Caveat Venditor: Sellers, Know Your Obligations! An Updated Guide to the UAE Consumer Protection Law
Corporate & Commercial (Regulatory) / UAE
The issuance of the ER of the CPL represent a milestone in the strengthening of the consumer protection framework in the UAE by enhancing compliance of the local legislation in line with international best practices.
Law Update: Issue 363 - Energy, Utilities, Mining and COP28
Andrea Tithecott Partner, Corporate Commercial
Clive DSouzaParalegal,Corporate Commercial
Three years since the issuance of the UAE Federal Law No. 15 of 2020 (the “UAE Consumer Protection Law”), the UAE Cabinet has now issued the Cabinet Resolution No. 66 of 2023 (the “Executive Regulations”).
The issuance of the Executive Regulations (“ER”) provide clarity to several provisions of the UAE Consumer Protection Law that all manufacturers, distributors, retailers, suppliers and importers registered in the UAE (collectively termed as “Providers”) need to be aware of while selling products or services to their customers or clients.
In light of the issuance of the ER, we seek to provide you with an updated guide of the key provisions of the UAE Consumer Protection Law (“CPL”) that all Providers would need to keep in mind in order to avoid potential breaches, which are as follows:
As per the CPL, all Providers are obligated to ensure that their products contain labelling that clearly and legibly display all essential information as per the locally issued laws, technical specifications or guidelines regarding a specific product.
The newly issued ER of the CPL, now provides further clarity and lays out the minimum on-label information that products must contain in addition to local technical specifications and product specific legislation, which include:
Name of the producer and importer, trade name, address and trademark;
The type and nature of the commodity;
The quantity of the commodity contained in package;
Country of origin and export;
Production and expiry dates;
Conditions of storage and methods of use;
Warnings of the dangers of use, especially, if the use of the product is dangerous for use by young children, infants, people of determination or the elderly, in a clear and easy to read font;
Label of conformity with local standard specifications for the type of product.
It is to be noted that in accordance with Article 40 of the ER, the above requirements will also apply to e-commerce service providers registered in the UAE for the display of products on sale on their websites. Ideally, all of the above information will have to be provided in the product description on the website.
As per the CPL, all Providers are obligated to ensure that the prices of commodities are clearly provided on a card placed next to where the product is placed or at a location where the service is provided, in a manner that is not misleading, in Arabic and in any other language as per the Providers discretion.
In addition to the obligations provided within the CPL above, the ER stipulates further obligations on providers with regard to clearly and expressly indicating when a discount is being provided and to ensure that no additional amount is added to the value of goods and services in cases where the customer makes the transactions online as opposed to the physical store.
As per the CPL, all Providers are obligated to honour the warranty as agreed upon with the consumer, by replacing the commodity or returning its cash value or by providing the required spare parts or maintenance at their own cost in case a product sold to the consumer has defects.
The ER obligates all Providers to give the consumer a warranty related document that contains all relevant information with regard to the warranty, either through the invoice or separately from the invoice, which must contain the minimum of the following information:
Name of the provider;
Date of purchase;
Duration of Warranty;
Name, Model, Serial Number;
Indication if the warranty includes all parts of the good and price of repair and replacement;
Consumer’s obligation under the terms of warranty;
Exceptions to warranty, if any.
The ER provides clarity with regard to what actions the consumer is entitled to in case a provider fails to fulfil their warranty obligations, which are as follows:
Refund of the full price of the product / service or the provision of a replacement product of equal value;
Refund of part of the price to the extent that compensates the customer fully for the lack of service provided;
Re-performance of a service by a provider in the correct manner and in the contracted form.
Further, the ER also obliges all Providers to clearly warn the consumer of all possible damages that may occur as a result of the provided service or product, precautions to be taken and the means of treatment from any resulting damage as a result of the use of a particular product or service.
The above consumer entitlements may also apply outside of the warranty period if the same flaw or defect occurs three times (3) during the first year of the consumer’s purchase of the product.
It is also to be noted that the ER does not provide for a minimum statutory warranty period, this will be clear to us upon a resolution to be issued by the UAE Ministry of Economy (“MOE”)
As per the CPL, in case of a defect of a product, that is potentially greviously harmful to a consumer’s health and safety, there is an obligation on the provider to immediately notify the MOE’s Consumer Protection Department (“MOE-CPD”) and withdraw all such products from the market physically and from online platforms where the product is being sold.
The ER requires that the notification be made within 24 hours in case of defective products that may immediately greviously impact consumer safety or within a period of 7 days if less grievous in nature.
The notification to the MOE – CPD is to be made expressly directly by the Provider or through their legal representative in the manner prescribed within Article 21 of the ER.
