The Effect of Termination of the Contract on

Javaherkalam, Mohammad Hadi; Alijani, Mohsen; Sharifi, Fakhrodin

doi:10.22106/jlj.2024.2015449.5510

The Effect of Termination of the Contract on "Liquidated Damages Clause"; A Comparative Study in Iranian, English and French Legal Precedents

Document Type : Research/Original/Regular Article

Authors

Mohammad Hadi javaherkalam ¹

Mohsen Alijani ²

Fakhrodin Sharifi ³

¹ Assistant Professor of Private Law, Faculty of Law and Political Science, Allameh Tabatabai University

² Assistant Prof of Faculty of Law and Political Science , shahid chamran university of ahvaz, Ahvaz, iran

³ PhD Student in International Trade Law, Faculty of Law, Shahid Beheshti University, Tehran, Iran.

10.22106/jlj.2024.2015449.5510

Abstract

There are two opinions about the effect of termination of the contract on liquidated damage clause, it's non_fulfillment or it's delay in fulfillment. the first opinion is the lapse of the clause due to the termination of the contract and the second is survival of creditors right about demanding the liquidated damages. In this article with a comparative method ,aforementioned issue has been studied in the jurisprudence of Iran, France and England and the findings indicate differences between the courts opinions of these countries. Supreme Court of England ruled based on the first opinion and it didn't accept substitution of the creditor Unless the parties have explicitly stipulated it in the contract.In French law, some courts consider the obligation to be an independent clause of the contract, which can be survived even after the termination of the contract.But some of the jurists believe that liquidated damages for non-fulfillment of the obligation can be demanded even after termination of the contract; However, delay liquidated damages are not claimable after termination of the Contract. In Iranian's Legal Precedent System, many differences of opinion have arisen But it seems that the final criterion in this field is the intention of the both parties However, as a whole, the distinction presented in French legal doctrine can also be applied as a guide in Iranian law.

Keywords

Liquidated damages

penalty clause

independence of theclause of thecontract

dissolutionof the contract

English law

French law

Subjects