Federal Decree-Law No. (25) of 2025 promulgates a new UAE Civil Transactions Law, in force on 1 June 2026. It replaces the 1985 law in full. For technology companies, SaaS operators, IP holders, and R&D-heavy enterprises, the new law restates the rules on employee inventions, trade secrets, pre-contractual disclosure, and adhesion-style click-wrap contracts — and several common drafting habits no longer survive.
Here are four drafting moves worth making before the in-force date.
1. Employee-invention clauses — be explicit, and don't waive the special-compensation entitlement
Article 853 is the central provision for technology employers. The default rule is that inventions made by an employee belong to the employee, unless one of three carve-outs applies:
- the nature of the work requires the employee to devote effort to inventive activity;
- the employee uses the employer's materials, tools, facilities, or other means placed at their disposal for the purpose of invention; or
- the employer has expressly stipulated in the contract that the employer has the right to any inventions the employee may discover (with the court permitted to verify that the employee expressly accepted such stipulation).
Article 853(2) then introduces a special-compensation entitlement: where the invention is of "serious economic significance", the employee may claim special compensation, assessed in accordance with the requirements of justice, taking into account employer assistance and use of facilities.
Article 853(3) closes the door: any agreement depriving the employee of this special compensation is void.
The drafting consequences are operational:
- Standard IP-assignment language should be retained — express assignment with documented employee acceptance is the cleanest pathway.
- The materials-and-facilities trigger is broad. Use of employer hardware, networks, data, and R&D infrastructure is enough.
- Waivers of the special-compensation entitlement do not work. A better path is a documented calculation methodology that the employee accepts.
2. Trade-secret obligations — and the long claim window
Article 848(5) imposes on employees a continuing duty to maintain confidentiality of the employer's commercial secrets and undisclosed information, even after the termination of the contract. Article 848(6) bars retention of originals or electronic documents related to the work secrets without permission.
Article 865 then introduces a critical exception in the limitation regime. Employment claims are time-barred 2 years from termination — but trade-secret violations and breaches of undisclosed-information confidentiality are not bound by the 2-year period. Trade-secret breaches sit on the general 15-year regime.
For technology employers, three implications:
- Document the post-termination obligation in employment contracts, not in a separate ancillary policy.
- Implement a document-return protocol at exit interviews.
- Diary trade-secret breaches on the general regime, not the employment short-form.
3. Pre-contractual disclosure — even in negotiated technology deals
Articles 121–123 introduce a positive disclosure regime for negotiations. The key provisions:
- Article 121. Bad-faith conduct in initiating, conducting, or terminating negotiations creates liability for actual damage. Deliberate failure to disclose material information is itself bad faith.
- Article 122. Bilateral duty to disclose information of "decisive importance" to consent. Article 122(4) makes void any agreement that limits or excludes the duty.
- Article 123. Misuse or unauthorised disclosure of confidential negotiation information attracts liability.
For technology M&A and licensing diligence, this is a substantive change. NDAs that try to disclaim disclosure duties — common in seller-side templates — are exposed. The better drafting is to document the disclosure process explicitly: due-diligence letter, disclosure letter, representations and warranties expressly mapped to the material information disclosed.
4. SaaS and click-wrap terms — the adhesion-clause exposure
Most SaaS and digital-service contracts are adhesion contracts under Article 118(2). Three provisions affect drafting:
- Article 134. Acceptance in adhesion contracts is limited to mere acceptance of uniform conditions not open to negotiation.
- Article 223. Court may modify unfair conditions or exempt the adhering party from them; any agreement to the contrary is void.
- Article 120(2). Ambiguous terms in adhesion contracts may not be interpreted against the adhering party.
The hardship doctrine at Article 224 is also non-excludable: where exceptional general circumstances unforeseeable at contracting render an obligation onerous, the court may reduce the burden to a reasonable limit or rescind.
For SaaS terms drafting, three habit-changes:
- Hard limitation-of-liability caps against weaker B2B parties or B2C users are exposed.
- Unilateral amendment clauses are vulnerable.
- "No hardship" boilerplate cannot stand — replace with a procedural mechanism that engages with the doctrine.
Where SaaS terms include an arbitration clause and the contract is adhesion-form, the safer practice is to issue the arbitration agreement as a standalone signed instrument — mirroring the express insurance rule at Article 958(4) that voids arbitration clauses buried in printed general conditions.
A note on cross-border technology contracts
Article 19 confirms that contractual obligations follow the law expressly agreed by the parties; absent agreement, the common-domicile law applies; absent that, the law of the country where the main obligation is to be performed. For cross-border technology deals, an express governing-law clause remains the right anchor — but the new law gives operational clarity on the residual rules.
For non-contractual obligations (e.g. IP infringement claims), Article 20 applies the law of the country where the giving-rise event occurred. For UAE-situs infringements with foreign-defendant exposure, this is the doctrinal anchor.
Related Civil Code 2025 guides
Published 18 May 2026. General information only — not legal advice. Contact us for matter-specific advice.