Below is a detailed, exam-oriented explanation using the current UAE Civil Transactions Law, Federal Decree-Law No. 25 of 2025, which has applied from 1 June 2026 and replaced the 1985 Civil Transactions Law. The current law expressly identifies five sources of obligations in Article 112. (UAE Legislation)

CIVIL LAW AND UAE SOURCES OF CIVIL OBLIGATIONS – EXPANDED

1. Introduction

An obligation is a legal relationship under which one person, called the debtor, is legally bound to perform something for another person, called the creditor.

The obligation may require the debtor to:

pay money;

deliver property;

perform an agreed service;

refrain from doing something;

compensate another person for damage;

return money or property received without legal basis;

perform an obligation imposed directly by law.

The UAE Civil Transactions Law provides a systematic classification of the sources from which these obligations arise.

Under Article 112 of Federal Decree-Law No. 25 of 2025, obligations or personal rights arise from legal acts, legal facts and the law. The five statutory sources are:

Contract

Unilateral Act

Harmful Act (Tort)

Beneficial Act (Unjust Enrichment)

Law.

This is one of the most important provisions for understanding UAE civil law.

2. Basic Meaning of an Obligation

An obligation normally involves two sides:

Creditor

The person entitled to demand performance.

Debtor

The person legally required to perform.

Example

A sells a car to B.

A may be obliged to:

transfer the car; and

provide the agreed documents.

B may be obliged to:

pay the purchase price.

Therefore:

Legal source → obligation → creditor's right + debtor's duty

3. Article 112 – The Five Sources

The current Civil Transactions Law expressly provides:

The current statutory architecture places these sources at the beginning of Book One – Obligations. The current Book One covers Articles 99–444, with the sources of obligation forming the first major part.

4. Classification of Sources

The five sources can broadly be understood in two groups.

A. Voluntary or Legal Acts

These arise substantially from human legal action.

Examples:

contracts;

unilateral legal acts.

B. Legal Facts

These arise because the law attaches legal consequences to events or conduct.

Examples:

tort;

unjust enrichment;

certain obligations imposed directly by law.

This classification helps explain why a person can become legally bound even without signing a contract.

5. Source One – Contract

Meaning

A contract is the most familiar source of civil obligations.

Under Article 113 of the current Civil Transactions Law, a contract is formed through the binding concurrence of an offer and acceptance in a manner producing legal effect concerning its subject matter.

A contract therefore creates obligations because the parties have agreed to be legally bound.

Example

A agrees to sell goods to B for AED 100,000.

The contract can create obligations such as:

Seller → deliver goods

Buyer → pay AED 100,000

6. Essential Features of Contractual Obligations

A contractual obligation generally involves:

Agreement;

Legal capacity;

Required form where the law requires one;

Lawful subject matter;

Lawful purpose/cause;

Enforceability under the applicable law.

The new Civil Transactions Law also modernizes pre-contractual negotiations and disclosure. The UAE Government has explained that the new legislation introduces a framework for pre-contractual negotiations and disclosure of fundamental information.

7. Good Faith in Contractual Obligations

Contractual obligations are not always limited to the literal words written in a contract.

The current Code reinforces good faith in contractual performance. Current Article 221 provides that a contract must be performed according to its contents and consistently with good faith, while its effects can extend to requirements arising from law, custom and the nature of the obligation.

Therefore:

Contract = express terms + legally implied requirements + good faith

8. Case Law – Access Group DWC LLC v BLS International FZE

Access Group DWC LLC & Proex Partners Ltd v BLS International FZE [2023] DIFC CFI 091

The DIFC Court considered contractual interpretation and good-faith performance and referred to UAE Civil Code principles concerning interpretation and good faith.

The judgment noted that good-faith performance requires parties to carry out obligations honestly, avoid unfairly disadvantaging the counterparty and take steps necessary to permit contractual performance. It also referred to Dubai Court of Cassation Judgment No. 288 of 2025 concerning good faith.

Importance

It illustrates the broader UAE civil-law principle that contractual obligations must be understood within the legal and commercial context of the agreement.

Note: This is a DIFC decision and is not automatically binding on mainland UAE courts.

9. Case Law – DIFC Investments v Zia

DIFC Investments LLC v Mohammed Akbar Mohammed Zia [2017] DIFC CA 005

The dispute involved contracts for the sale and transfer of properties.

The court considered contractual obligations concerning payment and transfer and held that failure to make the required payment by the agreed deadline gave rise to contractual consequences, including termination under the contractual arrangement and applicable law.

