Real estate disputes often begin with one familiar assumption: the absence of a signed sales agreement means the deal does not exist.
In a recent judgment rendered by the Dubai Court of Cassation (Real Estate Appeal No. 1148 of 2026, dated 24 August 2026), the Court explained why such an assumption can be misleading. In rejecting the purchaser’s appeal and upholding the dismissal of the claims against our client, the Court reaffirmed two important principles that often shape property disputes: (1) how a sale is formed; and (2) who must begin performance first.
The Dispute: When Paperwork and Conduct Tell Different Stories
The claim relates to the purchase of an identified plot of land within a master development project. The purchaser sought the repayment of the sums he paid, in addition to compensation, claiming that no valid sale had been concluded since the available documents – the parties relied upon for the sale – were insufficient to create a binding contract. In addition, the land’s ownership had never been transferred to him.
However, records tell a different story. The invoice issued to the purchaser identified the project, the plot number, its area and the total price, and referenced the payment of a deposit equal to 5% of the sale price, together with service fees. The plot was registered as vacant land within an approved master plan, with no legal impediment to transfer once the price was paid. The purchaser, however, never paid the balance and, for an extended period of time, took no meaningful steps to complete the transaction or demand delivery.
The Two Principles That Determined the Case
1. A sale is formed by agreement, not through the existence of a particular document
Sale is considered a consensual contract. It comes into existence when purchaser’s offer and the seller’s acceptance agree on the essential elements, while each party assumes the obligations flowing from that agreement. Consent may be expressed orally, in writing, through correspondence, or through conduct that leaves no real doubt that the parties intended to be bound by this sale. Moreover, the offer and acceptance do not need to appear in a single instrument.
Two further points reinforced that conclusion. First, the characterisation of a contract relies on its substance, not on the label the parties or a third party gives it; the Court was therefore entitled to treat the invoice, read in conjunction with the deposit payment and the parties’ conduct, as evidence of a concluded sale rather than a mere brokerage arrangement. Second, the applicable real estate registration regime did not make registration a fundamental condition impacting the validity of the land sale. The fact that the ownership had not yet been transferred therefore did not, by itself, render the contract void. Accordingly, the absence of a standalone, signed sale agreement did not prevent the Court from finding that a binding sale had been concluded.
Why it matters: contractual exposure cannot be assessed solely by looking for a document titled “Sale Agreement.” Courts may consider invoices, reservation forms, receipts, correspondence and payments collectively. Where those materials identify the property subject of the agreement the price, and demonstrate a genuine meeting of minds, a binding sale may already have been concluded, together with all the obligations arising from it.
2. Payment comes first, and a defaulting party cannot rescind
The second principle concerns the order in which the parties must perform their obligations. The timing of payment is governed primarily by their agreement. Unless the parties agree to defer the price or permit payment by instalments, the purchaser must pay upon concluding the contract and before taking the delivery of, or demanding delivery of, the property. Payment is therefore not a concurrent obligation that may be fulfilled at the purchaser’s convenience; it ordinarily precedes the seller’s obligation to transfer the property.
That sequence proved decisive. The purchaser had paid only 5% of the price, while the land remained available for transfer upon payment of the outstanding balance. In those circumstances, the purchaser could not treat the absence of delivery as a breach justifying rescission. This conclusion reflects the broader rule governing contracts binding on both parties: a party seeking rescission must have performed, or be ready and willing to perform, its own obligations. Because the purchaser had failed to pay the balance, it could not rely on its own default to pursue a claim against the seller. The courts therefore found that the purchaser, rather than the seller, was the party in default.
Why it matters: a party seeking delivery, repayment or rescission should first be able to demonstrate that it has performed, or was ready, willing, and able to perform, its own obligations. Prolonged silence or inactivity may undermine that position.
Practical Takeaways for Real Estate Transactions
For developers, purchasers, brokers and advisers, three practices can help prevent disputes. First, describe the property, price, payment timetable, and transfer conditions consistently across all transaction documents. Second, state expressly when the parties intend to be bound and whether payment is deferred or staged. Finally, ensure that the parties’ conduct is consistent with the written terms, as accepting payments, issuing detailed invoices, or remaining silent for months may influence how a court later characterises the transaction.
We are pleased to have secured this successful outcome for our client following a lengthy journey through the Dubai Courts. The judgment is a useful reminder that, within the context of real estate transactions, formalities cannot be interpreted separately from the parties’ conduct; and contractual rights cannot be separated from performance. Although a record may establish an existing binding deal, performance, however, will often identify the party entitled to enforce it.
At Habib Al Mulla & Partners, we assist clients across the UAE in navigating real estate disputes, drawing on a clear understanding of both the legal framework and the commercial realities behind each transaction. Our work focuses on developing practical strategies that protect clients’ positions, support effective recovery, and clarify complex property-related disputes.
Seek Legal Counsel
Should you have any questions or require assistance with real estate transactions or disputes, please do not hesitate to reach out to our Counsel Dr. Ezzat Gharep, Senior Associate, Hossam El Safoury and Associate Youssef ElGazairly.
Disclaimer
The content provided in this article is intended for informational purposes only and does not constitute legal advice. While every effort has been made to ensure the accuracy and completeness of this information, the article does not offer a guarantee or warranty regarding its content. The matters discussed in this article are subject to interpretation, and legal outcomes may vary based on specific facts and circumstances. We recommend that readers seek individual legal counsel before making any decisions based on the information provided. If you require specific legal advice, please contact us directly.