The ER mandates that consumers of such products should also be notified by the MOE – CPD in coordination with the Provider and their legal representative by means of an announcement in atleast two daily local newspapers and on all websites or social media handles of the Provider and of the MOE-CPD, within a period of 24 hours of discovering the defect.
The ER provides for the format of the announcement and the information that it must contain, which include the following:
Details of the Provider;
Details of the product;
Number of such products sold in the market;
Description of the defect;
Instructions that the consumer needs to follow to avoid damages;
Instructions to repair, replace or recover the value of the goods.
Once the notification is complete, the ER then stipulates that the Providers must furnish a report regarding the recovery of the goods within 30 days of the start of the recovery process. The recovery report must include the following:
The quantity of recovered defective products;
The number of total repairs, replacements or refunds provided;
A list of all the owners of the recovered products (in case of vehicles – all chassis numbers of all recovered vehicles);
A list of unreachable owners;
Actions taken to correct the defect.
The recovery report file can only be closed by the Provider if the MOE – CPD gives permission to do so, as per the circumstances of each case.
In accordance with the CPL, all Providers are prohibited from describing a commodity or a service in a manner containing false data or from advertising a product in a ‘misleading’ way.
The ER provides clarity as to the circumstances in which advertising may be considered to be misleading and defines it as ‘statements that may lead, directly or indirectly, to creating an unreal or deceptive impression on the consumer’, especially with regard to the following circumstances:
The nature, composition, characterestics, elements, quantity, shape or appearance;
Production and expiration dates;
Conditions and precautions of use, weight, measurement;
Country of origin, export, entity producing good;
Contract terms, after sales service, warranty prices;
Conformity labels, quality marks;
Trademarks, data or logos
In accordance with the CPL, the Provider is prohibited from promoting commodities or services or from making general discounts to the prices or from advertising them in any way, until they obtain a prior license from the local authorities regulating commercial trade, such as the Dubai Economy and Tourism or the Abu Dhabi Department of Economic Development.
In addition to the above obligation, the ER now adds an additional obligation on Providers to inform consumers of an upcoming discount within a week from the date of the consumers purchase.
In case Providers violate this additional obligation, consumers will have the right to recover the price difference within 30 days from the date of purchase.
In accordance with the CPL, all Providers are obliged to not exercise monopolistic or anti-competitive trade practices or agreements. The ER has provided us with further clarity with regard to the types of agreements and circumstances that would be considered to be monopolistic in nature (subject also to the provisions of Federal Law No. 4 of 2012 regarding Competition), and prohibit Providers from the following actions, such as:
Selling goods or services at prices below cost with the intention of monopolizing the market;
Collusion amongst Providers with the intention of, explicitly or implicitly, fixing, reducing or raising the price, in a way that harms the national economy;
Competing Providers agreeing to divide the market according to geographical distribution or sales volume;
The purchasing of all competing goods or services from the market for the purpose of controlling prices, etc
In accordance with the CPL, all Providers are prohibited from including any term upon contracting with the consumer that would cause the consumer harm.
The ER has now provided clarity with regard to the type of circumstances that would considered as being a ‘harmful’ term when contracting with the consumer, some of such terms are as follows:
Provider giving itself the right to unilaterally terminate or amend contract clauses without referring to the consumer;
Provider cancelling the right of the consumer to claim compensation when the provider breaches its obligations;
Provider giving itself the right to change the characterestics of the goods or the terms of the consumer use in case of subscription contracts (without notifying the consumer);
Waiver of any rights provided to the consumer as per the CPL or the ER
Provider putting the phrase “goods sold are neither returned nor exchanged”, except for when the goods, who by its nature, characteristics, or method of packaging precludes it from being replaced or returned or if the goods are rapidly perishable etc;
Not refunding the price of the goods or service to the consumer;
Obliging the consumer to deal with specific financing or insurance companies;
Setting conditions for the need to carry out maintenance or repair outside the agency for a certain period of time, and not to perform any maintenance or repair outside the agency.
In conclusion, the issuance of the ER of the CPL represent a milestone in the strengthening of the consumer protection framework in the UAE by enhancing local legislation in line with international best practice.
Overall, the CPL and the ER create a balance with regard to the contractual relationship between the consumer and the supplier and identifies all obligations to protect the consumer from receiving defective goods or services by providing comprehensive solutions to enhance consumer safety and satisfaction.
We will, ofcourse, keep you up to date with regard to further developments, such as the issuance of complementing decisions, resolutions or amendments.
For further information,please contact Andrea Tithecott and Clive D’Souza.
Published in November 2023
