Civil Law and UAE: Unfair Commercial Practices

1. Meaning

Unfair commercial practices are business practices that improperly affect the interests or decision-making of customers, competitors, suppliers, or other market participants.

They may include:

misleading advertising;

false or deceptive representations;

concealment of material information;

unfair contractual practices;

aggressive sales techniques;

bait-and-switch practices;

misleading pricing;

false claims about products or services;

deceptive comparisons with competitors;

misuse of confidential information;

unfair exploitation of consumers.

In UAE civil litigation, “unfair commercial practice” is usually not one single cause of action. Depending on the facts, the claim may arise under consumer-protection law, civil-law principles, commercial legislation, competition law, intellectual-property law, contract law, or tort/delict principles.

2. Main UAE Legal Framework

A. UAE Civil Transactions Law

The current UAE Civil Transactions Law is Federal Decree-Law No. 25 of 2025, effective from 1 June 2026.

It provides the general civil framework for:

contractual obligations;

good faith;

harmful acts;

causation;

compensation;

invalidity and related contractual remedies.

Older cases may refer to the former Federal Law No. 5 of 1985 Civil Transactions Law. Such cases should be treated as historical authorities where their article numbers have changed.

3. Consumer Protection Law

The principal federal legislation is Federal Law No. 15 of 2020 on Consumer Protection, together with its implementing regulations.

The framework addresses matters including:

consumer rights;

product and service information;

misleading advertising;

defective products;

guarantees;

contractual information;

protection against practices harmful to consumers.

A commercial practice may therefore generate both:

regulatory consequences

and

civil consequences, depending upon the particular violation and applicable legal provisions.

4. Competition Law

The UAE competition framework can become relevant where the conduct affects competition rather than merely an individual consumer.

Important areas include:

abuse of dominant position;

restrictive agreements;

exclusionary conduct;

unfair market practices;

anti-competitive arrangements.

The principal federal legislation is Federal Decree-Law No. 36 of 2023 Regulating Competition.

Thus:

Consumer unfairness ≠ automatically competition-law infringement.

A practice affecting one customer may be a consumer/contract claim without constituting an antitrust violation.

5. What Are Unfair Commercial Practices?

A. Misleading Representation

Examples:

falsely claiming a product is “100% genuine”;

claiming a service has a certification that it does not possess;

falsely representing the quality or origin of goods;

claiming guaranteed financial returns without adequate basis.

B. Misleading Omission

A business may create a misleading impression by concealing material information.

For example:

Advertisement says “AED 999”

but significant mandatory charges are revealed only after the customer commits to purchase.

The legal question becomes whether the omitted information was material to the consumer's decision and whether applicable disclosure requirements were breached.

6. Bait-and-Switch Practices

A business advertises an attractive product at a low price but:

has little or no genuine intention to supply it;

refuses to sell it when customers respond;

directs customers toward a more expensive product.

This may raise issues under consumer-protection and unfair-trading rules.

7. False Comparative Advertising

A business may claim:

“Our product is twice as effective as Competitor X.”

If the statement is objectively false or incapable of proper substantiation, it may create liability under applicable advertising, consumer-protection, unfair-competition or intellectual-property rules.

8. Unfair Pricing Practices

Potential issues include:

misleading “discount” claims;

false original prices;

hidden mandatory charges;

deceptive price comparisons;

advertising one price and charging another;

misleading subscription pricing.

The court should distinguish:

high price

from

deceptive pricing practice.

A commercially expensive product is not automatically legally unfair.

9. Unfair Contractual Practices

A commercial contract may contain terms concerning:

cancellation;

automatic renewal;

penalties;

warranties;

limitation of liability;

termination;

unilateral variation;

jurisdiction.

Whether a term is legally unfair depends upon the applicable law and the type of contract.

In the DIFC, the Implied Terms in Contracts and Unfair Terms Law provides a specific statutory framework for certain contractual terms.

10. Elements of a Civil Claim

A useful formula is:

Commercial Conduct → Legal Duty → Breach → Causation → Damage → Remedy

The claimant should establish:

1. Commercial conduct

What exactly did the business do?

