Civil Transactions Law · Federal Decree-Law 25 of 2025
Article 233
Section One: Sources of Obligation > Chapter One: The Contract > Part Six: Dissolution of the Contract
English translation
1. The contracting parties may mutually agree to rescind the contract after its conclusion.
2. Mutual rescission (Iqala) shall be subject to the general conditions of a contract.
3. Mutual rescission may be effected in respect of part of the subject matter of the contract in exchange for its corresponding consideration.
4. For the validity of mutual rescission of the entire subject matter of the contract, it shall be possible for the contracting parties to return to the state they were in before the contract.
5. As between the contracting parties, mutual recission shall have the effect of rescission; however, with respect to third parties, it shall constitute a new contract.
Official translation, as published by the portal.
Official Arabic text
.1 للمتعاقدين أن يتقايلا العقد برضاهما بعد انعقاده.
.2 تخضع الإقالة للشروط العامة للعقد.
.3 تجوز الإقالة في بعض المعقود عليه بما يقابله من عوض.
.4 يُشترط لةحة الإقالة في كل المعقود عليه، إمكان عودة المتعاقدين إلى الحالة التي كانا عليها قبل التعاقد.
.5 الإقالة في حق المتعاقدين فسخ، وفي حق الغير عقد جديد.
What it means when you sign
After a contract has been made, the parties can agree to cancel it by mutual consent, known as iqala. Mutual cancellation is subject to the same general conditions as any contract. It may cover only part of what the contract deals with, in exchange for the matching share of the consideration. If it covers the whole subject matter, it is valid only if the parties can return to the position they were in before the contract. Between the two parties it works as a cancellation, but towards third parties it counts as a new contract.
For a contract about to be signed, this article is relevant to clauses on exit by agreement, partial cancellation, or winding down a deal. It means a mutual cancellation is itself an agreement with conditions, and that a full cancellation depends on the parties being able to restore the earlier position, which may be hard if goods have been used or work already done. It also means people outside the contract may treat the cancellation as a new contract.
Not yet cited in a Fahm report; shown because it sits in the same chapter as one that is.
Related articles
- Article 232Cited 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 234Cited in Fahm reportsIn contracts where both sides owe duties, if one party does not perform on the due date, the other party may, after formally notifying the debtor, ask the court to order performance of the contract or to cancel it.
- Article 235The parties may agree that the contract will be treated as cancelled automatically, without a court judgment, if the obligations arising from it are not performed.
- Article 18This article says which country's law governs property.
- Article 19Cited in Fahm reportsThis article says which country's law governs a contract's obligations, both its form and its substance.
- Article 20This article says which country's law governs obligations that do not come from a contract, such as those arising from an act that causes harm.