Important Considerations Before Filing a Claim for Breach of Contract in UAE
Important Considerations Before Filing a Claim for Breach of Contract in UAE
Claims for breach of contract have become more common due to the present circumstances brought forth by the COVID-19 pandemic. There's a lot of reasons why a lawsuit for breach of contract may be deemed necessary. There are times wherein businesses or individuals fail in delivering products or services agreed and paid for, but refuse to give refunds to service/product purchasers. There are also times wherein businesses or individuals cost a company heavily from negligence of delivering what was in the contract and refuse to reimburse the affected party for losses. There's a lot of reasons as to why a claim for a breach of contract is submitted. However, if you feel it is necessary in your particular situation, it is absolutely critical to be fully prepared prior to going through the entire legal process. Statute of limitations Generally, a claim for breach of contract in UAE is considered immediately. However, there are those who sit on it as they are not able to hire proper legal representation or they’re not made aware of the occurrence of breach of contract when it actually happened. Although the statutes differ depending on the jurisdiction in the UAE, a timeframe of two-four years is given with some special circumstances being even shorter. It is necessary to consider regulations on the emirate that you are in prior to submitting a claim in UAE for breach of contract. It is also best to hire an attorney and get expert legal counsel. Material and damage from breach of contract The local legislation requires any breach of contract to be material. It should result in damages prior to a person or entity suing for it in order to obtain some financial support or recovery. To give an example, it a project has been completed a couple of days following the completion date that was agreed, a party may only file a claim if there was significant loss that occurred due to that delay. When the business has structural work to be done and the work has been implemented following the date that was agreed, for instance, then the party may be sued for damages and will be liable if the business was kept closed and suffered losses. Damages have to be in monetary form and the money can be not earned or lost because of the potential breach of contract. Guidelines given by local regulations vary in relation to what’s considered as material. There is a need to consider it in order to assess if a loss can be considered as significant. Arbitration and mediation
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About Mohamed Ali, CPA, CFE, CICA
A senior partner in HHS Lawyers with over 30 years of experience, Mohamed Ali applies his extensive knowledge of property and real estate law in UAE to help clients tackle property rights and real estate issues. His professional expertise on various legal matters pertaining to real estate and buying/selling transactions help the law firm in providing its clients with expert, quality advice on different areas, such as leasing, construction and development contracts, licensing, real estate financing, exchanges, and real estate sales.