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Lawsuits & Litigation

Important Considerations Before Filing a Claim for Breach of Contract in UAE

— July 16, 2020

The attorney you hire has to be willing to provide advice regarding the filing of a complaint for breach of contract and preparing the case. 

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

People sitting around a table with laptop and cell phone having a meeting; image by Headway, via
People sitting around a table with laptop and cell phone having a meeting; image by Headway, via

A lot of contracts today include arbitration and mediation clauses. It is, therefore, necessary for parties to check if their contract(s) include such cases prior to filing a suit. Parties must submit first to arbitration or mediation in order to assess if it’s possible for the matter to be resolved without having to take it to court. The clauses that are included in agreements provide concerned parties with fair opportunities in resolving matters of dispute in good faith prior to seeking any legal recourse. 

Fortunately for most businesses and individuals in the UAE, a matter may be resolved without any extra recourse being required. If you’re participating in an arbitration or mediation prior to filing a suit for breach of contract, then it is necessary to consider the damage that resulted from the potential breach of contract and the cost in taking another party to court in the event that a solution isn’t found. There are individuals who consult expert attorneys before engaging in the process of arbitration or mediation in order for them to be advised on a resolution that might be uncovered instead of taking disputes to court. There are cases wherein the matter won’t be pursued in court because coming to a resolution outside courts proves to be best financially for all parties involved. There are times wherein parties are aware of this, which is why they’re comfortable enough in violating the agreement. 

Prepare complaint and necessary documents 

Whichever route you take for settling the matter of dispute, you would want to prepare the complaint for filing. Also, it is necessary to gather all documents that you may have which can prove to be sufficient in providing evidence of the violation. This can include copies of the signed agreement as well as other information that is relevant to the case. You would want to have a seasoned lawyer in UAE if your case is substantial and there is financial sense to hiring one. The attorney you hire has to be willing to provide advice regarding the filing of a complaint for breach of contract and preparing the case. 

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