Civil Law And UAE Misrepresentation Remedies

1. Introduction

Under UAE civil law, misrepresentation (deceit) is a defect in contractual consent. It occurs where one contracting party uses fraudulent words, conduct, or deliberate silence to cause the other party to agree to a contract that the latter would otherwise not have accepted.

A key distinction is important: misrepresentation is not merely an inaccurate statement. UAE jurisprudence generally requires fraudulent or deceptive conduct, causation/inducement, and—where cancellation is sought under the traditional Civil Code framework—gross unfairness (“gross cheat”).

The UAE Civil Transactions Law was substantially replaced by the new Federal Decree-Law No. 25 of 2025, effective 1 June 2026. Accordingly, older Civil Code authorities should be treated as historical jurisprudence where their provisions correspond to the new law. The cases discussed below are particularly useful for understanding the established UAE principles and their continuing relevance.

2. Meaning of Misrepresentation

Misrepresentation involves a party being induced to contract through a false or misleading representation.

Under the established UAE Civil Code formulation:

• Article 185 defined misrepresentation as deception by trickery in words or conduct that causes the other party to consent to something that it otherwise would not have accepted.
• Article 186 dealt with deliberate silence.
• Article 187 allowed cancellation where misrepresentation was accompanied by gross cheating.
• Article 188 explained gross cheating by reference to a bargain that an ordinary person familiar with the market would not regard as reasonable.
• Article 190 dealt with misrepresentation by a third person where the other contracting party knew of it.

These provisions have been expressly considered by recent DIFC appellate decisions applying UAE law.

3. Elements of Misrepresentation

A claimant normally needs to establish several connected elements.

A. Representation or deceptive conduct

There must be some representation through:

• words;
• documents;
• conduct;
• concealment; or
• deliberate silence where disclosure was required.

A mere commercial mistake is not automatically misrepresentation.

B. Falsity

The representation must materially depart from reality.

Examples:

• falsely stating that a property has a particular area;
• falsely stating that a company owns an asset;
• concealing a material defect;
• falsely stating that regulatory approval exists;
• falsely representing financial information.

C. Intention to mislead

UAE case law distinguishes an innocent mistake from deceit.

The Dubai Court of Cassation has described fraud as having:

1. a material element—conduct capable of creating or reinforcing a false picture; and
2. a moral element—the intention to mislead for an unlawful purpose. 

D. Reliance and inducement

The deception must affect the victim's decision to contract.

The question is essentially:

Would the party have entered the contract, or agreed to the relevant terms, if the truth had been known?

E. Gross cheat for cancellation under the traditional Article 187 framework

The UAE jurisprudence traditionally required both:

misrepresentation + gross unfairness/cheat

for cancellation under Article 187.

The Dubai Court of Cassation has stated that the seriousness of the deception is assessed in light of the circumstances and characteristics of the deceived party, including experience and the circumstances surrounding the transaction.

4. Deliberate Silence as Misrepresentation

Misrepresentation does not necessarily require an express lie.

Deliberate silence may constitute misrepresentation where:

• the concealed fact is material;
• the party knew the fact;
• the other party did not know it;
• disclosure was material to the decision to contract; and
• the other party would not have entered the contract had it known the truth.

This principle is particularly important in:

• real-estate transactions;
• M&A;
• corporate transactions;
• financing;
• insurance;
• construction;
• commercial sales.

The traditional Article 186 expressly recognised deliberate silence in these circumstances.

5. Main Remedies for Misrepresentation

A. Cancellation of the Contract

The principal remedy is cancellation/avoidance where the statutory requirements are satisfied.

The purpose is to release the deceived party from a contract produced by defective consent.

For example:

A seller falsely represents that a commercial property generates AED 2 million annually. The buyer purchases it because of that representation. The actual income is AED 500,000. If the requirements of UAE law are established, the buyer may seek cancellation and associated relief.

6. Restitution

Once a contract is cancelled, the parties may have to restore what they received.

This can include:

• return of purchase money;
• return of property;
• restoration of possession;
• reversal of transferred rights;
• accounting for benefits received.

The objective is generally to return the parties, as far as legally possible, to their pre-contract position.

7. Damages

A party suffering loss because of misrepresentation may also pursue compensation where the applicable legal requirements are satisfied.

