I had paid Dh2,000 as deposit to book a new car at a dealership in Dubai. Due to unforeseen job-related circumstances, I dropped the plan to buy the car. In the deposit receipt, it is mentioned "non-refundable". I have explained my situation to the dealer, but my request has been declined. The dealer told me that the deposit is non-refundable and can be used only against buying a car or servicing a car of their brand. Is it legal to write that the deposit is non-refundable in the receipt? If I approach the UAE consumer court, can I recover my deposit amount?

Pursuant to your queries, we assume that you entered into an expressed or implied contract with the car dealership company in Dubai and in accordance with the said contract, you paid a deposit of Dh2,000 as part of booking a new car. The car dealership company provided you with a receipt for the deposit amount you paid and the said receipt mentions that this deposit is "non-refundable".

Since you accepted the term "non-refundable" as mentioned on this receipt and paid the deposit with full knowledge and acceptance that this deposit is "non-refundable", the deposit may not be refundable. This is in accordance with Article 148 of the Federal Law No.5 of 1985 on the issuance of the Civil Transaction Law of the UAE, which states: "1. Payment of advance money shall be considered evidence that the contract has become finally binding, and no one can withdraw from it unless the agreement or custom requires otherwise.

"2. If two contracting parties agree that the earnest money be considered a penalty against the party who withdraws from the contract, either one of them shall be entitled to withdraw, and whoever pays the earnest moneys shall lose it if he withdraws, and whoever receives it, shall make restitution thereof plus an equivalent amount if he withdraws."

Ashish Mehta is the founder and Managing Partner of Ashish Mehta & Associates.

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