2. Applicable legal rule

Which legal provision makes the conduct unlawful?

3. Breach

How did the defendant violate that rule?

4. Reliance or causal connection

Did the conduct cause the claimant to enter the transaction or suffer loss?

5. Damage

What actual financial or legally compensable damage occurred?

6. Remedy

What relief is legally available?

11. Case Law

Because UAE reported case law specifically labelled “unfair commercial practices” is relatively limited, the following cases include direct UAE/DIFC commercial, consumer, contractual and misrepresentation authorities that are useful for analysing the constituent elements of an unfair-practice claim.

1. Al Khorafi v Bank Sarasin-Alpen (ME) Ltd [2018] DIFC CA 010

Principle: Misrepresentation and commercial conduct

This dispute concerned investment products and allegations concerning:

misrepresentation;

regulatory obligations;

unsuitable financial products;

negligence;

contractual and non-contractual duties.

The DIFC Court of Appeal examined the relationship between alleged regulatory misconduct and civil claims.

Relevance

It demonstrates that an allegedly unfair commercial practice should be translated into a specific legal cause of action, rather than relying merely on the general assertion that commercial conduct was unfair.

12. Al Khorafi v Bank Sarasin-Alpen (ME) Ltd [2009] DIFC CFI 026

Principle: Causation and loss

The claim involved allegations concerning investment advice and representations.

The Court considered whether alleged misconduct had actually caused the losses claimed.

Relevance

The case illustrates an important rule:

Misleading conduct without proven causation and recoverable loss does not automatically produce a damages award.

This principle is highly relevant to commercial-practice claims.

13. Kishanchand Gangaram Bhatia v ICICI Bank Ltd [2014] DIFC CFI 018

Principle: Unfair contractual terms

The claimant relied on the DIFC statutory framework concerning unfair terms.

The Court explained the operation of the reasonableness test and distinguished an unfair-term argument from an independent cause of action.

Relevance

The case is useful where an allegedly unfair commercial practice takes the form of a standard-form contractual term.

The correct analysis is:

Contractual term → applicable statutory framework → reasonableness → enforceability

rather than simply:

Unfair term → automatic invalidity.

14. Kolesnik v Emirates NBD Bank [2024] DIFC SCT 242

Principle: Commercial standard terms

The dispute concerned an asymmetric jurisdiction provision contained in banking terms.

The Court considered:

contractual wording;

reasonableness;

statutory unfair-term provisions;

jurisdiction.

Relevance

It demonstrates that commercial standard terms must be analysed according to the actual contractual language and applicable statutory test.

The mere fact that a term operates strongly in favour of one commercial party does not automatically make it unlawful.

15. Kirtanlal International DMCC v State Bank of India (DIFC Branch) [2022] DIFC CFI 041

Principle: Good faith and express contractual rights

The claimant argued that the bank's exercise of contractual rights was unfair and contrary to good faith.

The DIFC Court emphasised that general good-faith principles cannot ordinarily be used to contradict clear express contractual rights.

Relevance

This is important in commercial-practice disputes because:

Commercial unfairness must be connected to a recognised legal rule.

A court will not necessarily rewrite a negotiated commercial contract simply because one party subsequently considers the result commercially harsh.

16. Oheo Bank v Parker [2025] DIFC CA 006

Principle: Commercial conduct and payment obligations

The case involved allegations including:

deceit;

misrepresentation;

negligence;

breach of banking duties;

payment-related obligations.

The Court examined the scope of the bank's obligations when acting upon customer payment instructions.

Relevance

The case demonstrates that commercial liability depends upon the specific duty, contractual mandate, knowledge and circumstances, rather than a general concept of fairness.

17. Gate MENA DMCC v Tabarak Investment Capital Ltd [2024] DIFC DEC 002

Principle: Digital commercial transactions

This Digital Economy Court case concerned digital assets and financial transactions.

The Court considered contractual payment obligations and duties concerning reasonable care and skill.

