The UAE’s new Civil Transactions Law, issued under Federal Decree-Law No. 25 of 2025 (New CTL), introduces a number of targeted and clarifying amendments to the regime governing deposit contract. While the core structure of the deposit contract remains familiar, several refinements enhance legal certainty, align drafting with established jurisprudential concepts, and address practical issues that had arisen under Federal Law No. 5 of 1985 (Old CTL).
Below we highlight the most significant amendments and their practical implications for contracting parties, depositaries and hotel operators.
1. Refinement of the Definition of the Deposit Contract (Article 904)
Article 904 of the New CTL refines the drafting of the definition of the deposit contract by expressly identifying its two parties – the depositor and the depositary – and by clearly providing that the depositary must, at the outset, receive property from the depositor in order to undertake its safekeeping and to return it in kind. This amendment clarifies that the depositary must first express their intention to be bound by receiving the deposit before the obligations of safekeeping and restitution arise.
By contrast, Article 962 of the Old CTL merely stated that a deposit is a contract whereby a person authorises another to safeguard their property and obliges them to return it in kind, without clearly establishing an initial obligation on the depositary to receive the deposit. The new drafting therefore reflects a sound and logical sequence in the creation of obligations: first, the depositary must receive the property from the depositor; second, the depositary must safeguard it; and finally, the depositary must return it in kind. This sequencing removes ambiguity as to when the depositary’s obligations commence and aligns the provision with the practical reality of how deposit contracts operate.
2. Deletion of the Statutory Definition of “Deposit”
The New CTL deletes the definition of “deposit” that previously appeared in Article 962(2) of the Old CTL, which stated that a deposit is “property deposited with a trustee for safekeeping.” This definition, which was borrowed verbatim from Article 868(2) of the Jordanian Civil Code, was considered unnecessary and conceptually excessive, particularly because it employed the term “trustee” despite the fact that the depositary, by nature, is already the person entrusted with safekeeping and restitution.
In addition, Article 963 of the Old CTL (retained in substance in the New CTL) already clarifies that the deposit must consist of property capable of being possessed, while Article 96 of the New CTL defines property as any object or right having material value in dealings. These provisions make a separate statutory definition of “deposit” redundant. The expression “capable of being possessed” is rooted in Islamic jurisprudence and serves to confirm that items which cannot be possessed in fact or in law – such as a bird flying freely in the sky – cannot form the subject of a valid deposit. Accordingly, the deletion simplifies the text without affecting substantive meaning and avoids unnecessary repetition.
3. Receipt of the Deposit (Actual or Constructive) Becomes an Express Obligation (Article 906(1))
Article 906(1) of the New CTL now expressly obliges the depositary to receive the deposit either actually or constructively. Under Article 964 of the Old CTL, receipt was described as the means by which the deposit is effected (“deposit is completed by taking possession actually or constructively”), rather than as a clear contractual obligation imposed on the depositary.
By elevating receipt into an express duty arising after conclusion of the contract, the New CTL removes any doubt that the depositary is obliged to accept the deposit. Actual receipt refers to physical transfer of possession from the depositor to the depositary, while symbolic receipt includes delivery of documents, keys, access codes, passwords, or similar means enabling control over the deposit without physical transfer. Constructive receipt covers situations where the deposit is already in the depositary’s possession under another legal capacity, such as where the depositary is already holding the property pursuant to a lease or other lawful basis. This amendment therefore clarifies and strengthens the depositor’s position and limits arguments that the depositary’s obligations had not crystallised due to absence of physical handover.
4. Revised Drafting of Liability for Perishing of the Deposit (Article 906)
Under Article 966 of the Old CTL, the depositary guaranteed the deposit if it perished as a result of their transgression or negligence, unless otherwise agreed. Article 906 of the New CTL now states that the deposit is held in trust and that the depositary is liable if it perishes for a reason attributable to them, unless otherwise agreed. Although this wording appears broader, it is not expected to alter the practical legal outcome.
The New Law, like the Old CTL, expressly provides that the standard of care required from the depositary is that of an ordinary person safeguarding their own property. Accordingly, the depositary’s hand remains a hand of trust, not a hand of guarantee, and the depositary is not liable for loss caused by foreign causes such as force majeure, sudden accidents, or acts of third parties. The revised drafting merely establishes a rebuttable presumption that loss is attributable to the depositary, which may be displaced by proof that the loss occurred due to an external cause beyond their control.
