The Commercial Law aims to regulate commercial transactions and everything related to business within the UAE.
In order to change some provisions regarding bounced checks and the issue of checks with no value, the revisions provide quick, sophisticated, and civil ways to recover the necessary amounts.
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Amendments provided by Federal Decree Law No. 14 of 2020-The Commercial Law
- A cheque is due for payment on the date shown thereon as its date of issue. A cheque may not be presented for payment prior to such date.
- Where the consideration for payment is less than the value of the cheque, the drawee shall effect part payment to the extent of the funds available to it, unless the bearer refuses so, and the drawee shall confirm receipt of such amount on the back of the cheque and provide the bearer with the original cheque and a certificate to that effect. The right of recourse for the balance shall be established by the original confirmed cheque in accordance with Article 635 bis of this Law, or by means of protest after the lapse of the time limits as stated in Article 632 of this Law.
- The drawee shall notify the Central Bank of the details of the account holder, in accordance with the regulations and rules issued by the Central
Bank to this effect, in any of the following cases:
- If the cheque has no sufficient existing and withdrawable balance on its maturity date
- If the drawer recovers all the consideration for payment of the cheque after its issuance, making the cheque incapable of being cashed.
- If the drawee effects part payment of the cheque amount, in accordance with Clause (2) above.
What does Article 641 provide?
Article 641 provides: Shall be sentenced to a fine not less than (10%) of the value of the cheque, with a minimum of AED 5000 and not in excess of the equivalent of twice the value of the cheque, whoever commits any of the following acts:
- Intentionally and falsely declares that there exists no consideration for payment or that the consideration is available but is less than the value of the cheque.
- Refuses in bad faith to pay a cheque drawn on a bank to a bearer against whom no valid countermand has been issued, despite the existence of the consideration for the cheque.
- Refuses in bad faith to issue the statement referred to in Article 632 of
- Refuses to effect part payment of the amount of the cheque or to issue a certificate to this effect or handover the original cheque, in accordance with the provisions stated in Clause 2 of Article 617 of this Law.
Articles 401, 402 and 403 of the Federal Law No. 3 of 1987 Promulgating the Penal Code shall be repealed.
This Decree-Law shall be published in the Official Gazette and shall enter into force on 02/01/2022.
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FAQ about Commercial Transaction Law in the UAE
1-What is the law of commercial transaction?
The cornerstone of the legal principles guiding business transactions is the commercial transaction.
2-What are the types of commercial law?
- corporate law. Business law. corporate leadership.
- competitive law (antitrust)
- consumer defense.
- Law of contracts.
- environmental regulation
- governing intellectual property. copyright regulations. a patent code. brand legislation.
- Law governing global trade.
- labor laws.
3-Is private lending legal in UAE?
Legality. Private lending is a prohibited activity in the UAE. As long as there are borrowers, there will also be lenders, according to the authorities, thus both parties will be punished equally for this infraction. Borrowers were frequently arrested as a result of taking out unauthorized loans.
This was an overview of the Commercial Law’s laws, guidelines, and amendments.