Pre-contract Negotiations in the UAE: When Can Liability Arise?

Negotiations do not by themselves mean that a contract has been concluded. The new Civil Transactions Law regulates disclosure of material information during negotiations. Ending discussions alone does not establish a right to compensation.

Identify the particular conduct complained of, the stage reached in discussions, any assurances given and whether one party asked the other to incur expense. Separate voluntary preparation costs from losses allegedly caused by the other party. Preserve dated correspondence, draft terms, meeting notes and an itemised expense record.

For example, expenditure on a technical report during discussions does not automatically make the other party liable when negotiations end. The representations, reason for withdrawal, proven damage and causal connection must be assessed.

Federal Decree-Law No. 25 of 2025 entered into force on 1 June 2026. Check the dates, applicable special legislation and temporal rules for the particular case.