The Hidden Defect in Sale and Contracting Agreements in the UAE

Your Rights and Options Under the 2025 Civil Transactions Law

07 May 2026

If you bought a car, apartment, or goods and later discovered a defect you were unaware of at the time of purchase — are you entitled to a refund? And if a building was constructed for you and cracks or structural defects appeared years later — who is responsible? Federal Law No. (25) of 2025, which issues the Civil Transactions Law, answers these questions with detailed and updated provisions. Our office team reviews the key aspects related to hidden defects in sales and contracting in this article.

Hidden defects in sales and contracting in the UAE
Your Rights and Options Under the 2025 Civil Transactions Law

First: What is a hidden defect in sales contracts?

A sale is considered valid based on the absence of defects in the sold item. According to Article (494) of the law, a hidden defect is one that meets the following conditions collectively:

Conditions of hidden defects	Detail
Old defect present before the sale	Or occurred after it while in the seller's possession and before delivery
Not visible upon inspection	Cannot be identified by an ordinary person with a normal examination
Can only be revealed by an expert	Or only appears through experience

Judgment regarding hidden defects:Any defect that appears after the buyer receives the sold item and is proven to have arisen from a cause present in the item before delivery is treated as a hidden defect and is entitled to warranty.

Second: When is the seller obligated to provide a warranty?

According to Article (496), the seller is obligated to provide a warranty in two cases:

If the sold item did not possess the characteristic that the seller assured the buyer was present.
If the sold item has a defect that diminishes its value or utility according to the intended purpose — the seller is liable for this defectEven if they were unaware of its existence.When is the seller not liable?

Article (497) specifies cases in which the warranty is void:

If the seller informed the buyer of the defect at the time of sale.

If the defect is one that is commonly accepted not to be questioned.
If the buyer accepted the defect after being made aware of it or knowing about it.
If the buyer accepts the defect after being informed of it or knowing about it.
If the buyer purchases the item while being aware of its defects.
If he stipulates non-responsibility for any defect in it or for a specific defect — unless the seller intentionally concealed the defect fraudulently.
If the defect occurred after delivery unless it was based on a cause existing before it.
If the sale was conducted through auction by judicial or administrative authorities.

Third: What are the buyer's options when a hidden defect appears?

Article (495) grants the buyer three options when a hidden defect appears — this is a significant development from the previous law:

Option	Guarantee
Return	Return the item to the seller and recover the full price
Retain the item while demanding a reduction in the price	Keep the item and claim the difference resulting from the defect
Accept the alternative	The seller can avoid return or compensation by providing a similar non-defective alternative

New Law Update 2025:The third option (Accept the alternative) is newly introduced in the new Civil Transactions Law, as the old law limited the buyer's option to return or accept the stated price without claiming a reduction.

Fourth: Special provisions regarding the guarantee of hidden defects

If the buyer causes a new defect

According to Article (501), if a new defect occurs in the item with the buyer, he cannot return it based on the old hidden defect, but he can only claim a reduction in the price — unless the seller agrees to take it with its new defect. If the new defect is removed, the buyer regains the right to return.

Guarantee of the item's suitability for use

According to Article (502), if the seller guarantees the item's suitability for use for a specified period and a defect appears during that time, the buyer must notify the seller of this defect within a month from the date of its appearance. If the seller does not fix the defect, the buyer has the right to request the termination of the contract and compensation or to retain the item and claim for damages.

Purchasing multiple items in a single transaction

According to Article (503), if a defect appears in some of them before delivery, the buyer has the option to accept them at the specified price or to return them all. If the defect appears after delivery and there is no harm in separating them, he can return the defective item for its share of the price only.

Fifth: The duration for hearing claims for hidden defect warranty in sales

Article (510): Claims for defect warranty shall not be heard after the passage of time ofone yearfrom the day following the receipt of the sold item, unless the seller has committed to a longer warranty period. The seller cannot rely on this period if it is proven that the concealment of the defect was done with fraud.

Sixth: Warranty for hidden defects in construction and contracting contracts

The warranty system for defects in contracting contracts differs fundamentally from that in sales, as the law imposes strict responsibility on the contractor and the engineer in construction projects.

