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30 November 2023

SPA is also a contract of exchange, says top court

By Mohammed All Sadafy

The Dubai Court of Cassation has established several principles including that the contract of sale is considered a contract of exchange under which the buyer takes something in return of the value given to the seller. The court  also stated that the vendor cannot be compelled to implement his commitment in case the buyer does not fulfill his.

The court also stated that although the cheque was originally considered a mode of payment, but withdrawing it will never be considered acquaintance of its owner, unless the drawee has received its value.

These principles were issued when the Court of First Instance looked into a lawsuit filed by the buyer of a real estate unit (plaintiff) against a real estate company (the defendant). The former asked to be handed over the apartment and for the transfer of its ownership to him.

The plaintiff said he had bought the residential unit and paid the full amount Dh229.000 in two cheques, but the real estate company did not hand over the apartment and did not transfer ownership of the unit in his name, and therefore he filed his lawsuit against the company.

The Court of First Instance issued a ruling requiring the real estate company to hand over the apartment to the plaintiff.

The real estate company appealed against this ruling, where the Court of Appeal upheld the ruling.

The real estate company again did not accept the verdict of the Court of Appeal and appealed the ruling before the Court of Cassation which issued these legal principles.

The Court of Cassation referred the case again to the Court of Appeals.