UAE Civil Transactions Law

Article 461

Book Two: Nominate Contracts · Section One: Contracts of Transfer of Ownership · Chapter One: Contract of Sale · Part One: Definition and Elements of the Contract of Sale

1. A sale may be conducted by a Murabaha (cost-plus sale), Tawliya (sale at cost), or Wadi'a (sale at a loss). 2. Murabaha is a sale at the original purchase price paid by the seller, with a specified added profit. Tawliya is a sale at the original purchase price without addition or reduction. Wadi'a is a sale at the original purchase price with a specified reduction. 3. In these types of sales, the original purchase price must be known, in order to avoid deception and accusation. 4. If it appears that the seller has unjustifiably overstated the cost of acquiring the subject matter of the sale, the purchaser shall be entitled to deduct the excess. 5. If the cost of acquiring the subject matter of the sale was not known at the time of contracting, or if the seller concealed a matter affecting the subject matter of the sale or its acquisition cost, the purchaser shall have the right to rescind the contract upon becoming aware thereof. This right shall lapse if the subject matter of the sale perishes, is consumed, or is disposed of by the purchaser after delivery.

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