The distinction between force majeure and hardship has assumed renewed importance in the UAE. Recent guidance published by Dubai’s Department of Economy and Tourism, in partnership with Dubai Chambers and Baker McKenzie, provides a useful practical overview of both concepts at a time when businesses may be dealing with contracts governed by different statutory regimes. The new UAE Civil Transactions Law entered into force on 1 June 2026 and applies principally to facts and contracts arising from that date, while earlier contracts will generally remain subject to the previous Civil Code.
I have previously considered force majeure as part of the broader architecture of contractual risk allocation in the Middle East. The new UAE framework reinforces that approach and sharpens the distinction between the event and its effect on performance. In periods of geopolitical disruption, the analysis should focus on what the event has done to the contractual obligation and whether the result is impossibility, hardship or ordinary commercial risk.
Impossibility remains the starting point
The guide confirms that objective impossibility remains central to force majeure under UAE mainland law. Increased cost, delay, supply volatility or commercial difficulty will not ordinarily be enough. The event must make performance objectively impossible rather than simply more burdensome or commercially unattractive. Causation, unforeseeability, absence of fault and reasonable mitigation also remain important elements of the analysis.
This distinction has obvious practical significance in the current geopolitical environment. The closure of a shipping route, for example, does not necessarily establish force majeure if an alternative route remains available. The guide illustrates this with a primary shipping route rendered unavailable by conflict while another route remains operational at greater cost and with a longer transit time. Performance remains possible and the issue is therefore more likely to concern delay or hardship.
The enquiry should start with the affected obligation: can it still be performed, including through a reasonable alternative? If so, slower, more expensive or commercially unattractive performance will not, without more, establish force majeure.
The type of impossibility matters
Where performance has become impossible, the next question is its extent and duration. The New Civil Code distinguishes between total, partial and temporary impossibility, with different consequences for each.
Under Article 236, total impossibility may extinguish the corresponding reciprocal obligations and result in rescission. Where impossibility is partial, either party may invoke extinguishment of the corresponding part of the reciprocal obligation or seek rescission. In continuing contracts affected by temporary impossibility, the provision contemplates extinguishment of the corresponding reciprocal obligation, amendment of the contract or judicial rescission.
This calls for a more granular assessment of disruption. Parties should identify which obligation is affected, whether performance is wholly or partially impossible and whether the impediment is temporary or permanent. These questions are particularly relevant to long term supply, construction and infrastructure contracts, where disruption may affect only part of the contractual performance or persist for an uncertain period.
Where performance remains possible, consider hardship
Where the force majeure threshold is not met, hardship may become relevant. The guide distinguishes the two concepts by reference to performance: force majeure concerns objective impossibility, where hardship may arise where performance remains possible but an exceptional and unforeseeable event makes it excessively onerous and threatens substantial loss.
The remedies also differ. The guide notes that the New Civil Code broadens the court’s powers in hardship cases, including the ability, depending on the circumstances, to modify contractual obligations, suspend performance or, in exceptional circumstances, rescind the contract to restore contractual equilibrium.
Disruption should be classified before relief is invoked. A substantial increase in transport or material costs may be commercially serious without making performance impossible. Treating such circumstances automatically as force majeure risks invoking the wrong contractual or legal mechanism.
Contractual drafting remains central
The contract remains central. Where the parties have agreed an express force majeure clause, its wording (including qualifying events, triggers, notice, mitigation and consequences) will shape the analysis, subject to mandatory law and public policy.
The drafting exercise should extend beyond listing force majeure events. Parties should consider how the contract allocates the consequences of partial and temporary impossibility, substantial cost increases, supply chain disruption and delay, and whether separate hardship, change in law, price adjustment or termination mechanisms are required. Notice, mitigation and evidence requirements should also operate coherently across those provisions.
Governing law is equally important. The guide distinguishes UAE mainland law from DIFC, ADGM and English law contracts, where force majeure is generally contractual and different legal principles may apply.
Practical takeway
The practical discipline is to characterise the effect of the disruption before selecting the remedy. Practitioners should ask:
• Is performance objectively impossible, or does a lawful and practical alternative remain?
• Is the impossibility total, partial or temporary?
• If performance remains possible, has it instead become excessively onerous?
• What does the contract provide for notice, mitigation, alternative performance and the allocation of additional cost?
• Which statutory regime and governing law apply?
The above avoid treating force majeure as a generic response to geopolitical disruption and keeps the analysis focused on the affected obligation, the contractual allocation of risk and the available remedy.