Unified UAE Legislation Database

FAQ: Can a car sale contract be terminated if a hidden defect is discovered after the transaction?

Status

In force

Issuing Authority

Effective date

XX.XX.XXXX

Official Link

https://

Answer:  Yes, it is possible. According to Article 237, Article 238, and Article 543, Article 544, Article 545 of the UAE Civil Code, the buyer has the right to terminate the sale contract if all of the following conditions are met:

- the defect is substantial and existed prior to the sale;

- the buyer was unaware and could not reasonably have known about the defect at the time the contract was concluded;

- the seller failed to disclose the defect or deliberately concealed it.

 

For example, if the vehicle had a serious hidden defect — such as a chassis deformation due to an accident — the buyer has the right to claim:

- termination of the contract;

- full refund of the purchase price;

- compensation for incurred losses.

 

Relevant case law:

Case No. 349 of 2025 / Federal Supreme Court / Commercial