Potential losses may include:

• amounts paid because of the deception;
• transaction expenses;
• consequential financial loss;
• costs directly caused by reliance;
• other legally recoverable losses.

However, proof of loss and causation remains important. Cancellation and damages are conceptually distinct remedies.

8. Compensation for Consequential Loss

Suppose a company purchases machinery after being falsely told that the machinery has a particular production capacity.

If the representation is proved and the company suffers additional losses directly attributable to the deception, it may seek compensation for legally recoverable consequential losses.

The claimant must nevertheless establish:

misrepresentation → reliance → causation → actual legally recoverable loss.

9. Cancellation Plus Damages

The remedies are not necessarily mutually exclusive.

A claimant may, depending on the applicable law and facts, seek:

Cancellation + restitution + damages

For example:

1. cancel the agreement;
2. recover the purchase price;
3. recover provable transaction losses.

The precise availability and measure of damages depends upon the governing statutory regime and facts.

10. Misrepresentation by a Third Person

A particularly important UAE rule concerns deception by someone who is not technically a contracting party.

Under the former Article 190 framework, cancellation could be available where:

• a third person made the misrepresentation; and
• the contracting party knew about it.

The issue can arise in:

• brokers' statements;
• agents' representations;
• M&A advisers;
• financial intermediaries;
• real-estate agents;
• corporate representatives.

The recent DIFC Court of Appeal decision in Al Mheiri v Cameron examined this issue extensively under UAE law.

11. Six Important Case Laws

Case 1 — Dubai Court of Cassation No. 270 of 2023

This case is important for explaining the fraudulent element of misrepresentation.

The Dubai Court of Cassation stated that fraud contains:

• a tangible/material element; and
• an intangible element consisting of the intention to mislead for an illegitimate purpose.

It further explained that the seriousness of the fraudulent means and its effect on the victim are relevant to cancellation under Article 187.

Principle

Fraud requires more than an objectively inaccurate statement; the intention to mislead is significant.

Case 2 — Dubai Court of Cassation No. 231 of 2020

This authority is particularly useful concerning deliberate concealment.

The Court explained that deceit capable of vitiating consent may arise through:

• fraudulent words;
• fraudulent acts; or
• deliberate silence concerning a fact or circumstance that would have caused the other party not to enter the contract.

The Court also emphasised that the fraudulent means must have sufficient gravity to affect the victim's decision.

Principle

Concealment can constitute misrepresentation where the concealed fact is material and legally relevant to consent.

Case 3 — Dubai Court of Cassation No. 30 of 2024

The Court considered the relationship between deceit and gross unfairness.

It indicated that:

• mere deceit is insufficient for cancellation under Article 187;
• gross unfairness by itself is also insufficient;
• both must be established where Article 187 is relied upon.

The Court also placed the burden of establishing the necessary elements on the party alleging deceit.

Principle

Under the traditional Article 187 approach, cancellation requires proof of both deception and gross cheating.

Case 4 — Ras Al Khaimah Court of Cassation No. 48 of 2025

This decision provides a useful explanation of gross unfairness.

The Court considered that gross unfairness involves a serious imbalance in the transaction, assessed according to the circumstances of the transaction and prevailing commercial standards.

It also emphasised that the claimant must establish both:

• deceit; and
• gross unfairness.

Principle

A simple bad bargain does not automatically become actionable misrepresentation.

Case 5 — Salem Dwela v Damac Park Towers Company Limited [2020] DIFC CA 009

This is an important UAE/DIFC comparative authority concerning misrepresentation remedies.

The DIFC Court of Appeal held that an arguable misrepresentation claim could potentially support:

• rescission;
• restitution; and
• damages.

The Court explained that DIFC law differs from English law in important respects, particularly concerning the relationship between loss and rescission.

Principle

Where misrepresentation induces a transaction, cancellation/rescission and monetary relief can potentially operate together, subject to the applicable legal requirements.

Case 6 — Salem Dwela v Damac Park Towers Company Limited [2021] DIFC CFI 083

At trial, the claimant alleged that he had been misled concerning matters including:

• development readiness;
• completion timing;
• unit size; and
• view from the property.

The Court ultimately dismissed the misrepresentation claim on the facts.

Nevertheless, the judgment provides an important explanation of remedies. It recognised that damages may compensate pecuniary and non-pecuniary loss and that the DIFC Court could, in an appropriate case, order rescission and restitution.

