Theory of Efficient Breach of Contract
Pages 5-28
https://doi.org/10.22034/jpl.2025.732002
Mohammad Hadi Rostami, Seyyed Mostafa Mohaghegh Damad
Abstract Breach of contract is economically efficient only when the cost of contract enforcement for the obligor surpasses the resulting benefits, thus the obligor accepts payment to the obligee for the damages, placing him at a position of contract in force to avoid further damages to himself. The preconditions for efficiency in breach of contract requires the sum of damages be less than the real imposed damages and in financial assessment of the damage the personal value of the contract is not calculated in favor of the creditor, sufficing to a criterion only. Some legal criticisms are: neglecting ethical values, reducing planning capacity, elimination of profit for the seller of precious goods, and contradiction with the principle of freedom.
The legal and economic definition of efficient breach of contract, reviewing pertinent criticisms and a comparative study with the Western legal system are among the major achievements of this paper.
Apparently, despite all problems Iran’s legal system has to challenge with to have the theory accepted, thanks to its many advantages efforts should be maintained to pave the ground for translation of this theory into action in Iran. Some solutions to that end, are the following: reinforcing legal system in full compensation for the damages, admitting Pareto efficiency rule, giving priority to social benefits over individual gains, including some economically efficient concepts as prerequisites for realization of economic justice, admitting the theory in view of ethical values, proving its lack of contradiction with specific performance of the contract.
A Comparative Study of Coma and General Anesthesia and Brain Death in Iran’s Jurisprudence and Law
Pages 29-48
https://doi.org/10.22034/jpl.2025.732218
Hamed Hasaninia, morteza chitsazian
Abstract In this paper, we have first tried to define coma and then compare it with general anesthesia and brain death by resorting to the opinions of the jurists and latest medical findings. Unlike common belief, coma is not a disease; rather, it is a prolonged state of unconsciousness that results from damage to the person’s brain. In this paper, we will investigate the nature of coma and compare and contrast it with similar states of unconsciousness in the science of jurisprudence and law. The most important outcome of this study and the aforesaid comparison and contrast will emerge in the answer to the following question: What state of life is “the person in coma” in? There is an in-depth relation between humans’ life and death on one side and jurisprudence and law on the other side, in the sense that some rules are only applicable to death and the dead person while on the contrary, there are rules that are applicable to the person as long as he is alive and become inapplicable with the passing away of the person. Therefore, a precise examination of the concepts of life and death will be inevitable toward realizing the purpose of this paper.
A Comparative Study of Mortgage Contract and Its Establishment in Iranian and American Legal Systems
Pages 49-79
https://doi.org/10.22034/jpl.2025.732219
Farideh Shokri
Abstract According to Iranian legal system, despite the existence of fixed debt in an obligation, pledgee and its waiver, the mortgage contract shall be enforceable and the right of pledgee shall be established on the mortgaged object. This is done without any difference between the two stages of creation and establishment of the right of pledge. Even in the case of immovable mortgage it is obligatory to register the document. On the other hand, in Iranian legal system the principle of transferability of the mortgage – however briefly – has been officially recognized so that conclusion of a mortgage contract and the establishment of the right of pledgee is no obstacle to future transfer of mortgage or pertinent rights by the mortgagor in case it does not violate the rights of the pledgee. The rule of this principle, without special stipulations on establishment of the rights mentioned in the contract such as obligation to register the mortgage, will sometimes raise consequences such as dispute in discerning priority, reference to the superficial contracts containing the date of priority and consequently violating the rights of pledgee as well as legal dispute in courts and probably penal procedures. Whereas in many legal systems across the world, the US legal system for instance, there is a distinction between the two stages of concluding the mortgage contract or a pledge and stipulations for the establishment of the rights of mortgage for either side. In these legal systems, a distinction has been made between movable and immovable mortgage and establishment of the right of pledgee on each case requires finishing certain formalities otherwise, the right of the pledgee will be incomplete and the priority will be with the other party finishing the procedure. The question raised in this paper is this: Is it possible to make a distinction between the two stages in Iranian legal system with respect to the existing jurisprudential laws and the enforceable legal texts?
A Legal Analysis of the Effects of Abstract Payment Obligations
Pages 80-98
https://doi.org/10.22034/jpl.2025.735819
Fatemeh Behnam, Alireza Alipanah
Abstract Unilateral undertakings constitute a juridical act of a unilateral nature which, upon its formation, immediately gives rise to a binding obligation incumbent upon the issuer (the applicant/opening party). Until such time as the issuer effects payment of the amount of the credit to the beneficiary, the issuer acquires no enforceable right vis‑à‑vis the beneficiary.
