Comparative Study on the Effect of Liquidated Damages in General and Competitive Rules (Iranian Law, Common Law, European Union Law)

Document Type : Research Paper

Authors

1 assistant professor, law department, humanities faculty, university of bojnord, bojnord, Iran

2 Shiraz University

Abstract

Normally, the common intention and goal of the parties to the contract is the full implementation of its provisions. To prevent breach of contract and fulfill the common will of the parties, there are several performance guarantees that One of them is the provision of a certain amount in the contract as a liquidated damages. The purpose of this study is to investigate the effect of this performance guarantee on general and competitive rules. In this regard, the nature and legal effects of this method have been studied to answer this main question that What is the nature and legal effects of liquidated damages in applicable legal systems, and which approach is more compatible with reciprocal justice and the purpose of the contract? In addition to the general rules, in competitive rules, the application of anti-competitive practices upsets the relative balance of power between the parties to the contract.The effect of including this performance guarantee in accordance with the general rules is three approaches: Absolute application - such as Iranian law and French law before the 1975 reforms; The invalidity of the condition - in the system of common law and the application and execution of partial damages with the possibility of adjusting it to unreasonable and exaggerated conditions (UNIDROIT principles, PECL and French law after the 1975 amendments).

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References

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