The Federal Law Decree No. 46/2021 on Electronic Transactions and Trust Services is the latest legislation that is a landmark in the UAE (hereinafter known as the "Electronic Transactions Law"). The Electronic Transactions Law began enforcing on January 2, 2022, to substitute Federal Law No. 1 of 2006 in demonstrating the UAE's dedication to digital transformation.
With the growing electronic communication, e-contracts and e-signatures acceptability in all sectors of the UAE business, the legislation has been introduced to define the validity and enforceability of electronic agreements and e-signatures. Electronic signatures secured under the Electronic Transactions Law receive equivalent legal recognition when these signatures comply with established requirements. The legislation states electronic records cannot lose legal enforceability due to their digital form.
The UAE has implemented multiple laws for e-contracts and e-signatures aimed at protecting against fraud and misuse while ensuring enforceability. The key ones concerning electronic transactions are:
| Clause | Law | Details |
| Legal Recognition | Electronic Transactions and Commerce Federal Law No.1 /2006 | The electronic transactions, trust services, and e-signatures are legally recognized in the UAE. |
| Article 125 | UAE Civil Code (Federal Law 5/1985) | Claims that the formation of a contract happens when one party makes an offer and the other party accepts, demonstrating intent to be legally bound. |
| Article 132 | UAE Civil Code (Federal Law No. 5 /1985) | Expressed Writing, Words, and Actions in a contract are confirmed to be an expression of intent by Article 132 of the UAE Civil Code, and thus, e-contracts are considered valid if such conditions are met. |
With respect to some agreements, like real estate transactions or sales of ships, the law of the UAE requires the contracts to be in written form, which also applies to electronic agreements. Consequently, storage and documentation of e-contracts become vital to legal enforcement.
Under the Electronic Transactions Law, an electronic signature means:
An electronic signature functions as letters, numbers, symbols, voice, fingerprint, or an electronic processing mechanism that verifies both the identity of the user and their consent towards the data content.
According to the law, there exists three classifications of electronic signatures.
The issuance of digital certificates and licensing is under the control of TSPs, which are regulated through the TDRA. Authentication certificates supersede digital signatures to establish the identity of users involved in electronic transactions. To ensure security and authenticity, the procedural system of digital contracts and signatures with licensed TSPs is done within strict bounds regarding the integrity and high standard of authentication set.
Under Electronic Transactions Law, there are three essential elements that must be met in order to qualify for enforcement under UAE law for digital contracts.
Aside from these aspects:
Although electronic contracts are considered valid, some categories of agreements still require traditional paper copies as stated below:
The following best practices are to be taken into account:
| Best Practice | Details |
| Trust Services Providers | Work with TDRA-licensed providers to obtain qualified electronic signatures as they provide greater legal assurances. |
| Record Keeping | Safeguard and backup electronic documents and the signatures applied to them for easy retrieval and protection from alteration. |
| Update Knowledge | Make sure to have current information on the laws governing electronic transactions in the UAE and specific regulations of the sector so as not to fall out of compliance. |
| Obtain Legal Advice | For sophisticated, complex, or high-value transactions, ensure electronic contracts and signatures are compliant with the law by consulting lawyers. |
Yes, e-signatures are accepted in the UAE as long as their associated verification conditions are satisfied. Similar to a handwritten signature, an e-signature has the same legal weight if it meets authentication terms. As stated in Chapter I of UAE Electronic Transactions and Commerce Law No. 2 of 2002, an e-signature is considered any form of symbols, letters, numbers, voice, or cryptographic signs meant to validate a statement.
To ensure legal binding, an e-signature must:
These steps minimize conflicts and allow fraud protection.
Yes, e-contracts are enforceable provided all verification conditions are fulfilled. The UAE electronic contract framework is addressed by:
If e-contracts satisfy the required security and authentication, they can be presented as evidence.
E-signatures may be executed through numerous methods, all of which are acceptable for contracts:
Every method offers some level of protection and authentication.
Yes, some contracts cannot be signed electronically due to authenticity or compliance problems. These are:
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