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Types of Agreements in the UAE

 

Understanding the different types of legal contracts and agreements is crucial for anyone engaged in business within the United Arab Emirates (UAE). Each type of agreement serves distinct purposes and is governed by specific regulations and legal frameworks that are unique to the UAE.

At 24Justice, we connect you with legal experts who specialize in UAE law to ensure your agreements are not only compliant but also optimized for your business needs.

10 Common Types of Agreements in Dubai

 

  1. Commercial Contracts: These are agreements between businesses for the provision of goods or services. They must adhere to the UAE Commercial Transactions Law and often include terms regarding delivery, payment, penalties, and dispute resolution.
  2. Employment Agreements: Governed by the UAE Labor Law, these contracts outline terms of employment, employee rights, duties, and end-of-service benefits. They must be registered with the Ministry of Human Resources and Emiratization to ensure compliance.
  3. Lease Agreements: For real estate rentals, lease agreements must comply with the Real Estate Law in the UAE and are overseen by local authorities such as the Dubai Land Department. These agreements specify terms about rent, maintenance, duration, and renewal.
  4. Joint Venture Agreements: These are used when two parties agree to combine resources for a particular project or business venture. Our experience suggests that they are particularly common in the UAE’s free zones, and must clearly outline the roles, responsibilities, profits, and losses distribution among the partners.
  5. Sale and Purchase Agreements (SPA): Used in both personal property and real estate transactions, SPAs are critical and must include comprehensive details about the assets being bought or sold, warranties, and the terms of the sale.
  6. Service Agreements: These outline the framework for the provision of services, detailing the scope of work, timelines, payment terms, and confidentiality clauses. They are essential for businesses that provide professional services like consulting, marketing, or IT support.
  7. Debt Restructuring Agreements: In a Debt Restructuring Agreement, a struggling borrower negotiates with lenders to make their debt more manageable. The agreement typically modifies the original repayment terms, such as lowering interest rates or extending the repayment schedule. Creditors may also agree to a reassessment of the collateral pledged against the debt, potentially reducing the borrower’s burden further. This process helps the borrower get back on track financially while still allowing lenders to recoup their investment over time.
  8. Limited Liability Agreement: A Limited Liability Agreement (LLA) is a legal document that outlines how much personal liability protection members have for the company’s debts and actions, defines the allowed business activities that impact liability, and details how much capital each member contributes and how these contributions affect their share of profits and potential liability.
  9. Web3 and Blockchain Agreements: Web 3 agreements leverage blockchain technology to manage digital assets and decentralized organizations. They encompass tokenization contracts outlining ownership and transfer of tokenized assets, smart contract provisions that automate agreement execution based on coded terms, and DAO participation rules governing voting rights, membership, and profit sharing within these digital collectives.
  10. Franchise Agreements: Franchise Agreements establish a business model where a franchisor grants a franchisee the right to operate under their brand, outlining key aspects like maintaining brand standards and operational compliance, defining royalty structures (percentage of revenue or fixed fees) paid by the franchisee, and clearly dividing marketing and advertising responsibilities between both parties for local and national reach.

 

UAE-Specific Considerations for Agreements

 

  • Bilingual Contracts: In the UAE, it is advisable to draft contracts in both Arabic and English. Arabic is the official language, and in the case of legal disputes, the Arabic version of a contract will take precedence.
  • Islamic Law Influence: The principles of Sharia law influence the legal framework within the UAE, and contracts should respect these principles to avoid being voided.
  • Notarization and Registration: Certain agreements, such as property leases and some commercial contracts, may need to be notarized and registered with specific government bodies to be enforceable.

Common types of Agreements in Dubai

 

Below are just some of the kinds of agreements our Corporate Lawyers in Dubai have experience dealing with. This is not an exhaustive and complete list, but an idea of routine agreements and contracts:-

  1. General Business Agreements
    • Investment Agreements: Facilitate financial investments in businesses, detailing terms, obligations, and returns expected.
    • Joint Venture Agreements: Establish the terms of partnership between entities collaborating on specific business projects.
    • Partnership Contracts: Outline the operational structure, financial commitments, and responsibilities of each partner.
    • Merger & Acquisition Agreements: Govern the process of one company merging with another or acquiring another business.
    • Shareholders Agreements: Define the rights, responsibilities, and protections of shareholders within a company.
    • Agency Agreements: Specify the relationship between a principal and an agent, delineating the agent’s authority to act on behalf of the principal.
    • Management Agreements: Cover the operational control of a business or property, specifying roles, responsibilities, and compensation.
    • Administrative Services Agreement: Detail the services provided by one entity to another under administrative functions.

