Limitation and exclusion of liability clauses are a central feature of construction contracts. They define the financial boundaries of risk between the employer and the contractor, providing commercial certainty and reducing exposure to disproportionate damages.

Under Federal Law No. 5/1985 On the Civil Transactions Law of the United Arab Emirates State, contractual freedom is recognised but limited by public-order considerations and the doctrine of good faith. Clauses excluding liability for fraud, gross error, or harm are void.

In contrast, the Dubai International Financial Centre (DIFC) and the Abu Dhabi Global Market (ADGM), which are both common law jurisdictions, emphasise autonomy of contracts. Parties are generally free to allocate risk as they wish, provided their agreement is clear and not contrary to statute.

This Practice Note provides comparative practical guidance on limitation and exclusion mechanisms under the United Arab Emirates (UAE), DIFC, and ADGM laws, with particular reference to their application in construction contracts and guidelines under the Fédération Internationale des Ingénieurs-Conseils (FIDIC), specifically the FIDIC Conditions of Contract for Construction, General Conditions, 2017.