This interpretation is reinforced by the fact that the New Law retains express references to transgression or negligence in other provisions, including Article 919(2), which exempts the depositary’s estate from liability if heirs prove that the deposit perished without transgression or negligence before or after death.
5. Obligation to Return Produce in Addition to Fruits and Benefits (Article 913)
Article 913 of the New CTL now requires the depositary to return the produce of the deposit in addition to its fruits and benefits. This addition renders the provision more comprehensive. Fruits are yields produced periodically without diminishing the substance of the thing, such as rent or interest, whereas produce or products are yields that diminish the substance of the thing, such as extracted minerals or resources.
Both fruits and produce are, in principle, rights of the owner. By expressly including produce, the New CTL closes a former drafting gap and confirms that all economic yields of the deposited property belong to the depositor, thereby strengthening proprietary protection and enhancing the effectiveness of the provision in practice.
6. Prohibition on Returning a Disputed Deposit Without Court Permission
Under the Old CTL, where a deposit belonged to two persons and was disputed, the depositary could return it to one of them either with the consent of the other or by order of the court. The New CTL deletes the consent option and prohibits return of a disputed deposit except pursuant to court permission.
This amendment is logical in circumstances where the deposit is the subject of dispute, as obtaining mutual consent is often unrealistic. Entrusting the matter to the competent court ensures neutrality, protects the depositary from conflicting claims, and provides a clear and authoritative mechanism for resolution.
7. Court Permission Required for Delivery to Heirs in All Cases (Article 926)
Article 991 of the Old CTL permitted delivery of the deposit to the depositor’s heirs without court permission unless the estate was encompassed by debts, in which case permission was required. Given the practical difficulty of determining whether an estate is indebted, Article 926 of the New CTL now requires court permission for delivery to heirs in all cases, regardless of the financial status of the estate.
This amendment expands protection for the depositor’s creditors, relieves depositaries from the burden of investigating the estate’s liabilities, and introduces a simpler and more consistent rule that is easier to apply in practice.
8. Expanded Liability of Hotel and Similar Establishments (Article 928)
The New CTL reaffirms that hotel proprietors and similar establishments guarantee guests’ property, while expanding the scope of liability to include loss or damage caused by employees as well as by persons frequenting, visiting, or present in the establishment. This constitutes a broader application of liability for acts of others and provides enhanced protection for guests and travellers.
In addition, although hotels are not, in principle, responsible for safeguarding money, securities, or valuables unless they accept them for safekeeping or unjustifiably refuse to accept them, the Old CTL required proof of gross fault to establish liability.
The New CTL removes the requirement of gross fault, such that any fault or negligence, even if not serious, is sufficient to establish liability. While the New Law does not define a specific threshold for fault, the general rule is that fault is assessed by reference to the conduct expected of an ordinary person in similar circumstances, subject to the court’s discretionary assessment.
9. Immediate Notification Requirement and Lapse of Rights (Article 929)
Article 929 of the New CTL obliges the guest to notify the hotel proprietor or the person in charge of any theft, loss, or damage to their property immediately upon becoming aware of it. While this mirrors the Old CTL, the New CTL introduces a new consequence: unjustified delay in notification results in lapse of the guest’s right to claim.
The provision further confirms that any action against the hotel proprietor must be brought within six months from the date of departure, which is the same period stipulated under the Old CTL. Accordingly, a guest’s right is lost in two situations: first, if the guest fails to notify without justification; and second, if the guest notifies promptly but does not file a claim within six months from departure.
Key Takeaways
The New CTL introduces more precise and coherent drafting, strengthens the depositor’s proprietary position, clarifies the sequential nature of the depositary’s obligations, and expands court oversight in sensitive situations. It also significantly enhances consumer protection in the context of hotel deposits. Collectively, these amendments are expected to reduce uncertainty, improve consistency of application, and streamline dispute resolution in both civil and commercial contexts.
Key Contacts
Dr. Omar Al Azawe, Of Counsel, o.alazawe@tamimi.com
Youssef Mobasher, Paralegal, Y.Mobasher@tamimi.com