Does a UAE services contract have to state a fee?

It is safer to state one, but Article 71 of Federal Decree-Law No. 50 of 2022 fills the gap. Where a merchant performs business or services for a third party related to his commercial activities, he is deemed to have done so for consideration unless otherwise established, and the amount is fixed by custom or, in the absence of custom, by the court.

Can we charge late payment interest under UAE law?

Yes. Article 84 of Federal Decree-Law No. 50 of 2022 makes a delaying debtor liable for the interest in Articles 72 and 73 as compensation, Article 85 removes the need to prove damage, and Article 86 runs the interest from the maturity date. Article 88 prohibits compound interest, including as complementary compensation.

Can a UAE commercial contract be signed and served electronically?

Article 5 of Federal Decree-Law No. 46 of 2021 on Electronic Transactions and Trust Services provides that an electronic document does not lose its legal force or enforceability for being electronic, and that no one is required to use an electronic document without consent. For formal notices between merchants, Article 81 of Federal Decree-Law No. 50 of 2022 permits electronic or similar modern means identified by a resolution of the Minister of Justice, alongside the Notary Public and registered letter.

Service Agreement in the UAE

A commercial services contract in the UAE inherits a set of defaults that parties rarely restate. Under Federal Decree-Law No. 50 of 2022 a merchant's services are presumed to be for a fee even where none is agreed, interest on an overdue money obligation runs from the maturity date without the creditor proving loss, compound interest cannot be claimed at all, and formal notices between merchants go through the Notary Public or by registered letter with acknowledgement of receipt.

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Governing law

Federal Decree-Law No. 50 of 2022 promulgating the Commercial Transactions Law supplies the general obligations regime for commercial services between merchants, including consideration, delay interest, notices and time to pay.

Federal Decree-Law No. 50 of 2022 promulgating the Commercial Transactions Law (official English text, UAE Government Portal)

What a service agreement has to contain in the UAE

Where a merchant carries out business or services for a third party related to his commercial activities, he is deemed to have done so in return for consideration unless otherwise established, and that consideration is determined by custom or, in the absence of custom, by the court.
Federal Decree-Law No. 50 of 2022, Art. 71
Where a commercial obligation is a sum of money that was certain when the obligation arose and the debtor delays payment, he must pay the creditor the interest provided for in Articles 72 and 73 as compensation for the delay unless otherwise agreed, and the creditor does not have to prove that the delay caused damage.
Federal Decree-Law No. 50 of 2022, Arts. 84 and 85
Interest for delay on commercial debts accrues from the maturity date of the debt unless the law or the agreement provides otherwise, and a creditor may not claim compound interest or claim it as complementary compensation.
Federal Decree-Law No. 50 of 2022, Arts. 86 and 88
Summons and notices on commercial matters are served through the Notary Public, by registered letter with acknowledgement of receipt, by electronic or similar modern means identified by a resolution of the Minister of Justice, or by any other method the parties agree.
Federal Decree-Law No. 50 of 2022, Art. 81
Courts will not grant a debtor under a commercial obligation a period for full payment or payment in instalments except with the creditor's consent or in general exceptional circumstances.
Federal Decree-Law No. 50 of 2022, Art. 82

Form, notarisation and registration

An electronic document does not lose its legal force or enforceability for being in electronic form, but nothing in the law requires a person to use an electronic document without their consent, and consent may be inferred from conduct.
Federal Decree-Law No. 46 of 2021 on Electronic Transactions and Trust Services, Art. 5
Where legislation requires a document to be stored, storing it electronically satisfies that requirement only if it is kept in the form created, sent or received or a form that accurately represents it, kept usable for later reference, and stored with the information identifying the originator, destination and the date and time of sending and receipt.
Federal Decree-Law No. 46 of 2021, Art. 6(1)

What catches drafters out

Compensation above delay interest is not automatic. A creditor may claim complementary compensation only by proving that damage in excess of the interest was caused by the debtor's deception or serious error, and a court may reduce or refuse interest for any period the creditor prolonged the dispute in bad faith.
Federal Decree-Law No. 50 of 2022, Art. 87