The value of the day of sale in the weighing scale of the buyer’s compensation and regularization of the consensus decision No. 811

Document Type : Research Paper

Authors

1 Associate Professor of Department of Law in University of Meybod,

2 the student of PhD in private law at university of meybod

10.22099/jls.2023.47386.4953

Abstract

This article examines the role of the sale date in determining buyer compensation and regularization in Supreme Court unanimous decision No. 811. It discusses the challenges faced by courts in calculating compensation for the decrease in purchasing power of the buyer's cash price and the issuance of conflicting decisions. The article analyzes the purpose and desired outcome of the unanimous decision, provides a systematic interpretation of its provisions, and concludes that the sale date price is primarily a criterion for determining inflation rather than a direct measure of total compensation.
After the conclusion of a contract, the buyer may discover that the object of sale is defective. In such cases, the seller is obligated to return the price and provide compensation to the buyer. Due to the lack of clear criteria in the laws regarding the calculation of compensation for the decrease in purchasing power and the absence of consistent judicial procedures,the Supreme Court issued two unanimous decisions on this matter.
In 2014, unanimous decision No. 733 established the principle of considering the decrease in purchasing power as a compensable loss. However, the criteria for calculating this decrease remained disputed. Some courts used the general inflation index, while others considered the inflation rate for specific goods. These differences led to the issuance of unanimous decision No. 811 in 2021.
Despite this decision, confusion persists regarding the role of the "price on the day of sale" in determining buyer compensation. Some courts consider this price as the total compensation, regardless of the price actually paid by the buyer. Others use it as a criterion for calculating inflation.
This article argues that the price on the day of sale is primarily a criterion for determining inflation and cannot be directly equated with total compensation. The purpose of the unanimous decision is to compensate the buyer for the devaluation of their money due to inflation and to restore their purchasing power.
To calculate compensation, two criteria can be used:

General inflation index:This is a central bank index that measures inflation based on a basket of goods.
Inflation rate for specific goods:This measures the increase in price of similar goods to the object of sale.

The choice of criterion depends on the circumstances of the case and the buyer's intended purchase. The goal is to restore the buyer's situation to the day before the contract was concluded, so that they can have a similar purchasing power.
Unanimous decision No. 811 is significant in that it establishes the objective inflation criterion as the basis for compensation. This provides greater protection for buyers in cases of defective sales.
In conclusion, the price on the day of sale is an important factor in determining buyer compensation, but it should not be used as a direct measure of total compensation. The goal is to compensate the buyer for the loss of purchasing power due to inflation, taking into account the circumstances of the case and the price paid.

Keywords

Main Subjects

References

Ansari, M. (2014). Economic Analysis of Contract Law, Tehran: Javdaneh Publications [In Persian].
Alsharif, M.M, Ghaem Fard, M. Mansouri Tehrani, M. M. (2020). A Reflection on the Types of Late Payment Damages and the Possibility of Applying them to Foreign Currency Debt, Private Law, 17(2), 351-357 [In Persian]. DOI: 10.22059/jolt.2020.301410.1006841
Alsharif, M. M.) 2022(. The Logic of Rights, Tehran: Publishing Company [In Persian].
Almasi, M. Vaezi, A. (2021). The Foundations and Consequences of Legal Textualism in Contemporary Judicial Systems, Knowledge Quarterly of Public Law, 11(35), 73-92 [In Persian]. DOI: 10.22034/qjplk.2022.243
Abdi Pour, E. Parto, H. R. (2012). A Discussion on the Legal Non-compliance of the Product and its Performance Guarantee, Law Quarterly, 42(2), 199-215 [In Persian].
Babaei, I. (2005). Criticism of the Principle of Compensability of all Losses in Iran Civil Liability Law, Law and Policy Research, 7(15,16), 45-83 [In Persian].
Badini.H. Khakbaz, M (2019) A Reflection on the Solutions to Balance the Rights of the Parties to the Contract in Inflation, Legal Journal of Justice, 83(107), 95-111 [In Persian]. DOI:10.22106/JLJ.2019.75733.1808
Bahmani, M. (2007) An Overview of Special Methods of Assessing Contractual Damages Based on Articles 75 and 76 of the Convention on the International Sale of Goods and Iranian Rights, Iranian and International Comparative Legal Research, 1(1), 39-82 [In Persian].
Jafari Langroudi, M .J. )‌2022) General Philosophy of Law؛ Theory of Equilibrium, Tehran: Ganjedanesh Publication [In Persian].
Jafari Tabar, H. (2022). Hirani Logic about Legal Reasoning, Tehran, New Publishing Culture [In Persian].
Junadi, L.  (2002) A Comparative Study of Obligation to Provide Information with Emphasis on Common Law Systems, Journal of Faculty of Law and Political Sciences, 56, 11-47 [In Persian].
Khoda Bakhshi, A. )2022( Claims Rights 4؛ Selected Analysis, Tehran: Publishing Company [In Persian].
Ranjbar, M. R. )2016(  Determining Damages due to Breach of Contract, Tehran: Mizan [In Persian].
Rahpeyk S. Sahrai Mowane, N. (2018) Organizing the Theory of Contractual Justice in France, English and Iranian Jurisprudence and Law,  Comparative Law, 15(2), 219-244 [In Persian]. DOI:10.22096/law.2018.99003.1364
Katouzian, N. (2005). Interpretation of the Contract, Journal of Faculty of Law and Political Sciences, 70, 277-308 [In Persian].
Katouzian, N.  ) 2021). Philosophy of Law؛ Law Sources, Tehran: Ganjedanesh Publication [In Persian].
 Katouzian, N. ‌)2022). Philosophy of Law؛ Definition and Nature of Right, Tehran: Ganjedanesh Publication [In Persian].
 Golbaghi Masouleh, A.J. ) 2020). Customary Income, Qom: Bostan Ketab Institute [In Persian].
Makarem Shirazi, N.)2006) New Polls, Qom: Publications of Imam Ali Ibn Abi Talib School [In Persian].
Mirza Nezhad Joibari,A. khoshnoodi, R. (2021). Damages for Late Payment in Case Law with a Comparative Study of French Law, Tehran: Judiciary Research Institute [In Persian].
Mohammadi, G. Jamali, M. (2016). Order to Enforce a Void Contract as a Method of Compensation, Legal Journal of Justice, 95 83-100 [In Persian].
Mohebbi, M. Faraj Mehrabi, H. (2019) Methods of Assessing Expropriation Compensation in International Investment Arbitration,  Spring Legal Encyclopedias, 2, 1033-1057 [In Persian].
Mahmoudi, A. (2020) The Scope of the Seller’s Understanding of the Warranty against the Compensation for Damages Caused by the Depreciation of the Currency, Messages, 9, 39-62 [In Persian].
Vahdati Shabiri,N. Mirza Nezhad, H. Rezvanian, A, Ovais, Mohammad (2018) Fiqh-legal Analysis of the Role of Custom in Explaining the Obligation to Reject the Monetary Price in Case of Invalidity of Sale, Jurisprudential and Principle Essays, 4(13), 79-100 [In Persian].
Yazdani, GH. Mohebbi, M. Emami, M. (2016) The Criteria for Calculating Damage Caused by the Violation of the Investment Contract in Islamic Jurisprudence and International Arbitration Procedure, Teaching of Civil Jurisprudence, 13, 185-216 [In Persian].
 
 
Journal of Legal Studies
Volume 16, Issue 3 - Serial Number 53
October 2024
Pages 193-218

Files

Share

How to cite

Statistics