Does my UAE contract renew automatically, and can the other side change the terms?
Many UAE contracts carry an automatic renewal, a change-of-terms right, or both. Whether the renewal binds you, and whether the other side can alter the terms on renewal, turns on a few short articles.
Leases in Dubai roll over on the same terms
Article 6 of the Dubai Tenancy Law says that when a lease expires and the tenant stays in the property without objection from the landlord, the lease renews for the same term or for one year, whichever is shorter, on the same terms as before. A renewal clause that changes the rent or the term on rollover goes beyond what this article provides.
No change without consent
Article 232 of the Civil Transactions Law is the general rule: once a contract is valid and binding, neither party may revoke, modify or rescind it except by mutual consent, litigation or a provision of law. A clause that lets one party amend prices, fees or conditions at will, or on notice alone, gives that party a right the article does not.
Article 128 adds that silence is not acceptance unless an agreement or an indication says so, or there was prior dealing between the parties to which the offer relates, or the offer is purely for the offeree's benefit. So a renewal that is said to take effect because the other party did not reply is only an agreement if the contract itself says silence counts, which is the clause to look for.
Reading the clause
Article 120 sets the rules of interpretation. Doubt is read in favour of the debtor, ambiguous terms in a contract of adhesion are not read against the adhering party, and no implication prevails over an express statement. A renewal or amendment clause that is vague therefore does not get the benefit of the doubt in the drafter's favour.
Questions
- What happens when a Dubai lease ends and I stay on?
- Under Article 6 of the Dubai Tenancy Law the lease renews for the same term or one year, whichever is shorter, on the same terms.
- Can the other party change the price during the contract?
- Article 232 allows modification only by mutual consent, litigation or a provision of law; a unilateral right has to be written into the contract and is read against the drafter where ambiguous.
- Is my silence an acceptance of a renewal offer?
- Not by default. Article 128 treats silence as acceptance only where an agreement or indication says so, where there is prior dealing to which the offer relates, or where the offer is purely for the offeree's benefit.
Articles on this page
- Article 6Dubai Tenancy LawCited in Fahm reportsThis article covers what happens when a lease term ends but the tenant stays in the property and the landlord does not object.
- Article 232Civil Transactions LawCited in Fahm reportsWhen a contract is valid and binding, neither party can take back their commitment, change the terms, or cancel the contract on their own.
- Article 128Civil Transactions LawCited in Fahm reportsThis article covers silence in response to an offer.
- Article 120Civil Transactions LawCited in Fahm reportsThis article lists thirteen rules for reading a contract.