Commercial Settlement Agreement for United Arab Emirates

Commercial Settlement Agreement Template for United Arab Emirates

A Commercial Settlement Agreement under UAE law is a formal legal document used to resolve commercial disputes between business parties through mutual agreement rather than court litigation. This document, governed by UAE Civil and Commercial laws, including Federal Law No. 5 of 1985 (Civil Code) and Federal Law No. 18 of 1993 (Commercial Transactions Law), provides a comprehensive framework for settling business disputes. It incorporates specific UAE legal requirements, including Sharia compliance considerations, and typically covers settlement terms, payment provisions, mutual releases, and future obligations of the parties.

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What is a Commercial Settlement Agreement?

A Commercial Settlement Agreement is a crucial document used in the UAE business environment to resolve commercial disputes without resorting to lengthy court proceedings. This agreement type is particularly relevant when businesses seek to maintain commercial relationships while addressing disputes, claims, or differences. The document must comply with UAE Federal Laws, including the Civil Code and Commercial Transactions Law, and often requires consideration of Sharia principles. It typically includes detailed settlement terms, payment arrangements, mutual releases, and future obligations. The agreement is commonly used in situations involving contract disputes, payment conflicts, business relationship terminations, or commercial disagreements where parties prefer an amicable resolution. Its effectiveness in the UAE jurisdiction depends on proper drafting that accounts for local legal requirements and business practices.

What sections should be included in a Commercial Settlement Agreement?

1. Parties: Identification of all parties to the settlement, including full legal names, addresses, and registration details

2. Background: Recitals explaining the dispute or circumstances leading to the settlement, including reference to any existing proceedings

3. Definitions and Interpretation: Definitions of key terms and interpretation rules for the agreement

4. Settlement Terms: Core settlement provisions including payment terms, mutual releases, and specific obligations

5. Payment Provisions: Detailed payment terms, including amounts, method, currency, and timing

6. Mutual Release and Waiver: Provisions for mutual release of claims and waiver of future rights related to the settled matter

7. Confidentiality: Obligations regarding confidentiality of the settlement terms and related information

8. Representations and Warranties: Standard representations about authority to settle and binding nature of agreement

9. Governing Law and Jurisdiction: Specification of UAE law as governing law and relevant courts' jurisdiction

10. General Provisions: Standard boilerplate clauses including entire agreement, amendments, and severability

What sections are optional to include in a Commercial Settlement Agreement?

1. Non-Admission of Liability: Used when parties want to explicitly state that the settlement does not constitute admission of liability

2. Condition Precedents: Include when settlement effectiveness depends on certain conditions being met

3. Tax Provisions: Required when settlement involves significant payment with tax implications

4. Future Cooperation: Used when parties need to maintain business relationship post-settlement

5. Non-Disparagement: Include when reputation protection is important to either party

6. Implementation Steps: When settlement requires complex implementation or phased execution

7. Dispute Resolution: Include detailed arbitration or mediation clauses for future disputes

8. Third Party Rights: When settlement affects rights of parties not directly involved in the agreement

What schedules should be included in a Commercial Settlement Agreement?

1. Schedule 1 - Settlement Payment Details: Detailed breakdown of settlement amounts, payment schedule, and bank details

2. Schedule 2 - Released Claims: Comprehensive list of claims being settled and released

3. Schedule 3 - Implementation Timeline: Detailed timeline for implementation of settlement terms

4. Schedule 4 - Related Proceedings: List of legal proceedings to be discontinued

5. Schedule 5 - Form of Release: Template for any additional release documents required

6. Appendix A - Supporting Documents: Key documents referenced in the settlement

7. Appendix B - Corporate Authorizations: Copies of board resolutions or other authorization documents

8. Appendix C - Related Agreements: Copies of any related agreements affected by the settlement

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Publisher

Genie AI

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Manufacturing

Trading

Construction

Real Estate

Financial Services

Technology

Retail

Healthcare

Energy

Transportation

Professional Services

Telecommunications

Hospitality

Industrial

Import/Export

Relevant Teams

Legal

Finance

Commercial

Compliance

Risk Management

Corporate Affairs

Business Development

Operations

Executive Leadership

Treasury

Contracts Administration

Relevant Roles

Chief Legal Officer

Legal Director

Commercial Director

Chief Financial Officer

Managing Director

General Counsel

Legal Manager

Contract Manager

Compliance Officer

Business Development Manager

Commercial Manager

Finance Director

Risk Manager

Corporate Secretary

Operations Director

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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