Question:
Can buyers get refunds for vehicles with undisclosed damage in the UAE?
Answer:
When consumers buy a vehicle, they naturally expect it to be in good working condition without significant undisclosed damage. But what happens when a buyer discovers undisclosed damage after purchasing a vehicle? Do they have the legal right to seek a refund or compensation for their losses? This article investigates the legal rights of consumers in the UAE when confronted with undisclosed damage in a vehicle purchase.
In the UAE, if a buyer purchases a vehicle with undisclosed damage, they may have legal rights to obtain a refund or other remedies based on the provisions of Federal Law No. 5/1985, known as the Civil Transactions Law. This law specifically addresses issues related to hidden defects in purchased items, including vehicles, offering a legal framework to safeguard the rights of buyers.
Warranty of Hidden Defects
According to Article 543 of the Civil Transactions Law, a sale is assumed to be concluded with the understanding that the sold item should be free from defects, except for those typically tolerated. In the context of buying a vehicle, this implies that a buyer should receive a vehicle without defects.
If a buyer discovers undisclosed damage, Article 544 of the Civil Transactions Law may provide them with the option to either return the vehicle and seek a refund or accept the vehicle at the agreed price.
This provision becomes particularly significant when the damage is considered an “old defect,” signifying its existence before or during the sale while the vehicle was under the control of the seller. However, certain conditions must be met for the buyer to exercise this option.
Conditions for Exercising the Option
For a buyer to exercise their right to return the vehicle or seek a refund due to undisclosed damage, several conditions need to be considered:
Old Defect Article 544 (1): The undisclosed damage must be an old defect, which means it existed in the vehicle before or during the sale while it was under the control of the seller.
Hidden Defect Article 544 (4): The damage should be a hidden defect, one that cannot be discovered through a normal examination of the vehicle’s exterior and may require an expert’s assessment to identify.
Article 545 outlines exceptions when the seller may not be held liable for old defects. For instance, if the seller disclosed the defect at the time of sale, the buyer accepted the defect after being aware of it, or the buyer purchased the vehicle with knowledge of the defect, the seller’s liability may be limited.
On the other hand, Article 548 addresses new defects that may arise after the buyer has taken possession of the vehicle or while the vehicle is in the buyer’s possession. In such cases, the buyer may have the right to claim a price reduction unless the seller agrees to take the vehicle back with the new defect.
Furthermore, Article 551 covers situations where the seller may have assigned rights to third parties regarding the vehicle before discovering the defect. It discusses the buyer’s options for returning the vehicle to the seller under specific conditions and the seller’s right to return the defective vehicle.
Additionally, Article 555 of the law sets a time limit for filing a lawsuit related to defects in a purchased vehicle. This time limit is referred to as “prescription.” According to this article, a lawsuit for vehicle defects cannot be filed after six months have passed from the date when the buyer took delivery of the vehicle. However, it is important to note that these six months can be extended if the seller has agreed to a longer duration in their agreement with the buyer.
In conclusion, in the UAE, buyers of vehicles with undisclosed damage may have legal rights to seek a refund or other remedies under the Civil Transactions Law, provided they meet the conditions outlined in the law. However, buyers need to be aware of the six-month time limit for filing a defect-related lawsuit, unless the seller agrees to a longer period in the sales agreement.
