UAE lowers age of maturity to 18 years in landmark legal shift
THE UAE has lowered the age of legal maturity from 21 to 18 under a new federal decree law issuing an updated Civil Transactions Law.
The reform also amends the minimum age for guardianship over financial affairs, allowing individuals aged 18 to manage their assets, while permitting those aged 15 to apply for permission to administer their property.
The changes are intended to empower young people, support entrepreneurship and strengthen legal protections, including provisions that allow the combination of diya (blood money) with additional compensation to ensure full redress for material and moral harm.
The UAE has issued a federal decree law on civil transactions described as the most comprehensive unified law of its kind, introducing wide-ranging reforms aimed at modernising legal practice and strengthening protections across civil and commercial dealings.
According to the decree, the law introduces clearer rules governing compensation, contracts, insurance, sales and professional activity, aligning the country’s civil legal framework with contemporary economic and social realities.
Among the key changes is the provision allowing diya to be combined with additional compensation or Arsh, ensuring full redress for harm resulting from death or injury where moral or material damages are not fully covered. The law also resolves legal ambiguities that had previously arisen before the courts in such cases.
The legislation establishes a new legal framework for non-profit companies, regulating their operations in line with recent legislative amendments and reinforcing their role in supporting sustainable development.
A judicial perspective
From a judicial perspective, the law expands the scope of judicial reasoning and grants courts broader discretion when referring to the principles of Sharia in cases where an applicable legislative provision is absent.
Where no statutory rule exists, either explicitly or implicitly, the judge may refer to the principles of Sharia and select the solution that best achieves justice and public interest in accordance with the circumstances of each case, without being bound by a specific school of jurisprudence or one single Sharia doctrine.
The law also provides for the application of Sharia principles in the absence of special legislation governing matters relating to persons of unknown parentage, missing persons, and absentees.
The comprehensive review of the law took into account practical challenges faced by the judiciary, while respecting the competencies of local authorities in regulating certain matters, issuing licenses, and supervising activities related to civil transactions and local regulations within their respective jurisdictions.
Proprietary rights
With respect to proprietary rights, the law reorganised the rules governing usufructuary construction rights, requiring registration of the contract with the competent authority and providing for nullity in the absence of registration. It also introduced provisions governing the obligations of the holder of such rights and allowed the parties to determine its duration.
The law also provides that financial assets located within the UAE belonging to a foreigner with no heirs shall be designated as a charitable endowment, subject to supervision by the competent authority to ensure proper management and allocation.
In addition, the new legislation introduced a new framework governing assignment, including the assignment of rights, and established provisions for the protection of possession through preventive actions aimed at halting new acts of encroachment before harm occurs.
The law adopts clearer legal concepts aligned with contemporary transactional realities, reinforcing individual legal capacity and protecting free will in legal acts and contracts. This approach balances empowering individuals to manage their legal and financial affairs with safeguarding them against exploitation or harm.
The law also introduces provisions addressing persons requiring assistance due to incapacity to express their will, empowering courts to appoint a judicial assistant to support such individuals in acts serving their best interests.
The new Decree Law establishes an advanced framework governing pre-contractual negotiations, imposing an obligation to disclose any fundamental information to ensure informed and conscious contractual decision-making. This enhances trust between parties and reduces disputes before they arise.
It 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 ensuring consistent legal reference for subsequent contracts.
Contractual capacity
Regarding contractual capacity, financial acts of a discerning minor involving both benefit and detriment are deemed voidable in the minor’s interest rather than suspended, granting the guardian the right to seek annulment within one year from knowledge, and allowing the minor to seek annulment within one year after reaching majority.
The Law updates provisions governing sale contracts, including clearer regulation of sale by sample and by model, protection of persons lacking full capacity in cases of gross inadequacy in real estate sales, and enhanced rules governing latent defects.
Buyers are granted the option to reject the goods, accept them with price reduction, or allow the seller to provide 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.
Disputed rights
The law introduces detailed rules governing the sale of disputed rights, prohibiting acquisition by judges, prosecutors, court officials, and attorneys involved in the dispute, under penalty of nullity, to safeguard judicial integrity.
Corporate provisions were modernised to align the 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, continuation of companies, and liquidation procedures and enhances corporate stability.
A dedicated legal framework for nonprofit companies was introduced, requiring reinvestment of profits into the company’s objectives, thereby supporting sustainable development.
It also establishes a modern regime for professional companies, regulates ownership, naming, liability, and introduces independent regulation of “mudaraba contracts” outside the scope of company law.
Provisions governing contracts of works were updated to clarify responsibilities, regulate termination, address unforeseen circumstances affecting contractual equilibrium, and empower courts to restore balance through adjustment or termination.
Insurance provisions were refined, including a comprehensive framework for takaful insurance. Rules governing guarantees were reorganised to protect guarantors and ensure equitable enforcement.