The issuer’s obligations toward the beneficiary include: the duty to examine the documents; the duty to exercise due care and to act in good faith; the duty to notify the beneficiary of any discrepancies or non‑conformities; and the duty to pay the credit.
Upon payment of the credit amount, the issuer acquires certain rights against the beneficiary, including rights arising from the breach of warranties as to the genuineness, accuracy, and authenticity of the documents and from the absence of fraud, on the one hand; and, on the other hand, rights deriving from subrogation following payment.
The beneficiary, prior to receipt of the credit amount, bears no obligation toward the issuer or any secondary (confirming or nominated) bank. Evidently, upon presentation of the documents and receipt of payment, the aforementioned obligations become established upon the beneficiary.
Examining the theory of the validity of the construction condition from the perspective of imami jurisprudence and Iranian law
Pages 99-120
https://doi.org/10.22034/jpl.2026.2075251.1011
fatemeh esmaeili
Abstract Before the contract is one of the conditions on which jurists have disagreed. Famous jurists do not consider these conditions to be mandatory. On the other hand, many jurists believe in the legitimacy of this condition. In addition to the theoretical jurisprudential reasons for the invalidity of the construction condition, they cite other jurisprudential reasons to prove their theory, which of course are not without problems. Therefore, in jurisprudential texts, we do not find a definitive theory on the validity or invalidity of the construction condition. Iranian law, based on Article 1128 of the Civil Code, considers the above conditions to be mandatory. The most important legal reason for proving the necessity of the construction condition is the clarification of the validity of the construction condition in marriage and its extension to other contracts. The jurists have explicitly accepted the construction condition in marriage. According to jurists, when a foundation condition in marriage is valid despite its existing sensitivities, it should undoubtedly be binding in other aspects of contracts as well.In this article, we will first outline the jurisprudential texts of the theory of the validity of the construction condition and cite their evidence and critique, and then we will discuss the legal arguments for this theory and critique some of them, and we will try to prove this theory. Finally, we will refer to the jurisprudential document of the above article
Breach of Contractual Duty of Disclosure in Iranian, English, and French Law
Pages 121-154
https://doi.org/10.22034/jpl.2026.2079383.1023
Seyyed Hasan Hosseini Moghaddam, Ali Habibi
Abstract Undoubtedly, access to information related to goods and services constitutes one of the fundamental rights of the consumer. In today's world, where goods have become increasingly complex due to the significant growth of industry and technology, it is no longer possible to properly identify the characteristics, disadvantages, or method of use of a product through traditional means. This transformation has disrupted the informational balance between the contracting parties, leaving one party—typically the consumer—in an unequal position with regard to knowledge.Under such circumstances, to restore this balance, it becomes necessary to impose a duty of disclosure upon the informed party, namely the seller or the producer. For this reason, a theory known as "the duty to provide information in contracts" has emerged in legal literature. According to this theory, the party possessing greater knowledge and information regarding the subject matter of the contract is obliged to share that knowledge with the uninformed party. This duty responds to the needs of today's consumer-oriented society, in which the buyer must be informed of essential information concerning the goods or services.In Iranian law, this duty has not been explicitly and independently recognized; however, by examining certain existing laws and principles, traces of such a duty may be inferred. In English law, there is likewise no general duty of disclosure, but custom or trade usage may serve as an important basis for the formation of such an obligation. In contrast, the new French Civil Code explicitly addresses this matter and attaches such importance to the provision of material information that its omission may lead to the annulment of the contract. In the French legal system, this duty is not only binding but also constitutes a mandatory obligation (ordre public) that cannot be waived even by agreement of the parties.Breach of this duty by the informed party may entail significant legal consequences, the most important of which are the relative nullity of the contract (pursuant to Article 1131 of the French Civil Code) and the imposition of damages as a sanction against the breaching party. These sanctions differ across the legal systems of Iran and England. Moreover, in Iranian law, depending on the circumstances, such breach may lead to the nullity of the contract (due to mistake as to the subject matter) or its rescission based on the right to rescind for latent defect and fraudulent misrepresentation. In English law, likewise, assuming the existence of fraudulent misrepresentation, it may render the contract voidable. For this reason, in most legal systems, disclosure to the consumer has been recognized as a fundamental obligation of the supplier, encompassing such matters as the method of using the goods, warnings concerning risks, hidden defects, and even the provision of necessary advice.