Relevance

It is useful for modern unfair-commercial-practice disputes involving:

digital platforms;

cryptocurrency;

electronic payments;

online transactions;

automated commercial systems.

It demonstrates that digital commerce does not eliminate ordinary principles of contract, duty and causation.

18. Comparative Authority: OBG Ltd v Allan [2007] UKHL 21

This English case concerns the economic torts, including interference with contractual relations.

Its broader relevance is that commercial conduct can become legally actionable where a defendant intentionally interferes with another party's legally protected commercial interests.

UAE relevance

It is comparative rather than UAE law and should not be treated as a direct UAE precedent.

19. Comparative Authority: Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd [1989] QB 433

This English case is important for particularly onerous contractual terms.

The court considered whether an unusually burdensome term had been sufficiently brought to the contracting party's attention.

Relevance

It provides comparative reasoning for disputes involving:

standard-form contracts;

unexpected charges;

onerous clauses;

commercial transparency.

Again, it is persuasive comparative authority, not UAE precedent.

20. Case-Law Table

21. Misleading Advertising

A misleading advertisement may contain:

False factual statement

“Made entirely in the UAE.”

when the relevant product was not.

False quality statement

“Certified premium quality.”

without the claimed certification.

False performance statement

“Guaranteed 50% reduction in energy costs.”

without sufficient factual basis.

False scarcity

“Only 2 units left.”

when the statement is deliberately manufactured to induce immediate purchase.

The legal analysis should identify:

statement → falsity/misleading character → materiality → consumer reliance → damage.

22. Commercial Puffery vs Misrepresentation

Not every exaggerated marketing statement is legally actionable.

Puffery

“The world's most amazing coffee.”

This is usually understood as promotional opinion.

Factual representation

“Our coffee contains 30% more caffeine than Brand X.”

This is objectively testable.

Therefore:

Objective factual claims are generally more legally significant than obvious marketing opinion.

23. Unfair Competition

Unfair commercial conduct can also affect competitors.

Examples:

passing off;

imitation causing consumer confusion;

false statements about competitors;

misuse of competitor information;

misleading comparative advertising;

diversion of customers through deceptive conduct.

A competitor's claim may therefore differ substantially from a consumer's claim.

24. Consumer vs Competitor Claims

25. Digital Commercial Practices

Modern UAE commercial disputes increasingly involve:

e-commerce;

online marketplaces;

social-media advertising;

influencer marketing;

algorithmic pricing;

subscription services;

dark patterns;

automated renewals;

digital financial products;

AI-generated advertising.

A digital business does not escape ordinary civil liability simply because the transaction occurred online.

For example:

Online advertisement → Consumer relies → Purchase → Misrepresentation discovered → Financial loss

can be analysed under the same basic civil principles as an offline transaction.

26. Dark Patterns

Dark patterns are interface designs intended to manipulate users into making decisions they might not otherwise make.

Examples:

pre-selected paid upgrades;

difficult cancellation;

hidden subscription renewal;

misleading buttons;

confusing opt-out procedures;

presenting the expensive option as the default;

hiding important costs until the final screen.

The legal analysis should focus on the specific statutory or contractual prohibition, rather than assuming that every manipulative interface is automatically unlawful.

27. Unfair Commercial Practice and Good Faith

Good faith is important in UAE civil law.

However:

Good faith is not a universal licence for courts to invalidate commercially disadvantageous contracts.

The claimant should connect the alleged conduct to:

an express contractual obligation;

an implied obligation;

statutory consumer protection;

misrepresentation;

fraud;

tort/delict;

competition law;

unfair-term legislation;

another recognised legal doctrine.

Kirtanlal is particularly useful for this distinction.

28. Evidence

A claimant should preserve:

Advertising evidence

advertisements;

website screenshots;

social-media posts;

brochures;

product descriptions.

Contract evidence

terms and conditions;

invoices;

purchase agreements;

warranties;

cancellation policies.

Communication evidence

emails;

WhatsApp messages;

customer-service conversations;

recorded calls.

