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Are contracts fool-proof?

The Dubai Department of Economic Development’s commercial control sector has chalked out a study on non-compliance to conditions regarding the agreement or contract concluded between the trader and consumer. It has been prepared following complaints lodged by consumers on violation of the agreement or contract. The study aims to enlighten and familiarise the consumer with the process of the contract, by admitting his right to inform — the right which spearheads the basic rights of the consumer. This is, in turn, associated with several rights approved by international conventions, of which the right of choice and that of education are most important.

The study touched upon the phenomenon of non-compliance with the conditions of the contract or the agreement on the basis of the 2012 statistics in comparison of 2013 figures. It also aimed at studying the phenomenon, singling out the reasons and laying down solutions.

The findings of the study show that while 35 per cent of the complaints were on non-compliance with the conditions of the contract or agreement last year, the number has come down to 34 per cent this year.

The rates, however, remain high despite the commercial control and consumer protection sector and it is felt that everything needs to be done to slash the levels.

By casting light on the type of complaints, the contracts and the reasons, the study came to the conclusion that there was a flaw in the contracts themselves. The study came up with the some major cases of infringement which can be considered as examples in order to make the public aware of what to look for when concluding a contract.

> When handling complaints, there is a predominant rule or “Pacta sunt servanda” on which traders rely on. The expression signifies that the agreements and stipulations of the parties to a contract must be observed, or the contract serves as binding code for the two contracting parties. However, it needs to be pointed out that this right does not contravene the spirit of the public order, manners and the legal provisions which govern and streamline the relationships between the individuals.

> There are conditions which are dictated by the professional trader in a sense that they could be familiar in his transactions and dealings with his counterparts who practice the same profession.

However, one question could be raised here.

Are all the conditions the professional trader dictates on the consumer binding, as they could be part of the commercial contract of that trader?

The purpose of dictating a sort of protection by the professional trader for the consumer should be based on the balanced legal relationship between the two, in a way that protects the consumer from being inflicted with a damage.

> The complaints are related to the returning of the retainer, as paying the retainer is evidence that the contract has become conclusive.

> Including written conditions in the contract means it is a two-way process. There could be an explicit inclusion of known conditions in commercial contracts, and also an implicit inclusion of conditions.

A consumer could be signing the contract with the professional trader where the conditions are explicitly mentioned. However, if the conditions are implicit, the consumer may not be aware of the conditions.

> The phenomenon of arbitrary conditions happens as a result of excessive economic activity and disparity in the economic (financial) positions of the two parties of the consumer contract.

This enables the trader to single-handedly lay down the conditions of the contract because, invariably the consumer signs the contracts without reading and going through the conditions.

In most cases the trader seeks to include broad powers to terminate the contract at his discretion, and at the same time diminish the powers of the consumer.

>In complaints regarding defects in products, the seller will not be responsible in certain circumstances. These include:

- If the seller shows the buyer the defect at the time of the sale

- If the buyer is satisfied with the defect after being shown to him or after he is informed by someone else.

- If the buyer buys the product after being aware of the defect.

- If the trader sells the defective item under the set condition of not being responsible for any defect or a specific defect.

>There could be cases where the contracts which are binding on the two parties cannot be executed due to an unforeseen incident. In such cases, execution of the contract becomes impossible and there is automatic termination of the contract.

The contract recommends educating the consumer by introducing educational and cultural programmes in the curriculum, beginning at the preparatory school level.

Other recommendations set by the study include using media to enlighten the consumer about his rights, simplifying the procedures, and reducing the lawsuit charges regarding the consumer at the courts.

The consumer protection department at DED works to settle the disputes in about 90 per cent of the cases. The aim is to avoid resorting to courts.

The study advises both the consumer and the trader to have the blue book issued by the DED as a reference for it regularises the policies which streamline the relationship between the two (trader and consumer).

Complaints & Responses

Damaged goods: A consumer lodged a complaint claiming that he purchased 1,000 USB flash memory disks from a shop. He said he paid the shop Dh18,500 for the same. After receiving the goods, the consumer checked the USB memory disks and found that they were not working. He contacted the shop for a replacement or a refund. The shop manager, however, refused.

The Consumer Protection Section communicated with both the parties and confirmed that the complainant’s claims were correct. The shop was directed to refund the consumer’s money and the complaint was closed.

No refund if dress is used: A lady bought two dresses from a ready-made garment shop for a special occasion. Ten days later, she went back to the shop, claiming that one of the two dresses did not fit her and demanded a refund. This was rejected by the shop.

The Consumer Complaints Section contacted both the parties. The shop manager said that when the lady bought the dresses, she had made the necessary alteration. Despite this, she went back and claimed a refund. The manager lamented that this is an “unacceptable behaviour” because the dress has been used by her. He offered to make further alteration or modification, if any. Consequently, the lady was briefed that she would not be entitled to a refund if she had used the dress, which had no defects. The complaint has been shut.

Mechanic damaged car: A lady alleged that she drove her car to a garage to get it serviced. When she went back to collect it, she found that the car had been involved in an accident. The car was repaired by the garage technician. The woman, however, is seeking compensation.

The Consumer Complaints Section verified the authenticity of the lady’s complaint and found that it was during the time the car was in the garage that the damage had occurred. The garage mechanic repaired the car, but the lady is seeking compensation. The section advised her to move the court and sue the garage, as only courts of law can decide on compensation matters. The complaint has been closed.

Compiled by Salah Al Deberky

• UAE