Limitation of Liability in Construction Contracts

This paper explores the importance of limitation of liability in construction contracts and associated legal framework in the United Arab Emirates (UAE) with an objective of assessing its adequacy in comparison to its economic counterparts. It points out that since there is no independent statute dealing with the unfair contract terms, there is no equilibrium in contract provisions. This can cause several challenges for the industry and contracting entities. Despite the fact that the UAE law does not mandate reasonableness in limitation of liability contract clauses, client organizations must adopt best practices from industries around the world and they should be driven by the numerous advantages they offer. The paper lists the importance of limiting liability in a construction contract and accompanying benefits. It also enlists the measures and recommended approach that shall be adopted by contracting parties and the state in order to achieve equipoise in the contracting setup. This study focuses on the law of the United Arab Emirates.