Doing Business in Abu Dhabi 2021
Enforcing Contracts Questionnaire
1.Case Study Assumptions
Two domestic companies - Seller and Buyer - conclude a contract for the sale of some custom-made goods. Further to such contract, Seller agrees to sell to Buyer, and Buyer agrees to buy from Seller, custom-made furniture. Upon delivery of the goods, Buyer alleges that the goods are of inadequate quality, and refuses to pay. Seller insists that the goods are of adequate quality and demands payment of the contract price. Since the goods were custom-made for Buyer, Seller cannot sell them to a third party. Following Buyer's refusal to pay, Seller sues Buyer. The court decides 100% in favor of Seller, and orders Buyer to pay the contract price.
- Both Seller and Buyer are domestic companies, located in Abu Dhabi.
- Seller sues Buyer to recover the amount due under the contract. The value of the claim is: AED 317,386.
- The court deciding the case is located in Abu Dhabi and is the first instance court with jurisdiction over commercial claims of AED 317,386.
- Seller fears that Buyer may dissipate assets, move assets out of the jurisdiction or become insolvent. Therefore, if such a procedure is allowed before the competent court, Seller requests and obtains attachment of Buyer’s movable assets (for example, office equipment or vehicles) prior to obtaining a judgment.
Buyer opposes the claim, which is then disputed on the merits. An opinion on the quality of the goods delivered by Seller is required and is given by an expert during the court proceedings:
- If it is standard practice in your country for Seller and Buyer to call their own expert witnesses, then each party calls one expert witness to provide an opinion on the quality of the goods delivered by Seller.
- If it is standard practice in your country for the judge to appoint an independent expert to provide an opinion on the quality of the goods delivered by Seller, then the judge does so. It is assumed that no opposing expert testimony is provided.
- Judgment is 100% in favor of Seller. Buyer is required to pay the agreed contract price to Seller.
- Buyer does not appeal the judgment.
- Seller starts enforcing the judgment when the period allocated by law for appeal expires. It is assumed that Buyer has no money in his bank accounts but has sufficient movable assets to fulfill the full debt. As a result, Buyer's movable assets (for example, office equipment or vehicles) are attached and stored in preparation for a public sale.
- A public sale is organized, advertised and held to sell Buyer's movable assets. The assets are sold and the value of the claim is entirely recovered by Seller.
Definitions: for the purpose of this questionnaire, the terms below carry the following meaning:
- Competent court means the court in Abu Dhabi with jurisdiction over commercial disputes similar to the one described in the assumptions of the case. If more than one court is competent, competent court means the court that is most likely to determine the outcome of the standardized case.
- Expert witness means a witness with the required qualifications or experience to give an opinion on whether the goods delivered are of adequate quality. Expert opinion is required and provided prior to judgment.
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