Economic Analysis of Gap Fillings of Contract in Trial based on Iran Procedure

Document Type : Original Article

Authors

Tehran university law faculty

10.48308/jlr.2021.222360.1932

Abstract

Contracts, as the most important tool for resource allocation and distribution of economic values, have always had gaps and contractual silence because of some reasons such as rational constraints, transaction costs and information asymmetry. Contractual parties’ disagreement on how to complete these gaps has led to many lawsuits, which have required judicial bodies and judges to complete or interpret the contracts. Among many different approaches (schools of thought) which attempts to complete or interpret contracts, economic analysis of law, which is generated from the synthesis between law and economics, focuses on completing contractual silence based on increasing efficiency, optimism and avoiding opportunistic behaviors. In addition to judges benefiting from the fundamentals and implementing tools of economic analysis approach, this approach and its effects on interpreting and completing contracts during court procedure needs to become a state of mind for the judge when issuing awards based on efficiency and optimism. Reducing court procedure costs, issuing pioneers awards based on judicial justice and efficient allocation of resources and contractual risks are only some of the prominent effects of economic analysis of law approach. Scrutinizing the Iran’s law system shows that in spite of exciting limitations and burdens, the condition for implementing and benefiting from this approach has been presented in the judicial procedure and there are evidences available regarding this subject matter. Also there is a vital requirement to design efficient default ruled due to manage and judge efficiently.

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History

  • Receive Date: 20 June 2021
  • Revise Date: 30 July 2021
  • Accept Date: 15 August 2021

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