Under apparent agency a land sale binds the owner, and only the owner can claim under it

Ras Al Khaimah Court of Cassation, Civil Appeal No. 14 of 13 JY, judgment of 9 April 2018

Court
Ras Al Khaimah Court of Cassationمحكمة تمييز رأس الخيمة
Case
Ras Al Khaimah Court of Cassation, Civil Appeal No. 14 of 13 JY, judgment of 9 April 2018
Arabic citation
الطعن رقم 14 لسنة 13 ق مدني، جلسة 9/4/2018
Topics
Real estate · Civil law · Commercial law
Laws applied
Civil Transactions Law 1985 (repealed)
The judgment
Read it on courts.rak.ae ↗ (Ras Al Khaimah Courts, مجموعة الأحكام والمبادئ القانونية الصادرة في المواد المدنية والتجارية والعمالية من محكمة تمييز رأس الخيمة, judicial year 13 (2018), PDF pp. 86–91)
Summary written
31 October 2026
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The principle

A contract may be made through an agent, whose authority under the agency agreement governs his relationship with the principal; a third party must normally check the agent's authority. But where the principal's own conduct creates an outward appearance that misleads a third party in good faith into believing an agency exists, the third party may treat the contract as binding the principal on the basis of apparent agency. Compensation is primarily in kind, by making the transaction effective against the principal, and the contract's rights and obligations then belong to the principal, not the apparent agent.

The case and the decision

A Kuwaiti company owning plots of land in the Khatt area of Ras Al Khaimah instructed a real-estate establishment to sell them, and the establishment sold the plots to the respondents' predecessor under three agreements. The buyer obtained a judgment confirming the validity and enforceability of the sales; the owner obtained a final judgment rescinding its own dealings with the establishment and a final judgment (in Appeal No. 39 of 2012) ordering the appellants to pay it a large sum. The appellants, who represented the establishment and were the heirs of the person who had dealt with the buyer, then sued the buyer's heirs in 2016, arguing that the establishment had been an intermediary that bought the land to resell it at a profit and claiming the difference between what they said was the land's true value and the amount awarded against them. The lower courts rejected the claim. The Court of Cassation set out the law on agency: a party normally expresses its own will, but may act through an agent; the agency's scope and effects between principal and agent are governed by their agreement, and a third party dealing with the agent is a stranger to that relationship who must check the agent's authority. Where, however, the principal's conduct creates an outward appearance that would lead a third party acting in good faith to believe an agency exists, that third party may hold the principal to the transaction on the basis of apparent agency, because the principal's conduct amounts to a fault; compensation is in kind, by making the transaction effective against the principal. Apparent agency produces the same effects between principal and third party as a real agency. The sales to the buyer took effect for the owner company, which alone could claim rights under them, as final judgments had settled. The appellants, as heirs of the apparent agent, had no substantive standing to claim under those contracts. The lower court's result was correct despite some erroneous legal statements, which the Court corrected, and the appeal was inadmissible.

Why it matters

The ruling shows apparent agency cutting both ways in RAK property dealings: a buyer who dealt in good faith with someone the owner allowed to appear as its agent keeps the purchase, and the intermediary, having acted as the owner's apparent agent, cannot later claim the deal's profits for itself. Intermediaries who want to trade on their own account need to buy in their own right, not sell as the owner's agent.

Laws applied

Federal Law No. 5 of 1985 (Civil Transactions Law)
Decided under this law; it has been replaced by Civil Transactions Law 2025.

In the court’s words

“من المقرر أن الأصل هو قيام المتعاقد نفسه بالتعبير عن إرادته في إبرام التصرف إلا أنه يجوز أن يتم بطريق النيابة بأن”

Short quotation from the judgment as published by the court. The full judgment is on the court’s official service.

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Source. Summary written by Polaris from the judgment published by the Ras Al Khaimah Court of Cassation on courts.rak.ae (Ras Al Khaimah Courts, مجموعة الأحكام والمبادئ القانونية الصادرة في المواد المدنية والتجارية والعمالية من محكمة تمييز رأس الخيمة, judicial year 13 (2018), PDF pp. 86–91), read on 31 October 2026. Party names are anonymised in the court’s publication.
Published for general information by Polaris Corporate Services FZ-LLC. It is not legal advice. This page is a summary written by Polaris; it is not the judgment and is not an official translation. Read the judgment on the court’s official service before relying on it. A judgment decides the dispute before the court; its weight in a later case depends on the court, the facts and any later change in the law or in the court’s own case law.

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