Principle

Where parties expressly create a contractual obligation, the agreed terms can determine when and how the obligation becomes enforceable.

10. Contract as the Primary Source

Contractual obligations are particularly important because the parties themselves establish the economic relationship.

Examples include:

sale;

lease;

construction;

employment-related civil obligations;

agency;

loan;

insurance;

services;

supply;

franchise;

technology agreements.

However, contractual freedom is subject to mandatory legal rules.

11. Source Two – Unilateral Act

A unilateral act is a legally effective act by one person that can create an obligation or legal right without requiring the same bilateral structure as an ordinary contract.

The current Civil Transactions Law dedicates a separate section to the unilateral juridical act, following the contract provisions. The current Book One structure places this source after contract and before tort.

Examples can include:

a legally binding promise;

a public reward;

a unilateral undertaking;

an acknowledgment where the law gives it legal effect;

another legally recognized unilateral declaration.

12. Difference Between Contract and Unilateral Act

The important question is:

Did the obligation arise from agreement or from a legally effective unilateral act?

13. Example of Unilateral Obligation

Suppose A publicly announces:

"I will pay AED 50,000 to anyone who returns my lost property."

If the statutory requirements for the unilateral undertaking are satisfied and B performs the required act, the legal consequences can arise from A's unilateral declaration rather than from a negotiated bilateral contract.

Thus:

One person's legally recognized declaration → legal obligation

14. Why Unilateral Acts Matter

This source is important because not every obligation begins with:

Offer → Acceptance → Contract

Modern commercial life includes:

guarantees;

reward announcements;

unilateral commitments;

electronic declarations;

digital transactions;

public undertakings.

The new Civil Transactions Law expressly recognizes the unilateral act as an independent source of obligations.

15. Source Three – Harmful Act (Tort)

Tort is another major source of obligations.

The current Code uses the expression "harmful act" and provides a dedicated section governing tort.

The fundamental principle is that a person who causes legally compensable prejudice may be required to repair that prejudice.

The current Code's tort provisions are contained in Articles 245–318.

16. Basic Elements of Tort

A typical tort analysis involves:

1. Wrongful conduct

There must be conduct recognized by law as causing liability.

2. Damage

The claimant must suffer legally recognized prejudice.

3. Causation

The damage must be sufficiently connected with the defendant's conduct.

4. Legal responsibility

The relevant statutory rules must make the defendant responsible.

Formula:

Wrongful conduct + Damage + Causation + Legal responsibility = Tort liability

17. Direct and Causative Harm

The UAE civil-law tradition distinguishes between:

Direct perpetration

The person directly commits the harmful act.

Causation

The person causes the harm through another act or circumstance.

The current tort provisions retain this conceptual distinction while reorganizing the numbering under the 2025 Code.

18. Case Law – Federal Supreme Court, Civil Cassation No. 99/16

This authority is associated with the distinction between direct harm and causative harm under the former Civil Transactions Law.

Principle

The Court distinguished the legal consequences of direct perpetration from causative conduct.

Importance

It is useful for understanding the traditional UAE structure of tort liability.

Because the 2025 Code changed the article numbering, the case should be used for the continuing doctrinal principle, not as authority for the current article number.

19. Case Law – Dubai Court of Cassation, Civil Appeal No. 309/2016

This case concerned liability where multiple persons contributed to the same damage.

The Court explained principles concerning joint liability for compensation and the requirement that each person's fault contribute to the damage.

Importance

It demonstrates that tort liability may involve more than one responsible person.

The decision has also been cited in later UAE-law analysis concerning joint responsibility for damage.

20. Case Law – Dubai Court of Cassation, Civil Appeal No. 941/2019

This authority is relevant to the distinction between contractual and tortious liability.

Principle

The court must determine the true legal character of the claim rather than simply rely on the label chosen by a party.

The analysis can require consideration of:

the relationship between the parties;

breach;

fault;

damage;

causation.

Importance

This is particularly important when a claimant tries to characterize a contractual dispute as a tort claim.

21. Source Four – Beneficial Act / Unjust Enrichment

The fourth statutory source is the beneficial act, commonly explained as unjust enrichment.

The basic idea is:

A person should not retain a benefit obtained at another person's expense without a sufficient legal basis.

This is important because an obligation can arise even when:

there is no contract;

there is no deliberate tort;

one person has received a benefit;

retention of the benefit would be legally unjustified.

The current Code contains a dedicated section dealing with beneficial acts, including unjust enrichment, undue receipt and management of another's affairs.

