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Commercial Contracts in Qatar: Key Rules Under the Qatari Civil Code

Commercial Contracts in Qatar: Key Rules Under the Qatari Civil Code

Qatar's Civil Code (Law No. 22 of 2004) sets the rules that apply to most commercial contracts in the country. Parties have wide freedom to agree their own terms, but some rules cannot be contracted out of. Here are the points that matter most when you negotiate or review a contract.

Good faith in performance

The Civil Code requires a contract to be performed in accordance with its terms and in good faith (Article 172). Courts look at how each party actually behaved, not only at the wording of the contract.

Agreed (liquidated) damages

Parties can agree the amount of compensation in advance (Article 265). But:

• agreed compensation is not due if the debtor proves the creditor suffered no damage;
• the court may reduce the agreed amount if it was grossly exaggerated or the obligation was partly performed (Article 266), and any agreement to the contrary is void;
• liability for fraud or gross fault cannot be limited.

So set liquidated damages at a realistic estimate of loss, and keep evidence of the harm you suffer.

Exceptional circumstances and force majeure

Parties can allocate force majeure risk in the contract. Separately, where exceptional, unforeseeable events make performance excessively burdensome — not impossible — a Qatari court may rebalance the obligations, and this rule cannot be excluded by agreement (Article 171(2)). The threshold is high: ordinary price rises are unlikely to be enough.

Termination

Under Qatari law it is arguable that a court order is needed to terminate a contract unless the parties agree otherwise. If you want the right to terminate without going to court, say so expressly in the contract.

Language and translations

Arabic is the language of the Qatari courts. Contracts and evidence in other languages must be translated by a court-approved translator if a dispute reaches court, so consider a bilingual contract and agree which version prevails.

Disputes: Qatari courts, the QFC or arbitration

• Onshore Qatari courts apply Qatari law and may disregard clauses sending disputes to foreign courts.
• The Qatar Financial Centre (QFC) has its own Civil and Commercial Court for matters within its jurisdiction.
• Arbitration is widely used and arbitration agreements are generally recognised; Qatar's Arbitration Law (Law No. 2 of 2017) is based on the UNCITRAL Model Law, and QICCA is the main local arbitration centre.

Checklist before you sign

1. Correct legal names and commercial registration numbers
2. A clear scope of work and acceptance criteria
3. Price, payment dates and late-payment consequences
4. Realistic liquidated damages and liability caps
5. Express termination rights and notice periods
6. Force majeure and exceptional-circumstances wording
7. Governing law, dispute forum and the prevailing language

How AI can help

AI contract review can check a Qatari contract against this list, flag clauses that may be unenforceable or one-sided, and explain them in plain Arabic or English before you take it to a lawyer.

Try it: review a contract with LexArab.

This article is general information, not legal advice. Consult a qualified Qatari lawyer about your contract.