Civil Transactions Law · Federal Decree-Law 25 of 2025
Article 339
Section Two: Effects of the Obligation > Chapter Two: Means of Performance > Part Three: Compulsory Performance
English translation
If the compensation is not determined in the law or in the contract, the court shall assess it in an amount equivalent to the damage actually sustained.
Official translation, as published by the portal.
Official Arabic text
إذا لم يكن التعويض مقدّرًا في القانون أو في العقد، قدّرته المحكمة بما يساوي الضرر الواقع فعلاً.
What it means when you sign
If the amount of compensation is not fixed by law or by the contract, the court assesses it at an amount equal to the damage actually suffered.
This article is a fallback rule. It applies when nobody has set the amount of compensation in advance, whether the law or the contract. In that case the measure is the damage that actually occurred, not an estimate of possible loss.
For a contract about to be signed, this article means the contract's own wording on compensation matters. A clause that fixes an amount of compensation, or a way of working it out, takes the place of this fallback measure in the sense that the article applies only when the amount is not already set. A contract that is silent on compensation, or that uses vague phrases such as reasonable damages or full loss, leaves the amount to be assessed on the basis of actual damage. Clauses on liability, damages and penalties are where this article matters most.
In Fahm reports this article usually sits under: Risky commercial terms
Related articles
- Article 338Before a creditor can treat a debtor as late, formal notice to the debtor is normally needed.
- Article 340Cited in Fahm reportsThis article deals with compensation that the parties agree in advance, in the contract or in a later agreement, subject to the provisions of the law.
- 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.
- Article 28This article deals with what happens once a foreign law has been found to apply.