AED 344,000 earnest money forfeiture upheld after buyers’ withdrawal

Saurabh (Plaintiff) vs. Ismail & Alya (Defendants)

Outcome

The Court ordered the Defendants to pay the Plaintiff AED 344,000 plus 5% legal interest, court fees, and attorney fees — and dismissed the Defendants’ counterclaim entirely.

Granted to the Plaintiff

Rejected

Full legal breakdown

The specific UAE articles the court relied on, and how each one applied to this case.

Article 148/2 — Down Payments / Earnest Money (Civil Transactions Law)

Where parties agree that a down payment serves as a penalty for backing out, the paying party forfeits it if they withdraw.

Application:

Combined with Clause 11 of the sale agreement, the Defendants' unlawful withdrawal triggered forfeiture of the AED 344,000 down payment.

Contractual thresholds — Clauses 6, 7, 9 & 11 of the Additional Conditions

The agreement allowed the buyers to withdraw without penalty only if a bank valuation fell short by more than 10% of the purchase price.

Application:

Mashreq Bank's valuation (AED 3,200,000) was only 6.9% below the AED 3,440,000 contract price — under the 10% threshold — so the suspensive condition never failed and the contract remained fully binding.

Unilateral negotiations carry no legal weight

Defendant 1 argued the contract had been modified through electronic communication with a bank agent requiring 100% mortgage coverage.

Application:

The Court dismissed this, noting the Plaintiff was never party to, or consented to, those discussions.

This summary reflects the outcome of this specific matter based on its particular facts and evidence. It does not constitute legal advice and does not guarantee a similar outcome in any other case.

Related case studies

Commercial

Interior fit-out claim dismissed in full

Read the full case →

Labour

Employer ordered to pay AED 184,405 after invalid probation extension

Read the full case →

Commercial

AED 466,481.90 advance payment ordered returned after seven months of stalled work

Read the full case →

Facing a similar dispute?

Our team can assess your position and outline the strongest legal path forward.