Financial evidence

invoices;

receipts;

bank statements;

loss calculations.

Technical evidence

For digital cases:

website logs;

metadata;

platform records;

transaction logs;

algorithmic records where available.

29. Causation and Damages

A claimant should avoid the weak argument:

“The business acted unfairly, therefore I deserve compensation.”

Instead:

What exactly did the defendant do?

↓

What legal duty did it breach?

↓

What did the claimant do because of it?

↓

What loss directly resulted?

↓

Can that loss legally be recovered?

This is particularly important in misrepresentation and commercial-advice disputes.

30. Possible Remedies

Depending on the cause of action and applicable law, remedies may include:

1. Compensation

For proven economic loss and other legally recoverable damage.

2. Restitution

Return of money or property where legally appropriate.

3. Rescission/avoidance

Potentially available where the transaction was induced by an actionable defect.

4. Injunction

For continuing unlawful commercial conduct where the requirements for injunctive relief are met.

5. Declaration

The court may declare contractual rights or legal status.

6. Regulatory sanctions

Separate regulatory proceedings may result in administrative penalties or other measures.

31. Defences

A business may argue:

the statement was true;

the statement was opinion/puffery;

all material information was disclosed;

the customer did not rely upon the statement;

the customer independently investigated the product;

the contract clearly disclosed the relevant term;

the conduct was contractually authorised;

no statutory prohibition applies;

no causation exists;

no recoverable damage has been proved;

the claim is prescribed/time-barred;

the claimant lacks standing.

32. Important Distinctions

Unfair ≠ Illegal

A commercially harsh practice is not automatically unlawful.

Misleading ≠ Merely Disappointing

A product failing to meet a customer's expectations does not automatically establish misleading conduct.

Contractual Breach ≠ Competition Law Violation

A breach between two companies does not automatically affect competition.

Regulatory Breach ≠ Automatic Civil Damages

Whether a regulatory violation creates a private damages claim depends upon the relevant legislation and legal cause of action.

High Price ≠ Unfair Price

A high price alone does not necessarily establish an unfair commercial practice.

33. Practical Legal Test

Use the following six-stage test:

Stage 1 — Identify the practice

What did the business actually do?

Stage 2 — Identify the affected party

Consumer, competitor, supplier or commercial counterparty?

Stage 3 — Identify the legal rule

Consumer protection, contract, tort, competition, IP or another law?

Stage 4 — Establish breach

Why was the conduct unlawful?

Stage 5 — Establish causation

How did the conduct cause the claimant's loss?

Stage 6 — Determine remedy

Damages, restitution, avoidance, injunction, declaration or regulatory relief?

34. Exam-Ready Answer

Unfair commercial practices refer to commercial conduct that improperly misleads, deceives, manipulates or otherwise unlawfully prejudices consumers or other market participants. In the UAE, the issue is addressed through a combination of the Civil Transactions Law, Consumer Protection Law, Competition Law, contractual principles, unfair-term legislation in applicable jurisdictions, and sector-specific regulation. Common examples include misleading advertising, false representations, hidden charges, deceptive pricing, unfair contractual terms, mis-selling and misleading comparative advertising.

A claimant should establish commercial conduct, applicable legal duty, breach, causation and legally recoverable damage. The DIFC decisions in Kishanchand Gangaram Bhatia v ICICI Bank, Kolesnik v Emirates NBD, Al Khorafi v Bank Sarasin-Alpen, Kirtanlal v State Bank of India, Oheo Bank v Parker, and Gate MENA v Tabarak illustrate different aspects of unfair-term, misrepresentation, contractual, regulatory and digital-commercial disputes. Comparative authorities such as OBG v Allan and Interfoto v Stiletto may assist where appropriate but are not UAE precedents.

Memory Formula

Unfair Commercial Practice = Misleading/Improper Conduct + Legal Prohibition + Causation + Damage → Appropriate Civil/Regulatory Remedy

One-Line Revision

The key question is not merely whether commercial conduct was “unfair”, but which specific legal duty it violated and whether that violation caused a legally recoverable loss.