On 1 June 2026, Federal Decree-Law No. 25 of 2025, the new Civil Transactions Law, came into force and repealed the 1985 Civil Code that had governed UAE construction contracts for four decades. In the same season, the Dubai Chamber of Commerce launched the Dubai Contractors Business Group to represent a sector that suddenly has a great deal to talk about: a new federal code, Dubai's new contractor registration regime under Law No. 7 of 2025, and Dubai's building quality and safety law. The legal commentary has been thorough. What has had less attention is the operational consequence, which is where most contractors will actually win or lose under the new framework.
The short version: the new code attaches consequences to silence and rewards contemporaneous records. A contractor's protection now depends less on what happened on site and more on what was noticed, notified and evidenced at the time. That is an operations problem wearing legal consequences, and it will be solved or fumbled on site, in the daily routine of who notices what and writes it down, long before any lawyer is instructed.
The clause most likely to catch contractors out
Article 816 deals with employer-supplied materials, and most of it is unremarkable: preserve them, use them to technical standard, notify the employer immediately if defects appear in them. The sting is in Article 816(3), which as legal commentators including Mayer Brown have flagged, goes much further: if other factors arise that would impede proper execution of the works, the contractor must immediately notify the employer, and a contractor that stays silent bears the resulting consequences. The 1985 code contained no equivalent duty.
Two things make that operationally demanding. First, "other factors" is a catch-all: access problems, design queries, third-party interference, conditions on site. The provision applies where the contract does not say otherwise, and while most sophisticated contracts do contain notice regimes, the statutory default now sets the tone for how silence will be read. Second, "immediately" is not a 28-day window. Contractors working under FIDIC forms already know how strictly notice periods can bite - the DIFC courts have treated the 28-day claim notice as a condition precedent - and the new code extends that culture of prompt, evidenced notification into the statutory baseline.
The employer's side sharpened too. Under the old code's Article 877, an employer generally needed the court's permission to terminate for defective work or bring in another contractor at the original contractor's expense. Article 818 of the new code removes that trip to court: notice, a reasonable cure period, established facts, and the employer may rescind or reassign the work. The practical effect is that a notice-and-cure letter now carries immediate commercial weight, and the contractor's response - and its record of that response - matters from day one.
What changed, side by side
| Area | 1985 Civil Code | 2026 Civil Transactions Law |
|---|---|---|
| Contractor notice duty | No express statutory duty | Immediate notice of employer-material defects and any factor impeding execution; silence carries the consequences (Art 816(3)) |
| Defective work remedy | Employer applied to court (Art 877) | Notice and cure period, then rescission or reassignment at the contractor's expense, no court needed (Art 818) |
| Latent defects | Six-month default limitation | One-year default, and periods already running on 1 June 2026 can be recalculated under the new rule |
| Decennial liability | Ten years, Arts 880-883 | Maintained at ten years, Arts 821-824, with subcontractor recourse clarified as outside the statutory warranty |
| Dubai overlay | - | Contractor registration under Law 7 of 2025 (including free zones and DIFC) and the building quality and safety regime, with ten-year document retention |
The registration overlay deserves a sentence of its own: Dubai Law No. 7 of 2025 took effect in January 2026 and reaches contracting activity across the emirate, including the free zones and the DIFC, with existing contractors given until January 2027 to comply. Combined with the quality and safety regime's documentation expectations, the direction of travel is unambiguous - a regulated sector with a long institutional memory.
None of this is exotic to anyone who has administered a FIDIC contract properly. What is new is that the discipline is no longer just contractual best practice for the firms that have it; it is the statutory environment for everyone, including the mid-market contractor, the fit-out firm and the subcontractor whose contract administration currently consists of a site WhatsApp group and a foreman's memory.
The operational gap
Here is the uncomfortable arithmetic. A duty to notify "immediately" is only dischargeable by an operation that notices immediately. A one-year latent defect window is only survivable with handover records that still answer questions a year later. A notice-and-cure letter is only answerable with evidence of what was done and when. And Dubai's ten-year document retention expectation assumes records exist in a form that survives staff turnover, phone changes and project close-out.
Measured against that, the typical mid-market contractor's records are in trouble before any dispute starts: issues raised verbally or in chat, photos on personal phones, variations agreed in a meeting and papered later or never, notices drafted when a dispute is already live rather than when the event happened. The legal commentators' advice - daily records, written notices with acknowledged delivery, preserved communications - is all correct, and it is all describing a system, not a stack of good intentions.
