Breach of Contract in the UAE - A guide to know the period for an unlimited contract

An unlimited contract contains a commencement date but no end date. They are considered more adaptable and user-friendly than limited-term contracts. For this reason, it is widely used for employment, sale, and purchase of real estate, commercial transactions, construction, lease, and more. The contract binds the parties to perform contractual obligations, but any failure to adhere to these commitments is considered as Breach of Contract. The laws and regulations developed for Breach of Contract UAE are critical and straightforward.
With the ongoing economic developments in the UAE, many disputes have stemmed out of contracts. To claim losses incurred under a breach of contract in the UAE, you should know about the lawful limitation periods. These limitation periods are intended as a general guide only and discussed in detail as follows.

Limitation period
A limitation period is when a party has to file a claim or take any legal action. However, the specific limitations of time in the UAE are different from many other countries. It isn't expressed in one comprehensive statute but is found in multiple statutes. In the UAE, the length of the limitation period differs according to the cause of action. As per the Federal Law No. 5 of 1985 related to civil transactions (“Civil Code”), a claim is time-barred after 15 years, unless a specific statute state otherwise.

Time-barred
If the claim is not petitioned within the period stipulated under the applicable statute, then there is a risk that the claim gets "time-barred." As a consequence of a time-barred claim, your request will get dismissed by the relevant court having jurisdiction over the matter. Regardless of how strongly you claimed, you will then lose the right to pursue any claim. Hence, you should know the limitation period applicable to your claim. 

Termination of contract
The concept of breach of contract is intense, and it is conceivable to terminate the contract when the breach is beyond repair. An unlimited contract can also be terminated for specific reasons mentioned under the UAE Labour Law. As per laws, termination of the contract is possible with mutual consent of both the parties by giving a notice of 30 days.  In some cases, the necessary notice period time is mentioned in their employment agreement.

Breach of Contract in UAE is one of the most common issues under the Contract Law and needs practical solutions for the suffering party. UAE law also acknowledges the concepts of direct damages, loss of profits, loss of opportunity, consequential damages, interests, etc. Furthermore, it recognizes the limitation of liability clauses as well as penalty clauses.

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