Contractual Dispute over an Advertising Signboard: Rescission Claim Dismissed

Contractual Dispute over an Advertising Signboard: Rescission Claim Dismissed

Why unclear specifications and disputed evidence mattered when the client sought to rescind a signboard contract and recover payment.

AMINA KHALIFA ALI ABDULLA BUKHAMMAS — 05.11.2026

Теги: case analysis civil claims civil law litigation

The Content Structure

01. The Story Before the Dispute

A company contracted for a bilingual illuminated façade sign, paid the full price in advance, and later disputed the completed work.

02. The Dispute

The parties disagreed about the agreed lettering, the sign’s dimensions, and what the expert report established.

03. The Judgement

The Court of First Instance dismissed the claim, and the Court of Appeal upheld that dismissal.

04. Reasons for the Judgment (Legal Analysis)

The courts focused on the written contract, proof of the agreed specifications, and the expert’s findings.

05. Questions and Answers

The questions explain how evidence and precise contract specifications affect similar disputes.

01. The Story Before the Dispute

A company engaged in the repair of goods and the trade in machinery and equipment (the “Client”) entered into a contract with another company specializing in the manufacture of miniature models and electrical lighting equipment (the “Contractor”) for the fabrication of an advertising signboard for the Client, to be installed on the façade of its business premises. The agreement was made in writing and included specifications for the signboard.

Under the agreement, the signboard consists of two advertising phrases: the first bears the Client’s name in both Arabic and English together with its logo, and the second bears the name of another activity connected with handicraft works, also in both languages. The agreement stipulated that the lettering be three-dimensional (3D) with LED lighting around the edges of the letters, that the letters be of a specified height, that the overall length of the signboard be a specified measurement, and that the quality of workmanship be first-class.

The Client performed its financial obligation in full, having paid the entire agreed consideration in two instalments by two cheques before the fabrication and installation works were completed; that is, it retained no part of the price as security for proper performance.

Perhaps the most notable feature of this agreement is that it did not specify the form of the letters of the second phrase, nor did it provide for the preparation of a trial sample to be approved by the Client before execution. This gap in the drafting of the contract is what later opened the door to the dispute.

After performance commenced, the Contractor installed part of the signboard. According to the Client, this part was smaller than the agreed dimensions, and the remainder of the signboard was not completed. The Client therefore repeatedly served notice on the Contractor requiring it to complete the work in accordance with the specifications or to refund the price together with compensation, without receiving any response. It then filed an official report to record the condition of the works and subsequently resorted to the courts.

02. The Dispute

The dispute before the court centered on two principal issues:

First: Did the Contractor breach its contractual obligations, such that the Client is entitled to rescind the agreement and recover what it paid?

Second: The issue of greater practical significance: upon whom lies the burden of proving the true substance of the agreement regarding the form of the letters of the second phrase, given the ambiguity of the contract on this point?

Position of the Client (the Claimant):

Before ruling on the merits, the Claimant requested that the case be referred to a technical expert to inspect the signboard and determine the extent of its conformity with the agreed terms and specifications, the cost of its removal, and the particulars of the breach. On the merits, it sought rescission of the agreement and an order requiring the Contractor to refund the entire amount paid, together with default interest, court fees and costs, and attorneys’ fees.

The Claimant relied on the provisions of the Civil Code, including Article (128), which provides that the contract is the law of the contracting parties and that neither party may revoke it or unilaterally amend its terms; Article (129), which requires that a contract be performed in accordance with its contents and in a manner consistent with good faith; Article (140), which provides that, in bilateral contracts, where one party fails to perform its obligation after having been given formal notice, the other party may demand either performance or rescission of the contract, together with compensation; and Article (142), concerning the restoration of the contracting parties to their pre-contractual positions upon rescission official Civil Code text

It further argued that the installed part was smaller than the agreed dimensions, that the second part was not installed as required, and that the repeated notices left unanswered constitute sufficient formal notice.

Position of the Contractor (the Defendant):

The Defendant contended that it had complied with the agreement and had fully prepared the signboard in accordance with the agreed dimensions, form, and lighting; that it was the Client that, without justification, refused to have the signboard fixed and installed and asked it to change the form of the letters so that their edges would take the shape of a rope; and that the Client refused to pay the cost of that change. Accordingly, it requested that the claim be dismissed.

According to its account, the agreement as to the second phrase provided for straight letters on which a rope-shaped sticker would be applied, and what the Client later requested, namely letters that are actually curved, is a different design requiring an increase in the price, for which no agreement or price quotation was concluded and which was merely discussed orally.

Course of the Proceedings and Evidentiary Inquiry before the Court of First Instance:

The court was not content with the written pleadings exchanged between the parties, but appointed an expert to inspect the signboard. The expert concluded that the signboard that was prepared, and part of which was installed, conformed to the agreement; that the Client had approved the installation of the first part; and that the second part had been fully prepared with slanted letters and a rope-shaped sticker, but the Client refused to have it installed. He added that it had not been established that the parties had agreed that the installed letter would serve as a sample, nor as to its value.

The matter was remitted to the expert to respond to the Client’s objections, and he maintained his findings. At that stage the Client submitted a new document (an email correspondence) indicating a misunderstanding as to the sample; the Defendant objected to its admission on the ground that it had been submitted after the prescribed deadlines.

The court then referred the case for the hearing of evidence and heard two witnesses for the Client and one for the Contractor. The testimonies were conflicting: one of the Client’s witnesses affirmed that the agreement had provided from the outset that the second part would be made of curved letters in the form of a rope, whereas the other witness testified to the incident of the objection to the size of the letters in the first part, without having seen the agreement. The defense witness, however, affirmed that the agreement was for straight letters with a rope-shaped sticker, and that the Client rejected the design and requested curved letters at an additional cost, which the Contractor did not accept.