Principle

A claimant must prove the actual misrepresentation and its legal consequences; merely alleging that representations were made is insufficient.

Case 7 — Amjad Hafeez v Damac Park Towers Company Limited [2014] DIFC CFI 002

The claimant alleged misrepresentation and deceit concerning differences between the apartment constructed and the plans forming part of the contractual arrangements.

The Court found the pleadings inadequate and required amendment rather than allowing the claim to proceed in its original form.

Principle

Misrepresentation claims must be specifically pleaded with sufficient particulars of the representations, their falsity and their effect.

Case 8 — Khaled Salem Musabeh Humad Al Mheiri v John Cameron [2025] DIFC CA 008

This is a particularly significant recent authority applying UAE law.

The dispute concerned an indemnity agreement allegedly entered into following false representations.

The DIFC Court of Appeal, in its judgment dated 1 September 2026, allowed the appeal in part and remitted the case for retrial concerning whether the agreement could be set aside for deceit and/or mistake.

The Court discussed Articles 185, 186, 187 and 190 of the UAE Civil Code and reviewed UAE authorities including Dubai Court of Cassation decisions 270/2023, 231/2020 and 30/2024 and Ras Al Khaimah Court of Cassation No. 48/2025.

Principle

A UAE-law misrepresentation claim must identify the specific deceptive conduct, its effect on consent, and the legal reasoning connecting the facts to the statutory remedy.

Importantly, the Court ordered a retrial rather than finally determining the underlying UAE-law deceit issue.

12. Case-Law Revision Table

Note: The DIFC cases are useful UAE jurisprudential/comparative authorities but should not be treated as automatically binding precedent on mainland UAE courts.

13. Misrepresentation vs Ordinary Breach of Contract

These concepts should be distinguished.

Misrepresentation

The false statement or concealment induces the formation of the contract.

Breach of contract

The party makes a valid contractual commitment but subsequently fails to perform it.

Example

A seller says before signing:

“The property has 10,000 square feet.”

If that statement induces the buyer to purchase, it may raise a misrepresentation issue.

If the contract itself states 10,000 square feet and the seller later delivers only 8,000 square feet, the principal issue may instead be breach of contract.

The same facts can sometimes generate both causes of action, but their legal foundations differ.

14. Misrepresentation vs Mistake

Misrepresentation involves deception by another party.

Mistake involves an incorrect understanding by the contracting party.

They may overlap.

For example:

A buyer mistakenly believes a property has a particular characteristic because the seller deliberately gave false information.

The buyer may potentially have arguments based upon both deceit/misrepresentation and mistake, depending upon the applicable provisions and evidence.

The recent Al Mheiri v Cameron appeal expressly remitted the dispute for consideration of both deceit and mistake.

15. Burden of Proof

The party alleging misrepresentation generally has to prove the necessary elements.

This includes establishing, as appropriate:

1. what was said or concealed;
2. why it was false or misleading;
3. who made the statement;
4. the intention or deceptive character;
5. reliance;
6. inducement;
7. the seriousness of the deception;
8. gross unfairness where required for cancellation;
9. resulting loss.

The UAE courts' approach emphasises the factual circumstances of the individual transaction rather than automatically treating every inaccurate commercial statement as fraud.

16. Practical Examples

Example 1 — Real Estate

A developer represents that an apartment is 2,000 sq. ft. when it is actually 1,400 sq. ft.

Possible issues:

• misrepresentation;
• defective consent;
• cancellation;
• restitution;
• damages.

Example 2 — Business Acquisition

A seller deliberately hides substantial undisclosed liabilities before the buyer acquires a company.

Potential remedies may include:

• cancellation/avoidance where statutory requirements are met;
• restitution;
• damages;
• contractual indemnity;
• other available corporate remedies.

Example 3 — Deliberate Silence

A seller knows that a property is subject to a material restriction and deliberately conceals it.

If the buyer would not have contracted had the restriction been disclosed, deliberate silence may become relevant to a misrepresentation claim.

Example 4 — Agent's False Statement

A broker makes a false statement concerning a transaction.

The legal result may depend upon:

• whether the broker was acting for a contracting party;
• whether the principal authorised the representation;
• whether the principal knew of the deception;
• the applicable agency rules.