Article (821) — Ten-year warranty

If the subject of the contracting contract is the construction of buildings or other fixed installations designed by the engineer to be executed by the contractor under his supervision, they are jointly responsible for any occurrence within10 yearsof total or partial collapse of what they have constructed, even if the collapse results from a defect in the land on which it was built or if the employer has approved its construction despite its defects.

The ten-year warranty includes any defects in the buildings and installations that threaten the stability and safety of the structure.

The engineer's individual responsibility (Article 822)

The role of the engineer	The scope of his responsibility
Only the design	Responsible for defects related to the design and construction he provided, excluding execution defects
Supervision of execution only	Jointly responsible with the contractor for execution defects occurring under his supervision

Ruling on the invalidity of exemption from warranty:According to Article (823), any clause intended to exempt the engineer or contractor from warranty or limit it shall be void — and it is not permissible to agree on a warranty period of less than 10 years.

Seventh: The duration for hearing warranty claims in contracting

Article (824): The warranty claim shall not be heard after the expiration of3 yearsfrom the occurrence of the collapse or the discovery of the defect — and the duration of the ten-year warranty begins from the time the employer receives the building.

Type of contract	Duration of warranty	Statute of limitations
Sale contract — latent defect	One year from receipt (subject to agreement for a longer period)	One year from receipt of the sold item
Contract for construction — buildings and facilities	10 years from the receipt by the employer	3 years from the appearance of the defect or collapse

Important legal tips

Document the defect immediately upon discovery:Photography and documented technical reports are essential for any warranty claim.
Notify the seller or contractor immediately:Delaying notification may forfeit some of your rights or weaken your legal position.
Keep the purchase or contract document:It specifies the agreed warranty scope and the stipulated durations.
Do not act on the defective sold item as an owner:This may forfeit your right to return under Article (498).
Review the statute of limitations before filing a lawsuit:One year in sales, and three years in contracts from the appearance of the defect.

The role of the lawyer in latent defect warranty claims

Assess whether the defect meets the legal criteria for a latent defect.
Determine the most suitable option for the client: return, compensation, or claim for a price reduction.
Prepare requests for appointing technical experts to prove the defect and determine its value.
Represent the client before the courts in lawsuits for rescission of sale or compensation.
Follow up on warranty claims against the contractor and engineer in construction projects.

Frequently Asked Questions

Does the seller guarantee the defect even if they were unaware of it?

Yes. The law is explicit that the seller guarantees the latent defect that diminishes the value or utility of the sold item even if they were unaware of its existence — which distinguishes warranty for defects from fraudulent liability.

Can the seller be exempted from guaranteeing the defect by agreement?

Yes, in general, but the exemption clause is void if it is proven that the seller intentionally concealed the defect fraudulently or if the buyer was in a situation that prevented them from discovering the defect.

What's new in the 2025 law regarding buyer options?

The new law added a third option: retaining the sold item and demanding from the seller the amount reduced by the defect from the price — instead of being limited to returning or accepting the sold item at its stated price as was the case in the old law. It also gave the seller the right to provide a similar alternative to avoid return or compensation.

Is it permissible to agree on a contractor's warranty of less than 10 years?

No. The law explicitly nullifies any clause intended to exempt the engineer or contractor from warranty or limit it, including agreements for a duration of less than 10 years for buildings and fixed installations.

Who bears the warranty for building defects if responsibilities are multiple?

The contractor and the engineer are jointly responsible for building defects for 10 years, meaning that the employer can demand full compensation from either of them and then seek reimbursement from the other based on their share of responsibility.

Summary

A hidden defect is an old, non-apparent defect that can only be revealed by an expert or experience.
The seller guarantees the defect even if they were unaware of it, and the warranty is void in specific cases.
The new 2025 law added a third option for the buyer: retaining the sold item while demanding a reduction in price.
The statute of limitations for a warranty claim for defects in sale is one year from delivery.
The contractor and the engineer are jointly responsible for building defects for 10 years.
The statute of limitations for a contractor's warranty claim is 3 years from the appearance of the defect or collapse.

Legal Disclaimer:This article is for informational and educational purposes only and does not constitute legal advice. Each case has its own circumstances that may affect the legal classification and the resulting implications.

Have you discovered a hidden defect in a sale or establishment?

Whether you are a buyer seeking warranty, a seller facing a claim, or an employer suffering from structural defects, the teamof Awad Al-Muhairi Law Firm and Legal Consultationsis fully prepared to assist you.