Contract Laws and Breach of Trust in the UAE

UAE contract laws state that any action that goes against the implicit trust granted by an agreement between the trustor (the person giving the trust) and the trustee (the person entrusted) is known as breach of trust.

For a breach of trust to have taken place, some specific elements should exist.

1- The person in breach must obtain possession of an object either on the basis of trust, usage, lease or mortgage for breach of trust to happen

2- A breach of trust can only apply to a moveable object such as money or a document.

3. To be classed as a breach of trust, the object in question needs to be obtained, damages or wasted or lost without proper authority having been granted. This is a specific difference to theft or fraud as an actual physical damage must be suffered.

4- Where a shareholder prevents other shareholders from exercising their rights for personal gain, a clear breach of trust exists.