The recent Al Mheiri v Cameron litigation demonstrates that attribution of an agent's representation can itself become a substantial UAE-law issue.

17. Defences to Misrepresentation

A defendant may challenge:

1. Falsity

The statement was actually true.

2. Materiality

The statement did not materially influence the contract.

3. Reliance

The claimant did not rely upon the statement.

4. Causation

The alleged deception did not cause the claimed loss.

5. Knowledge

The claimant already knew the true facts.

6. Verification

Depending on the circumstances, the claimant could independently verify the information. UAE jurisprudence has considered this factor when assessing whether alleged deception actually vitiated consent.

7. Absence of gross cheat

Under the traditional Article 187 framework, the defendant may argue that the necessary gross unfairness was not established.

18. Importance in Commercial Transactions

Misrepresentation remedies are particularly important in:

• mergers and acquisitions;
• real-estate transactions;
• shareholder agreements;
• financing;
• guarantees;
• construction contracts;
• franchise agreements;
• insurance;
• sale of businesses;
• commercial agency;
• investment transactions.

Modern contracts therefore frequently contain:

• representations and warranties;
• disclosure schedules;
• indemnities;
• entire-agreement clauses;
• limitation of liability clauses;
• fraud carve-outs;
• due-diligence provisions.

These contractual provisions can significantly affect the litigation analysis.

19. Key Legal Formula

For examination purposes, remember:

Misrepresentation

→ False/deceptive representation
→ Fraudulent conduct or qualifying silence
→ Reliance
→ Inducement
→ Defective consent
→ Gross cheat where required for cancellation
→ Cancellation/avoidance
→ Restitution
→ Damages where legally recoverable

20. Important Distinction: Misrepresentation Does Not Automatically Mean Cancellation

This is one of the most important points.

A claimant cannot simply show:

“The statement was false.”

The court may need to examine:

• whether it was actually a representation;
• whether it was false;
• whether the defendant intended to mislead;
• whether the claimant relied on it;
• whether it caused consent;
• whether the statutory requirements for cancellation were satisfied;
• whether gross unfairness existed where the applicable law requires it;
• whether restitution remains possible;
• whether limitation or other procedural restrictions apply.

The UAE authorities repeatedly emphasise this fact-sensitive approach.

21. Effect of the 2026 Civil Transactions Law

Because the UAE's new Civil Transactions Law became effective on 1 June 2026, current legal analysis should not simply treat the former Federal Law No. 5 of 1985 as the governing law for new transactions.

However, older Article 185–190 jurisprudence remains highly useful for understanding the UAE's established doctrine of defective consent and deceit, particularly where the new legislation preserves corresponding concepts.

For litigation involving a particular contract, therefore, the analysis should begin with:

1. date of the contract;
2. applicable transitional provisions;
3. applicable provisions of the 2026 Civil Transactions Law;
4. any special legislation;
5. contractual governing-law clause;
6. forum/jurisdiction;
7. relevant UAE case law.

22. Conclusion

Misrepresentation remedies under UAE civil law are designed to protect genuine contractual consent. The central remedy may be cancellation/avoidance of a contract where the statutory requirements are established, accompanied where appropriate by restitution and compensation.

The established UAE jurisprudence particularly emphasises:

• deception or trickery;
• intention to mislead;
• inducement of consent;
• materiality;
• deliberate concealment;
• gross unfairness where required for cancellation;
• proof of causation and loss; and
• proper attribution where an agent or third party makes the representation.

The recent Al Mheiri v Cameron judgment is especially useful because it brings together several Dubai and Ras Al Khaimah Cassation authorities and demonstrates how UAE courts' principles concerning deceit and defective consent continue to be analysed in modern commercial disputes.

Quick Revision Points

1. Misrepresentation concerns defective contractual consent.
2. It can arise through words, conduct or deliberate silence.
3. Mere inaccuracy is not automatically fraud.
4. Intention to mislead is an important element of deceit.
5. Reliance and inducement must generally be established.
6. Under the traditional Article 187 framework, misrepresentation + gross cheat was required for cancellation.
7. Cancellation can lead to restitution.
8. Damages may be available for legally established loss.
9. Third-party representations may create special attribution issues.
10. The 2026 Civil Transactions Law must now be considered for current mainland UAE transactions.