Non-compete clauses in commercial contracts are widely recognised under United Arab Emirates (UAE) law as a legitimate mechanism for protecting commercial interests, confidential information, trade secrets, and client relationships. Such clauses are commonly used in employment agreements, consultancy arrangements, agency relationships, shareholder agreements, and
commercial service contracts, particularly in competitive sectors such as technology, consulting, financial services, and sales.
Under UAE law, non-compete obligations must strike a balance between protecting the legitimate interests of the benefiting party and preserving the professional and commercial freedom of the restricted party. Excessive restrictions may be deemed unenforceable if they unfairly restrain trade or prevent a party from earning a livelihood.
The primary legislation governing non-compete obligations in commercial relationships includes Federal Decree-Law No.50/2022 On the Promulgation of the Commercial Transactions Law and Federal Decree-Law No. 33/2021 On Regulation of Labour Relations. UAE courts generally assess the validity of non-compete clauses based on legitimate interest, clarity, proportionality, geographical scope, and reasonable duration.
This Practice Note discusses the practical considerations for drafting enforceable non-compete clauses in the UAE, including legal compliance requirements and key contractual protections.
Written by Emad Elhabbak
To read the full article, click here Key Considerations for Non-Compete Clauses in Commercial Contracts.
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This article was first published by LexisNexis Middle East.
16 July , 2026