03. The Judgement

The Court of First Instance dismissed the claim and ordered the Client to pay the court fees and costs and a nominal sum in respect of attorneys’ fees.

On appeal, the Court of Appeal accepted the appeal as to form, dismissed it on the merits, and upheld the appealed judgment, and ordered the Appellant to pay the costs of the appeal and a nominal sum in respect of attorneys’ fees.

In sum, the courts at both levels did not find the Contractor to be in breach of its obligation; rather, they held that it had prepared the agreed signboard and completed it, and that it was the Client that refrained from taking delivery of the second part and having it installed, and that the Client failed to prove that what it demanded was in fact what had been agreed. Consequently, the amount paid remained with the Contractor, and the contract was not rescinded.

04. Reasons for the Judgment (Legal Analysis)

First: The Rule on the Burden of Proof:

The Court of First Instance proceeded from the rule established in the Law of Evidence in Civil and Commercial Matters, namely that the creditor must prove the obligation and the debtor must prove its discharge. Since it was the Client who alleged that the agreement on the second part provided for curved letters, it was incumbent upon the Client to prove that content, in which it did not succeed.

Second: The Contract Is the Law of the Contracting Parties:

The Court affirmed the principle set out in Articles (128) and (129) of the Civil Code, that a contract is to be performed in accordance with its terms and in a manner consistent with good faith. Accordingly, what matters is what the agreement actually states, not what one of the parties expected. Since the agreement did not specify the nature of the letters in the second phrase, and nothing in it established that they were to have slanted edges in the form of a rope, the Contractor cannot be made to bear an obligation that does not appear in the contract.

Third: Adopting the Expert’s Report:

The Court adopted the report of the court-appointed expert, on the basis that an expert’s report is an item of evidence whose assessment lies within the discretion of the court of the merits, which may accept it in whole or in part where it is satisfied with it and it rests on sound reasoning, particularly as the expert annexed supporting documents for his findings. Accordingly, the Court held that the Contractor had performed the agreement and had prepared the agreed signboard and completed it.

Fourth: Significance of Installing a Single Letter as a Sample:

The Court considered that the installation of only one letter in the rope form as a sample, without preparing the rest of the phrase in the same form, is evidence that what had been agreed upon was the signboard that was actually prepared, and that the curved sample was an attempt to appease the Client rather than performance of an existing obligation. Moreover, the Client did not prove the value of this sample or the substance of any agreement concerning it.

Fifth: Assessment of Witness Testimony:

The Court was satisfied with the testimony of the defense witness and relied on his evidence that the agreement provided for the preparation of the signboard in accordance with the attached document and in the manner in which it was prepared, and that the Client rejected the design and requested a change at an additional cost. This rests on the rule that the assessment of witness testimony is a matter within the discretion of the court of the merits, according to its own conviction.

Sixth: Grounds of the Appellate Judgment:

The Court of Appeal held that an appeal devolves the case upon the second-instance court in the state in which it stood, so that the court confronts the factual and legal elements of the dispute, and that it may uphold the appealed judgment and incorporate its reasoning by reference where that reasoning is sufficient to sustain it. As the reasons of the appealed judgment were sound, it adopted them and made them supplementary to its own.

It added that it was satisfied with the findings of the court-appointed expert and the testimony of the defense witness, which indicated that the Respondent had performed its contractual obligation and that the Appellant was the one who refused to have the second signboard installed because it requested a change in the manner of its lettering contrary to what had been agreed; accordingly, the grounds of appeal against the judgment are unfounded. It ordered the Appellant to pay the costs of the appeal and attorneys’ fees, pursuant to the provision of the Code of Civil and Commercial Procedure requiring that the losing party bear them.

Seventh: Matters Not Addressed in the Judgment (Analytical Observation):

It is noted that the appellate judgment did not expressly address the Appellant’s contention that the letters installed in the first part were smaller than the agreed size, nor did it provide a detailed response to the testimony of the claimant’s witnesses; it merely adopted the reasons of the court of first instance.

05. Questions and Answers

Because rescission under Article (140) of the Civil Code requires proof that the other party has breached its obligation, and it is not enough that the claimant has paid what was due from it. The Court concluded that the Contractor had prepared the agreed signboard and completed it, and that it was the Client who refrained from taking delivery; accordingly, the condition of breach on which the claim for rescission is founded was not satisfied.

It was the principal evidence on which the judgment was based. It established that the signboard had been prepared in accordance with the agreement, that the Client had approved the installation of the first part and rejected the second, and that no agreement had been proven that the curved letter would serve as a sample. The court has the authority to adopt an expert’s report where it is satisfied with it, and both courts were satisfied with it.

Yes, and the effect was decisive. Because the agreement did not specify the form of the letters in the second phrase, the burden of proving the alleged content fell on the Client, which claimed that it provided for curved letters. Its failure to prove this, together with the defense witness’s testimony and the technical report, tipped the balance in favor of the Contractor.

It did not. The Court of Appeal upheld the judgment and adopted its reasoning, and dismissed the appeal generally as unfounded. However, the judgment did not directly address the point regarding the smaller dimensions in the first part, nor did it deal in detail with the testimony of the claimant’s witnesses, which may constitute a ground for appeal to the Court of Cassation on the basis of insufficient reasoning.

It is advisable to specify the technical requirements precisely in the contract and to attach approved designs and drawings; to require written approval of the trial sample before execution; to document in writing any subsequent modification and its cost; to serve notices and objections formally and in a timely manner while preserving all correspondence; and to link payments to completion milestones rather than paying the entire consideration in advance.

This is a general analysis of an anonymized case, not legal advice on a current dispute. Outcomes depend on the contract, evidence and facts before the court.

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