Be Cautious: Don't trust buyers too much, creditors told

What can a businessman in UAE do if a debtor delays payment or flees the country without paying?

According to Salah Al Halyan, a financial advisor and founder of the Bisat website for financial consultancy, it would be unwise of a businessman to 
trust buyers too much.

Al Halyan urged UAE businessmen to  make use of the expertise of lawyers while drawing up contracts and to read the contracts carefully. Big contracts must include a clause about private arbitration in case of a dispute, which will make litigation easier.

Arbitration can resolve differences over business contracts faster than by approaching courts, which may consume more time and more money in lawyer’s fees, he said.

Al Halyan said businessmen must ensure that the other party has a licence issued by the Department of Economic Development. They must also check the dates on the cheques issued to them by buyers.

The seller can also try to collect information about the buyer by searching the Internet, he added.

Al Halyan said the trader must enquire about the buyer’s reputation for honouring contracts by asking other businessmen who have dealt with him.

It would be better not to deal with a party if it is known that he has had disputes with other traders about payment or about compliance with terms of 
the contract.

Al Hayan said some fraudsters rent showrooms to convince others to deal with them. Sometimes, after signing of the contract and collecting payment, the showroom would be closed down and the buyer would vanish or flee the country.

Al Halyan said it is bad sign if the debtor delays payment, does not take phone calls or if his mobile is switched off. If this happens, the creditor 
should inform the police who can check whether he is in the UAE or not.

If a trader finds that his creditor has fled and that his bank balance is insufficient to encash cheques issued by him, then the creditor can file a 
lawsuit before the competent civil court. If the debtor is bankrupt, the creditor can ask the court to attach his assets or property for sale and 
division of the proceeds among the creditors, he added.

Al Halyan said since UAE is a member of Interpol, a warrant to arrest the absconding debtor from the country he has escaped to can be issued, provided that country is also an Interpol member.

But success will depend on the cooperation of the government of the other country.

Al Halyas advised businessmen not to give goods of high value on credit while dealing with traders for the first time.

 

Follow Emirates 24|7 on Google News.