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Finance Contract for United Arab Emirates

Finance Contract Template for United Arab Emirates

A comprehensive financial agreement governed by UAE law that establishes the terms and conditions for providing financial facilities, including loans, credit lines, or Islamic finance products. The document incorporates UAE federal and local laws, Central Bank regulations, and where applicable, Sharia principles. It details the facility amount, purpose, repayment terms, security arrangements, and obligations of all parties involved, while ensuring compliance with UAE banking and finance regulations, including anti-money laundering requirements and consumer protection provisions.

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Finance Contract

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What is a Finance Contract?

The Finance Contract serves as the primary legal document for financial facilities in the United Arab Emirates, establishing the relationship between financial institutions and their clients. It is essential for various financing needs, including corporate loans, project finance, real estate financing, and working capital facilities. The document must comply with UAE federal laws, Central Bank regulations, and where applicable, Islamic finance principles. It typically includes detailed provisions on facility terms, security arrangements, representations and warranties, covenants, and events of default. The contract's structure accommodates both conventional and Sharia-compliant financing options, reflecting the UAE's dual banking system. This document is crucial for protecting the interests of both the finance provider and the borrower while ensuring regulatory compliance in the UAE's sophisticated financial market.

What sections should be included in a Finance Contract?

1. Parties: Identification of the finance provider and borrower/customer with full legal names and details as per UAE requirements

2. Background: Context of the financing arrangement and purpose of the facility

3. Definitions: Comprehensive definitions of terms used throughout the agreement, including Arabic terms where relevant

4. Facility Details: Specific details of the financial facility including amount, purpose, and key terms

5. Conditions Precedent: Prerequisites that must be satisfied before the facility becomes available

6. Repayment Terms: Details of repayment schedule, method, and currency of payments

7. Interest/Profit Rate: Specification of interest or profit rate (for Islamic facilities) and calculation methodology

8. Security: Details of collateral, guarantees, or other security arrangements

9. Representations and Warranties: Standard and UAE-specific declarations by the borrower

10. Covenants: Positive and negative obligations of the borrower during the facility period

11. Events of Default: Circumstances constituting default and consequences

12. Undertakings: Specific promises and commitments by the borrower

13. Fees and Expenses: All applicable fees, charges, and cost allocation

14. Governing Law and Jurisdiction: Specification of UAE law and relevant courts/jurisdiction

15. Notices: Communication methods and contact details for formal notices

What sections are optional to include in a Finance Contract?

1. Sharia Compliance: Required for Islamic finance facilities, specifying compliance with Sharia principles

2. Tax Provisions: Relevant if cross-border elements or VAT implications exist

3. Assignment and Transfer: Include if facility may be syndicated or transferred

4. Currency Provisions: Required for multi-currency facilities

5. Break Costs: Relevant for term facilities with fixed rates

6. Account Bank Provisions: Required if specific banking arrangements are part of the security structure

7. Insurance: Necessary if specific insurance requirements apply to the facility or security

8. Change of Control: Important for corporate borrowers

9. Force Majeure: May be included to address unforeseen circumstances affecting performance

What schedules should be included in a Finance Contract?

1. Facility Summary: Detailed breakdown of facility terms, limits, and pricing

2. Conditions Precedent Documents: List of required documentation and conditions

3. Form of Drawdown Notice: Template for requesting disbursement of funds

4. Repayment Schedule: Detailed amortization or payment schedule

5. Security Documents: Forms of security documents and guarantees

6. Form of Compliance Certificate: Template for periodic compliance reporting

7. Permitted Security: List of pre-approved security interests

8. Form of Transfer Certificate: Template for transfer of facility rights if applicable

9. Financial Covenants Calculations: Methodology for calculating financial covenants

Authors

Alex Denne

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

Publisher

Ƶ

Document Type

Financing Agreement

Cost

Free to use
Relevant legal definitions


























































Clauses













































Relevant Industries

Banking & Financial Services

Real Estate & Construction

Manufacturing & Industrial

Trading & Commerce

Healthcare

Hospitality & Tourism

Technology & Communications

Energy & Utilities

Transportation & Logistics

Retail

Professional Services

Relevant Teams

Legal

Finance

Treasury

Compliance

Risk Management

Corporate Banking

Islamic Banking

Credit Administration

Operations

Company Secretariat

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Legal Counsel

Compliance Officer

Credit Risk Manager

Relationship Manager

Corporate Banking Manager

Islamic Banking Officer

Finance Manager

Senior Loan Officer

Corporate Secretary

Chief Risk Officer

Financial Controller

Banking Operations Manager

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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