22. Basic Elements of Unjust Enrichment

A simplified structure is:

One person receives a benefit;

Another person suffers corresponding impoverishment or detriment;

There is a connection between the benefit and detriment;

There is no sufficient legal basis for retaining the benefit;

The law provides a restitutionary remedy.

Formula:

Benefit + Corresponding loss + No legal cause → Unjust enrichment

23. Example of Unjust Enrichment

Suppose A accidentally transfers AED 100,000 to B's bank account.

There is no contract under which B is entitled to the money.

B keeps the money.

B has received:

Benefit = AED 100,000

A has suffered:

Corresponding loss = AED 100,000

If there is no legal basis for B retaining the money, restitution may be required.

The obligation therefore arises from unjust enrichment rather than contract.

24. Contract and Unjust Enrichment Must Be Distinguished

This is an important examination issue.

If a valid contract governs the parties' relationship, the contractual terms normally determine their rights and obligations.

Unjust enrichment is generally relevant where there is no sufficient contractual or other legal basis for the benefit.

25. Case Law – Sky News Arabia v Kassab Media

Sky News Arabia FZ-LLC v Kassab Media FZ (LLC) [2018] DIFC CFI 067

The DIFC Court expressly discussed the UAE Civil Code principle of unjust enrichment.

The court stated that where a contract governs the relationship between the parties, unjust enrichment generally does not provide the appropriate basis for a claim because the contract itself determines their rights and obligations.

Where there is no contract, an unjust-enrichment claim may arise if its requirements are satisfied.

Importance

This is a very useful case for distinguishing:

Contractual obligation

from

Restitutionary obligation.

Note: It is a DIFC decision applying/discussing UAE law and should not be treated as automatically binding on mainland courts.

26. Unjust Enrichment and Undue Payment

Unjust enrichment may arise from:

mistaken payment;

payment without legal basis;

receipt of another person's property;

invalidated transactions;

benefits obtained after a legal basis disappears;

unauthorized use of another's resources.

The remedy is generally focused on restoring the unjustified benefit rather than giving the claimant a windfall.

27. Management of Another's Affairs

The beneficial-act section also covers situations where one person manages another person's affairs without a prior contractual mandate.

Example:

A is absent from the UAE.

A's property is at immediate risk of serious damage.

B takes necessary steps to protect the property.

Depending on the statutory requirements, the law may create obligations concerning:

reasonable management;

reimbursement of necessary expenses;

accounting;

preservation of the owner's interests.

This is traditionally associated with negotiorum gestio or management of another's affairs.

28. Source Five – The Law

The fifth source is simply:

Law itself.

Not every obligation originates from an agreement or wrongful act.

Legislation can directly impose duties.

Examples can include:

family-related statutory obligations;

statutory duties concerning property;

obligations imposed on owners;

tax or regulatory obligations under special legislation;

statutory compensation;

duties imposed by company legislation;

obligations arising from labour legislation;

environmental obligations;

insurance obligations.

Thus:

Law → statutory duty → civil obligation

29. Why Law Is an Independent Source

Suppose legislation requires a person to perform a particular duty.

The person cannot argue:

"I never signed a contract."

The obligation exists because legislation itself created it.

This demonstrates why Article 112 expressly lists law as an independent source.

30. Relationship Between the Five Sources

The five sources may overlap in a single dispute.

For example:

Construction project

A contractor signs a contract.

Contract → contractual obligations

The contractor negligently damages a neighboring building.

Tort → obligation to compensate

The contractor receives an accidental payment.

Unjust enrichment → obligation to return it

The contractor separately makes a legally binding unilateral undertaking.

Unilateral act → additional obligation

A statute imposes a specific safety duty.

Law → statutory obligation

Therefore, one factual situation can involve several sources.

31. Contract vs Tort

This is one of the most important distinctions.

32. Contract vs Unjust Enrichment

The Sky News Arabia case is particularly useful for this distinction.

33. Tort vs Unjust Enrichment

These should also be distinguished.

Tort

Focus:

Harm caused by wrongful conduct

Unjust enrichment

Focus:

Benefit obtained without sufficient legal basis

A person may sometimes face both theories, but they are conceptually different.

34. Unilateral Act vs Contract

Contract

Requires agreement between parties.

Unilateral act

Can create legal consequences through a legally recognized act or declaration of one person.

Therefore:

Agreement-based obligation ≠ unilateral obligation

35. Legal Sources and Digital Transactions

The current Code's structure is broad enough to accommodate modern transactions.

