Capacity to Contract According to the UAE Civil Transactions Law

Amanah Al-Shami

Legal Researcher at Zayed Al-Shamsi Law Firm and Legal Consultations 

Capacity to contract is not merely a matter of age and ability, but also of awareness and responsibility, forming a fundamental basis for the validity of a contract. Legal capacity is not limited to reaching the age of majority and having full mental faculties, but also encompasses a person’s ability to bear the consequences of their will and the obligations arising from their choices. Accordingly, the UAE legislator has given meticulous attention to the concept of legal capacity, making it a cornerstone of all legal acts, particularly in the realm of contracts. Not everyone who can speak is capable of undertaking obligations, and not every expression of will is legally recognized.

Therefore, the legislator stipulated that a person must possess legal capacity, and considered that the age of majority is not deemed complete unless the individual has reached 21 lunar years. At this point, the person is regarded as having full legal capacity. However, this is not merely a matter of time; it also requires sound mind and legal freedom that is not restricted.

The legislator further considered that a discerning minor, who has exceeded the age of seven and possesses relative understanding, has acts that are subject to the approval of the guardian—within the limits of what the minor may lawfully dispose of—or may be ratified by the minor after reaching the age of majority. In line with the legislator’s commitment to a gradual conferral of capacity to minors in a way that considers their mental development, the Civil Transactions Law introduced the principle of gradual empowerment of the minor in managing their finances. It allowed the guardian, when the minor reaches the age of eighteen, to hand over all or part of the minor’s property to them for self-management, provided the guardian is satisfied with the minor’s level of maturity.

Thus, it is evident that the legislator granted special protection to minors and the vulnerable—even from themselves—by affirming that a non-discerning minor has no right to dispose of their property under any circumstances, and all their legal acts are deemed void. Since a person’s will is not judged solely at the moment of expression, but rather within its mental and temporal context, in the world of contracting, not every signature is legally recognized, nor is every consent valid under the law. Therefore, the intervention of the law is not as an authority, but rather as a trustworthy guardian of a person’s mind, property, and dignity.

Some individuals are born legally incapable of acting, such as the insane, or may later develop a clear mental impairment rendering them unable to bear the consequences of their actions. In such cases, the law does not await a judicial ruling, as their interdiction stems from the nature of their psychological condition—they are interdicted by virtue of reality, mercy, and justice. Consequently, the law treats an insane or mentally impaired adult as a person of no legal capacity, completely removing their authority to act.

As for those lacking financial and social maturity—such as the prodigal or the imprudent—interdiction shall not be imposed upon them except by judicial decision, as such cases require assessment and verification. Given that the legislator’s objective is to protect those who lack full or partial legal capacity in a manner that safeguards their interests, the law has regulated the transactions carried out by a guardian over a minor’s property. It deemed administrative contracts concluded by the guardian in relation to the minor’s property to be valid and effective, provided they are carried out in accordance with the conditions and procedures prescribed by law.

A contemplative reading of the legal texts concerning capacity in UAE legislation leads us to conclude that the legislator has balanced protection and freedom, enshrining the principle of justice in a way that upholds human dignity, even in one’s weakest moments. Thus, the legal rule remains an instrument of fairness, not merely a tool of regulation.