Buyer awarded refund and compensation after court finds scratches constituted an “old defect” present before delivery
The Abu Dhabi Commercial Court of First Instance has ruled to terminate a vehicle purchase contract worth AED127,000 after it was proven that the car had scratches before it was delivered to the buyer. The court considered the scratches an “old defect”, entitling the buyer to seek termination of the contract, recover the amount paid, and claim compensation for material and moral damages.
A young man filed a lawsuit against a car sales company, seeking the cancellation of a vehicle sale contract and the return of the amount he had paid, together with legal interest at a rate of 9% from the date of the claim until full payment. He also requested AED30,000 in compensation for material and moral damages, in addition to fees, expenses and costs. He stated that he had purchased the vehicle from the defendant and paid the purchase price, but the vehicle was not delivered on time. He later refused to take delivery because of a defect in the vehicle.
The defendant’s lawyer submitted a memorandum requesting the dismissal of the lawsuit and for the plaintiff to bear the fees, expenses and costs.
In the reasoning of its judgment, the court explained that the Civil Transactions Law stipulates that if an old defect appears in a sold item, the buyer has the option to return it or accept it at the agreed price. A defect is considered old if it existed before the sale or occurred after the sale while the item was still in the seller’s possession and before delivery. The court added that rescission requires the return of the item to its owner and the recovery of any amounts paid.
The court noted that the documents showed, without dispute between the parties, that the plaintiff had not taken delivery of the vehicle. Photographs also showed scratches on the vehicle that was the subject of the contract. The court concluded that the scratches constituted an “old defect” because they occurred while the vehicle was in the seller’s possession, giving the plaintiff the right to seek rescission of the sale contract.
The court also upheld the plaintiff’s right to claim interest after finding that the defendant had erred and that the case documents contained no evidence that the debt had been repaid. It said this fulfilled the conditions for the award of late-payment interest as compensation for delay.
The court further upheld the plaintiff’s right to compensation for material and moral damages, finding that the defendant’s conduct had caused harm by tying up the plaintiff’s funds and subjecting him to psychological distress.
The court ruled to terminate the vehicle purchase agreement and ordered the defendant to return the amount paid by the plaintiff. It also awarded AED5,000 in compensation, together with late-payment interest on the awarded amounts at an annual rate of 3% from the date of the claim until full payment, provided that the interest does not exceed the principal debt. The defendant was also ordered to pay the expenses and AED200 in lawyers’ fees.
Source: Emirates 24|7