For example:

Smart contract

Potentially:

Contract → obligation

Unauthorized digital transfer

Potentially:

Unjust enrichment → restitution

Cyberattack causing financial damage

Potentially:

Tort → compensation

Automated promise

Potentially:

Unilateral act → obligation

Statutory cybersecurity duty

Potentially:

Law → obligation

The technology does not itself determine the legal source.

36. New Civil Transactions Law and Modernization

Federal Decree-Law No. 25 of 2025 modernized the UAE's civil-law framework.

The UAE Government describes the legislation as a comprehensive modernization of the rules governing civil transactions, rights and obligations. It also introduced updated rules concerning:

pre-contractual negotiations;

disclosure;

framework agreements;

contractual balance;

unforeseen circumstances;

assignment;

professional companies;

insurance;

guarantees;

other modern transactional relationships.

The five-source structure, however, remains clearly stated in Article 112.

37. Pre-Contractual Conduct as a Modern Source of Obligations

An important development under the new Code is the treatment of negotiations.

Negotiations do not automatically create a final contract.

However, the new law creates express rules concerning good faith and disclosure during negotiations. Current Article 121 is reported as providing that negotiations themselves do not require the parties to conclude a contract, while bad-faith conduct can generate liability for actual damage caused.

Therefore:

No final contract ≠ always no legal responsibility.

Pre-contractual conduct may create a statutory/tort-like obligation under the new framework.

38. Case Law – Dubai Court of Cassation No. 267/2016

This earlier case concerned pre-contractual negotiations.

The court treated negotiations, by themselves, as not necessarily creating a contractual obligation to conclude the final contract.

However, liability could arise where withdrawal or conduct during negotiations involved fault, with the claim characterized as tortious rather than contractual under the former legal framework.

The case remains useful for understanding the distinction between:

negotiation → no automatic contract

and

fault during negotiation → possible civil liability.

39. Legal Cause and Obligation

Civil obligations should ordinarily have a legally recognized basis.

That basis may be:

agreement;

unilateral legal act;

harmful conduct;

unjust enrichment;

legislation.

Therefore, when analysing any civil claim, the first question should be:

What is the legal source of the obligation?

This question helps determine:

applicable rules;

burden of proof;

available remedies;

limitation issues;

damages;

restitution;

contractual interpretation.

40. Case Law – DIFC Investments v Dubai Islamic Bank

DIFC Investments Ltd v Dubai Islamic Bank [2022] DIFC CFI 024

The dispute concerned financial facilities and assignment of contractual rights.

The court examined the contractual source of rights and obligations and the effect of assignment provisions.

Importance

It illustrates that where parties' rights arise from a financing contract, the court begins with the contractual framework rather than treating the dispute as an independent restitutionary or tortious claim.

Again, this is a DIFC decision and should be identified as such.

41. Case Law – DIFC Investments v Zia and Contractual Termination

The DIFC Investments v Zia litigation also illustrates another important principle:

Where a contract expressly provides a consequence for non-performance, that contractual mechanism can itself become the source of the parties' rights.

The Court examined the contractual payment obligation and the agreed termination mechanism.

42. Case Law – Abu Dhabi/Dubai Judicial Approach to Good Faith

The current contractual framework builds on established UAE jurisprudence.

In Dubai Court of Cassation Judgment No. 288 of 2025, later discussed in Access Group v BLS, the principle of good faith was connected with contractual performance and the proper exercise of contractual rights.

This demonstrates that a source of obligation should not be viewed in isolation from the general principles governing its exercise.

43. Expanded Case-Law List

For examination purposes, the following authorities can be remembered:

The older cases above arose under the former 1985 Code. They remain useful for understanding continuity of UAE jurisprudence, but their former article numbers should not automatically be substituted for the current 2025 Code's numbering. The new Code has been effective since 1 June 2026.

44. Important Distinction Concerning DIFC Cases

DIFC cases are valuable comparative authorities, particularly because DIFC courts regularly deal with complex commercial disputes.

However:

A DIFC judgment is not automatically a binding precedent on a mainland UAE court.

The DIFC has its own legal framework and court system.

Therefore, in an examination answer, write:

"The DIFC authority is persuasive/illustrative and must be distinguished from binding mainland UAE legislation and jurisprudence."

This avoids incorrectly presenting DIFC common-law decisions as federal UAE precedents.

45. Remedies Depending on the Source

Contract

Possible remedies:

specific performance;

termination;

damages;

restitution;

agreed contractual remedies.

Tort

Possible remedies:

compensation;

restoration;

repair;

other measures appropriate to the harm.

Unjust Enrichment

Primary focus:

restitution;

restoration of unjust benefit.