    Specialized Industry Agreements

    • Construction Agreements: Involve terms for construction projects including scope, budget, timelines, and standards.
    • Shipping Agreements: Outline terms for the transportation of goods, including costs, delivery dates, and liability issues.
    • Maritime Agreements: Cover the specifics of maritime operations, including vessel employment, chartering, and compliance with maritime laws.
    • Sports Agreements: Include contracts for athletes, endorsements, sports marketing, and event organization.
    • Event Management Agreements: Detail the responsibilities of parties organizing events, covering scope, services, and logistical arrangements.
    • Influencer Management Agreement: Define the relationship between influencers and brands or agencies, including terms for promotion and compensation.

    Operational and HR Documents

    • Employment Contracts: Specify terms of employment, duties, rights, and responsibilities of the employer and employee.
    • Disciplinary Policies: Outline procedures for addressing employee misconduct and the steps for disciplinary action.
    • Handbooks, Policies, and Procedures: Provide detailed guidance on company policies, employee expectations, and workplace procedures.

    Real Estate and Property Agreements

    • Real Estate Rights Contracts: Specify rights and obligations related to the ownership or use of real estate.
    • Tenancy Contracts: Govern rental agreements between landlords and tenants, detailing terms about lease duration, payments, and maintenance.
    • Concession Agreements: Grant rights to use a particular area of land or property for commercial purposes, typically in a public or government-owned space.

    Intellectual Property and Licensing

    • Trademark Assignment Agreements: Govern the transfer of ownership of a trademark from one party to another.
    • License Agreement Non-exclusive License of Manufacturer: Permit manufacturers to produce and sell goods under the licensor’s patent or trademark without exclusivity.
    • Drafting License Agreement: Involve the creation of agreements that allow one party to use another’s intellectual property under specified conditions.

    Financial and Investment Documents

    • Loan Contracts: Specify the terms of a loan between a borrower and lender, detailing the repayment schedule, interest rate, and collateral, if applicable.
    • Insurance Instruments: Legal documents representing the terms and conditions of an insurance policy.
    • Debt Restructuring Agreement:

    Legal Notices and Procedural Documents

    • Legal Opinions: Provide assessments or explanations of the law as it pertains to a specific situation.
    • Complaints and Summons: Formal documents that initiate legal action and require the defendant to respond to the charges.
    • Notice of Cancellation of Contractor: Formal termination of a contract with a contractor.
    • Expiration of Service Contract: Notify parties involved regarding the end of a service agreement.

    Personal Legal Documents

    • Wills and Trust Agreements: Legal documents specifying how an individual’s assets will be distributed after death.
    • Power of Attorney: Grants one person the authority to act on behalf of another in legal or financial matters.
    • Affidavits Drafting: Involve creating sworn statements of fact that are legally binding.

    Corporate Structuring Documents

    • Memorandum of Association: A legal statement signed by all initial shareholders agreeing to form the company.
    • Article of Association: Details the regulations for a company’s operations, outlining the company’s purpose and the responsibilities of its directors.
    • Drafting Structuring Agreements: Create documents that outline the legal and financial structure of a corporation.

    Miscellaneous Agreements and Legal Services

    • Settlement Agreements: Contracts that resolve disputes between parties without admission of guilt or liability.
    • Non-Disclosure Agreements: Prevent the sharing of confidential information.
    • Drafting Terms & Conditions of Businesses: Create terms governing the use of a business’s services or products.
    • Drafting Correspondence & Legal Notices: Prepare formal communications on legal matters.
    • Proofreading of Legal Documents: Ensure legal documents are free of errors, consistent, and complete.

Why choose a professional from 24Justice?

 

At 24Justice, the Corporate Lawyers in Dubai on our portal understand the nuances of UAE contract law and ensure that you are connected with attorneys who specialize in the specific type of agreement you need. Whether you are entering into a commercial contract, drafting a lease agreement, or setting up a joint venture, our experts ensure your contracts are legally sound and tailored to your needs.

 

Connect with a Legal Expert Through 24Justice Navigating the complexities of UAE agreements requires expert advice. Contact us at 24Justice to connect with a legal expert who can assist you in drafting, reviewing, and negotiating your agreements to ensure they meet all legal requirements and align with your business objectives.

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