A notice register with clocks
Every notifiable event logged when it happens, the notice issued from a template, its delivery and acknowledgement recorded, and contractual and statutory clocks tracked against it.
An issue and defect log with evidence
Site issues, employer-material defects and impediments captured with photos, timestamps, location and the person recording, from a site app rather than a personal camera roll.
A variation record that matches reality
Instructions and variations logged as they are given, linked to who gave them, what changed and the cost and time consequence claimed, instead of reconstructed at final account.
A handover and retention pack
Completion, snagging and handover evidence assembled per project and retained to the ten-year horizon, so a latent defect allegation in year one, or year nine, meets a record rather than a shrug.
Under the new code, the contractor with the better site record has a structural advantage over the contractor with the better memory. That was always somewhat true. From 1 June 2026 it is closer to the whole game.
Where we sit in this, stated plainly
We build software. We are not a law firm, a claims consultancy, an arbitration practice or an engineer, and nothing on this page is legal advice or an interpretation of how the new code will be applied - that is work for construction lawyers, and the commentary we reference is theirs. What we build is the operational record layer: the system that captures issues, notices, variations and handover evidence as they happen, routes them to the right people, timestamps everything and keeps it retrievable for the decade the Dubai regime now contemplates. Whether a notice was contractually sufficient is your lawyer's question; whether it exists, was sent on time and can be found is the system's.
The honest scope note: a contractor running one or two small projects with a diligent contracts manager can hold this discipline manually. The case for a fitted system starts where projects, subcontractors and staff multiply - multiple live sites, dozens of notifiable events a month, and a workforce that changes faster than its knowledge can be handed over. Enterprise construction suites cover some of this ground for the firms that can carry them; the gap we see is the fitted, lightweight evidence register for the mid-market contractor who has the obligations without the enterprise tooling.
The questions contractors are asking
Article 816(3) applies where the contract does not provide otherwise, and most substantial contracts do contain notice regimes. But the statutory default shapes how silence and delay are read everywhere, the employer's Article 818 remedies apply regardless, and the practical bar for what a well-run contractor's records look like has moved. Whether your specific contracts displace the default is a question for your lawyers; whether your operation could meet an "immediately" standard is a question for your systems.
The commentary flags this as one of the sharper transitional points: limitation periods are an exception to the new law's general non-retroactivity, so periods that began before 1 June 2026 can fall to be recalculated under the new rule, and some that were about to expire may effectively be extended. What that means for a given project is precisely the kind of question to put to counsel - with the handover records in front of them, which is rather the point.
No. We are an independent software engineering company. We do not advise on claims, draft or assess notices for legal sufficiency, appear in disputes or interpret the code. We design and build the evidence and notice-workflow platform, hand it over, and your team operates it. Legal judgement stays with your lawyers and claims advisers; our job is to make sure that when they need the record, it exists.
Document control and QA/QC inspection systems are adjacent and stay in place; we have written separately about both. The gap this piece describes is the notice-and-evidence workflow that sits across them: the register of notifiable events with clocks, the link from site issue to formal notice to acknowledgement, and the retention horizon. A build typically integrates with what you run rather than replacing it, and the integration scope is what a discovery phase establishes.
The Dubai Contractors Business Group exists because the sector's operating environment is being rewritten in real time: a new federal code, a registration regime that reaches into the free zones, a safety law with a ten-year memory. Contractors will spend the next year updating contract templates with their lawyers, as they should. The ones who also update how their sites capture and keep evidence will find the new environment considerably more comfortable than the ones who only changed the paperwork. For adjacent ground, see our pages on construction document management and QA/QC inspection software, and our sources page for the legal commentary behind this piece.
We build software; we are not a law firm, claims consultancy or arbitration practice, and nothing on this page is legal advice. Descriptions of Federal Decree-Law 25 of 2025, Dubai Law 7 of 2025 and related measures summarise published legal commentary at the time of writing, are point-in-time, and may be affected by subsequent guidance or amendment. References to authorities, laws and firms are descriptive and imply no affiliation or endorsement. Seek qualified legal advice on how the new framework applies to your contracts. Sources are listed on our sources and data page.
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