flexibility also applies to matters involving persons of unknown parentage, missing persons and absentees, where special legislation may be absent.

Strengthening legal capacity and free will

A central feature of the reform is the reinforcement of individual legal capacity and protection of free will in legal acts and contracts. The law seeks to balance personal autonomy in managing legal and financial affairs with safeguards against exploitation or harm, particularly for minors and vulnerable individuals.

Under the new regime, the age of majority has been unified at 18 Gregorian years, aligning the UAE with prevailing comparative legal systems and ensuring consistency with juvenile, labour and criminal responsibility laws. In a related reform aimed at supporting youth entrepreneurship, the minimum age at which a minor may seek judicial authorisation to manage their assets has been reduced from 18 Hijri years to 15 Gregorian years.

Individuals who are unable to express their will due to incapacity may now be supported by a court-appointed judicial assistant, tasked with assisting in actions that serve their best interests.

Property, assets and possession

The law reorganises rules governing proprietary rights, including usufructuary construction rights. Such rights must now be registered with the competent authority, with clearer provisions defining the holder’s obligations and allowing parties to determine the duration of the right.

It also provides that financial assets located in the UAE belonging to a foreigner who dies without heirs will be designated as a charitable endowment, subject to supervision by the relevant authority to ensure proper management and allocation.

New provisions governing assignment have been introduced, alongside enhanced protection of possession through preventive actions designed to stop new acts of encroachment before damage occurs.

Contracts and negotiations

For the first time, the law establishes a structured framework for pre-contractual negotiations, imposing an obligation on parties to disclose fundamental information necessary for informed and conscious decision-making. This is intended to enhance transparency, build trust and reduce disputes.

The legislation also introduces the concept of a framework agreement to regulate recurring or long-term contractual relationships by predefining essential terms, reducing time and cost, and providing a consistent legal reference for subsequent contracts.

In terms of contractual capacity, financial acts by a discerning minor that involve both benefit and detriment are now considered voidable in the minor’s interest, rather than suspended. Guardians may seek annulment within one year of knowledge, while the minor may do so within one year of reaching majority.

Compensation, sales and disputed rights

The law permits the combination of blood money or assessed compensation with additional damages where death or injury results in material or moral harm not fully covered by such compensation.

Sale contract provisions have been modernised, including clearer rules for sale by sample and by model, enhanced protection for persons lacking full capacity in cases of gross inadequacy in real estate transactions, and strengthened rules on latent defects. Buyers may reject goods, accept them with a price reduction, or request a defect-free substitute. The limitation period for claims relating to latent defects has been extended from six months to one year from delivery, unless a longer guarantee is agreed.

Detailed rules now govern the sale of disputed rights, prohibiting judges, prosecutors, court officials and lawyers involved in a dispute from acquiring such rights, on pain of nullity, to safeguard judicial integrity.

Corporate, employment and insurance reforms

Corporate provisions have been updated to align civil transactions law with commercial legislation. The law distinguishes between civil and commercial companies based on activity and legal form, permits single-person companies, regulates partner withdrawal and company continuation, and modernises liquidation procedures to enhance corporate stability.

A dedicated framework for non-profit companies has been introduced, requiring reinvestment of profits into the organisation’s objectives. The law also establishes a modern regime for professional companies and independently regulates mudaraba contracts outside traditional company law.

Provisions governing contracts of works and employment-related arrangements have been refined to clarify responsibilities, regulate termination and address unforeseen circumstances affecting contractual balance, with courts empowered to restore equilibrium through adjustment or termination.

Insurance provisions have also been streamlined, including a comprehensive framework for takaful insurance, while rules on guarantees have been reorganised to protect guarantors and ensure fair enforcement.

A foundational legislative shift

As the largest federal law in the UAE, the new civil transactions decree law serves as the primary reference for most federal legislation governing legal acts and contracts. By adopting clearer legal concepts, enhancing judicial flexibility and aligning legal capacity with modern standards, it represents a qualitative shift in the regulation of civil transactions and a cornerstone of the UAE’s evolving legal architecture.

 

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