Unilateral Act

Remedy:

enforcement of the legally effective undertaking where requirements are satisfied.

Law

Remedy:

enforcement of the statutory obligation;

statutory compensation;

other remedy prescribed by law.

46. Exam Problem – Identifying the Source

Facts

A buys equipment from B.

B refuses to deliver.

Source?

Contract

Facts

A negligently damages B's vehicle.

Source?

Tort

Facts

A accidentally transfers AED 50,000 to B.

Source?

Unjust enrichment

Facts

A publicly announces a lawful reward for finding lost property.

B performs the required act.

Source?

Unilateral act

Facts

A statutory provision requires an owner to perform a specified legal duty.

Source?

Law

47. Relationship Between Source and Proof

Different sources require different proof.

Contract

Prove:

contract;

terms;

performance/non-performance;

breach.

Tort

Prove:

wrongful conduct;

damage;

causation;

legal responsibility.

Unjust Enrichment

Prove:

benefit;

corresponding loss;

absence of legal basis.

Unilateral Act

Prove:

declaration;

legal effectiveness;

fulfillment of relevant conditions.

Law

Prove:

statutory provision;

facts bringing the person within its scope.

48. Simple Comparison Table

49. Five-Source Formula

For examinations, remember:

C-U-T-U-L

C – Contract

U – Unilateral Act

T – Tort

U – Unjust Enrichment

L – Law

Or:

Agreement → Promise → Harm → Benefit → Statute

50. Expanded Legal Formula

When a problem question is given, use this sequence:

STEP 1 – Identify the obligation

What does the claimant say the defendant must do?

STEP 2 – Identify the source

Is it:

Contract / Unilateral Act / Tort / Unjust Enrichment / Law?

STEP 3 – Identify the legal elements

Apply the rules governing that source.

STEP 4 – Examine evidence

What proves the obligation?

STEP 5 – Examine breach/non-performance

Has the defendant failed to comply?

STEP 6 – Examine damage or benefit

What loss occurred or what benefit was improperly retained?

STEP 7 – Apply remedy

Determine whether the appropriate result is:

Performance / Restitution / Compensation / Termination / Other statutory relief

51. Key Principles for Revision

Article 112 is the central provision on sources of obligations.

There are five statutory sources.

Contract creates obligations through agreement.

Unilateral acts can create legally enforceable obligations.

Tort creates obligations through harmful conduct.

Unjust enrichment creates restitutionary obligations where a benefit lacks sufficient legal basis.

Law can directly impose civil obligations.

One factual dispute can involve more than one source.

Contractual claims should normally be distinguished from tort claims.

Unjust enrichment should not normally displace an applicable contractual allocation of rights.

Good faith is important in contractual performance.

The current Code has modernized pre-contractual obligations and disclosure.

Older case law remains useful for continuity but must be read against the new 2025 Code.

DIFC decisions should be clearly distinguished from mainland UAE authorities.

52. Conclusion

The sources of civil obligations form the foundation of UAE civil law.

Under Article 112 of Federal Decree-Law No. 25 of 2025, the UAE expressly recognizes five sources:

Contract + Unilateral Act + Harmful Act (Tort) + Beneficial Act (Unjust Enrichment) + Law.

The importance of this classification is practical. Before deciding whether a person is liable, a court must understand why the obligation exists.

If it arises from an agreement, contractual principles apply.

If it arises from a harmful act, tort principles apply.

If someone has obtained an unjustified benefit, restitutionary principles may apply.

If one person's legally recognized declaration creates the obligation, unilateral-act rules may apply.

If legislation itself imposes the duty, the source is law.

The new 2025 Civil Transactions Law preserves this fundamental five-source structure while modernizing the surrounding rules on contracts, pre-contractual conduct, disclosure, hardship, assignment, professional relationships and other contemporary civil transactions.

One-Line Exam Answer

Under Article 112 of the UAE Civil Transactions Law, civil obligations arise from five principal sources: contract, unilateral act, harmful act (tort), beneficial act (unjust enrichment), and law. The source determines the applicable legal rules, elements of liability, proof and available remedies.

Final Revision Formula

SOURCE → ELEMENTS → PROOF → BREACH/LOSS → REMEDY

CONTRACT → AGREEMENT → PERFORMANCE

UNILATERAL ACT → LEGAL DECLARATION → ENFORCEMENT

TORT → HARM → COMPENSATION

UNJUST ENRICHMENT → BENEFIT WITHOUT SUFFICIENT CAUSE → RESTITUTION

LAW → STATUTORY DUTY → LEGAL ENFORCEMENT