Manufacturing and Supply Agreement in UAE: Template, Key Clauses and Local Law (2026)

A manufacturing and supply agreement in the UAE sets how one party makes and delivers goods to another over time. UAE law gives parties wide freedom to agree terms, but two points matter: commercial sales follow the Commercial Transactions Law rather than the general civil rules, and the UN sales convention does not apply automatically as it does in many European countries. This guide sets out the law, the key clauses and a working skeleton. It is general information, not legal advice; confirm a live deal with a UAE lawyer. ## What law governs manufacturing and supply in the UAE? There is no single supply statute. The framework has several layers: - General contract and sale rules: the Civil Transactions Law (Federal Law No. 5 of 1985, as amended), which sets out formation, performance, the duty of good faith, and the general rules on sale (bay).

• Commercial dealings: the Commercial Transactions Law (Federal Decree-Law No. 50 of 2022), in force since 2 January 2023, which governs transactions between traders and modernised the previous 1993 law.
• The CISG: the UAE is not a contracting state, so the UN Convention on Contracts for the International Sale of Goods does not apply by default. Parties who want international sales rules commonly adopt Incoterms and the ICC rules expressly in the contract.
• Product liability and consumer protection: the Consumer Protection Law (Federal Decree-Law No. 15 of 2020) and its rules protect buyers and can impose liability for defective or unsafe products, separate from the contract. As with other UAE contracts, the DIFC and ADGM free zones run their own common-law frameworks, so confirm whether the deal is onshore or in a free zone. ## Key clauses in a UAE manufacturing and supply agreement - Products and specifications: detailed specs, quality standards and a change-control process.
• Forecasts and orders: rolling forecasts, firm order windows, minimum and maximum volumes, and lead times.
• Price and payment: price, currency, invoicing, payment terms and interest on late payment (confirm the agreed rate is enforceable under UAE law).
• Delivery, title and risk: delivery terms (commonly an Incoterms rule), when title passes, and when risk passes.
• Quality, inspection and acceptance: inspection rights, acceptance tests, and remedies for non-conforming goods.
• Warranties: conformity, fitness for purpose and duration.
• Liability and product liability: caps, carve-outs, insurance and a recall procedure, read against the consumer protection regime. Note that UAE law limits the ability to exclude liability for certain harm, so draft caps carefully.
• Intellectual property and tooling: who owns designs, moulds and tooling, and who may use them.
• Term and termination: duration, renewal, termination for breach or insolvency, and run-off supply on exit. UAE courts can review whether a termination was exercised in good faith.
• Force majeure: relief events and the duty to mitigate. UAE law also recognises exceptional-circumstances relief, so an express clause gives certainty.
• Governing law and forum: UAE law (or the relevant free-zone law), the chosen international sales rules (such as Incoterms), and a court or arbitration. ## A simple drafting skeleton 1. Parties and date

2. Definitions and specifications
3. Scope of supply
4. Forecasts and ordering
5. Price and payment
6. Delivery, title and risk (Incoterms)
7. Quality, inspection and acceptance
8. Warranties
9. Intellectual property and tooling
10. Liability, product liability and recall
11. Term and termination
12. Force majeure
13. Confidentiality
14. Governing law (UAE or free zone), international sales rules, dispute resolution
15. Signatures Give the most attention to specifications, delivery and risk, liability, and the choice of governing law and forum. ## Common mistakes to avoid - Assuming the CISG applies, when the UAE is not a contracting state and the parties must adopt international rules expressly.

• Treating a commercial sale under the general civil rules when the Commercial Transactions Law applies.
• Drafting a wide liability exclusion that UAE law will not fully enforce.
• Ignoring the onshore versus free-zone distinction, which changes the applicable law and forum. ## Keeping a supply portfolio under control If you buy or make goods across several countries, the hard part is not one contract. It is tracking which forecasts are binding, when each term renews, which governing law applies, and which international rules were adopted. That work (drafting from a tuned template, flagging risky clauses, tracking renewals, keeping versions straight) is what an AI contract workspace can hold in one place. Adira is built for this, with per-clause risk review, plain-English clause editing and a live activity timeline; it is India-first today with other jurisdictions on its roadmap, so verify local depth before relying on it for UAE law. More at Adira. The law above stands on its own. ## Bottom line A UAE manufacturing and supply agreement gives broad freedom, but a commercial sale follows the Commercial Transactions Law, the CISG does not apply unless the parties adopt international rules, and liability exclusions have limits. Define specifications, delivery, risk and liability with care, set the governing law and forum clearly, and get UAE advice before signing a real deal.