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03 December 2023

Dubai objects to new car contract

By Staff

Dubai’s economy authorities have objected to a new unified car sale contract enforced by the ministry of economy at the start of 2012, saying it is illegal and violates the rights of consumers.

The surprise statement by the Dubai Department of Economy (DED) came as the ministry informed all car dealers that they must abide by the new contract, which it said does not contravene with the consumer protection laws.

“Some articles in the new contract are illegal and contravene with the consumer protection laws in the UAE,,,they infringe on the rights of consumers and do not conform to the principle of achieving the required justice between dealers and consumers,” DED said in the statement carried by the Dubai-based Arabic language daily Emirat Alyoum.

It said DED would not enforce the new contract and would implement only laws pertaining to consumers’ protection in case it receives complaints from buyers and other consumers.

DED also said it would sent a letter to the minister of economy requesting a revision of the new contract. “DED will also ask for suspending the new contract until a thorough study on it is carried out.”

In a previous statement, the ministry of economy said the new car sale contracts, which be binding for all auto dealers through the UAE, would provide more protection to consumers against faulty or fake products and allow buyers to return vehicles or get compensated if it is proved to be faulty.

The phrase on previous contracts “items once sold cannot be returned or replaced”, which was loathed by consumers, has been omitted from the present contract, which has been published in Arabic language dailies.

The new contracts, in both Arabic and English, cover all products related to the car market, included vehicles, spare parts and maintenance, it said.

On Monday, the ministry said it had notified all car traders in the second largest Arab economy to comply with the new contract as from January 1, saying it does not contradict with consumer protection laws.

“Articles 7 and12 in the contract do encroach on the consumers’ rights and do not conform to the principle of justice between the buyer and dealer,” said Abdullah Al Shehi, Director of Trade Protection Division at DED.

He said article 7 states that the car dealing firm is not responsible for any delay in the delivery of the car to the buyer due to factory reasons nor does it bear the damages or loss resulting from factory’s inability to deliver the car.

“What is the consumer’s fault to bear the losses resulting from failure by the factory to deliver the bought car on time….does it make sense that a consumer bears the responsibility for the factory’s delay in delivering the car although the consumer has not signed the purchase deal with the factory…”

Shehi said in such a case, the factory must bear any loss resulting from delivery delays since it is tied to contract with the dealer not consumer.

He said article 9 in the new car sale contract is also against the interests of consumers since it binds the buyer to give up all his rights in case it turns out the car has factory faults after the purchase.

“How can the consumer abandon a right guaranteed by the law…I think this article opens the door for massive violations of the consumer protection laws which require sellers to grant buyers all their rights as long as they are legal.”

Shehi said other articles in the five-page contract are also faulty and that they only “restrict rather than protect consumers.”

“For this reason, DED rejects this new car contract and demands changes in it in order to find a balanced and fair relationship between the seller and buyer,” he said, adding that DED has received many complaints over the past few days from car buyers.