Document Type : Original Article
Authors
1
Associate Professor, Departmet of Law, Payame Noor University, Tehran, Iran
2
PhD Candidate, Departmet of Law, Payame Noor University, Tehran, Iran. Corresponding Author Email: sarraebrahimi93@student.pnu.ac.ir
3
. Assistant Professor, Departmet of Law, Payame Noor University, Tehran, Iran
Abstract
Introduction
Contract law fundamentally struggles with defining the extent of parties' free will and the permissible limits of external intervention, particularly by judges, In private agreements. In traditional legal systems, such as Iran's, the principle of autonomy of will is a core tenet, leading to skepticism about the feasibility of judicial intervention in private contracts. This skepticism Is rooted in the belief that freely negotiated contracts are the fairest mechanism for performance, and judicial interference undermines individual liberty and autonomy in transactions, and causes uncertainty in the results of transactions. This has led to conflicting judicial practices in the Iranian legal system. Conversely, modern legal systems have moderated the principle of autonomy of will by embracing emerging principles like the principle of good faith, the principle of economic efficiency, and the reliance theory. These principles have paved the way for granting judges broader authority to intervene, resolve contractual disputes, and ensure contractual justice and fairness. The present research addresses this critical Issue by exploring the following central questions: 1. What are the legal foundations for judges' intervention in private contracts across different legal systems? 2. What are the specific methods and procedures through which judges exercise this right? 3. What are the standardized frameworks and limits necessary to prevent arbitrary judicial discretion and its resulting adverse outcomes? The primary objective Is to conduct a comparative study to analyze these principles and methods, and subsequently propose specific legal reforms for the Iranian system. The main goal is to conduct a comparative study to analyze these principles and methods and then present reform proposals for the Iranian legal system in order to free judges from doubt and ensure contractual justice by clearly determining the criteria and methods of judicial intervention.
Methods
This research employs a descriptive, analytical, and comparative approach to investigate the foundations, methods, and limits of judges' intervention in private contracts. The study Involves a comparative analysis of the Iranian legal system and several modern legal systems, notably the laws of France, Germany, the United States (UCC), and England, alongside relevant international instruments such as the Convention on the International Sale of Goods (CISG) and the Principles of European Contract Law (PECL). Data collection was performed through library research, focusing on primary legal sources including domestic and foreign statutes, judicial precedents, and scholarly legal doctrine (books and specialized articles). The analytical phase begins with a critical review of the emerging principles justifying intervention (good faith, economic efficiency, and reliance) and assessing their current status In Iranian law. Subsequently, the practical methods of judicial intervention—including judicial modification, contract interpretation, contract completion, and contract revision—are examined and compared with Iranian legal practice, paying particular attention to the 2016 French Civil Code reforms. Finally, based on the comparative findings, essential frameworks for standardizing judicial intervention, such as adherence to principles of fair trial and establishing imperative rules, are developed to inform the reform recommendations.
Results and Discussions
The comparative study confirms that in modern legal systems, the authority for judicial intervention is firmly established, based on emerging principles. The principle of good faith has been extended even to the negotiation stage, the principle of economic efficiency sometimes prioritizes damage compensation over specific performance, and the reliance theory validates legitimate expectations as a basis for contractual obligation. In contrast, Iranian law has not formally recognized these as general contractual rules, though they are implicitly present in certain specialized statutes (e.g., Commercial Contracts Bill, E-Commerce Law) or in judicial practice through recourse to customary practice and religious principles. The research's findings regarding the methods of judicial intervention reveal four core mechanisms employed by judges to achieve contractual fairness: 1) Judicial Modification (Adjustment): This method involves adjusting obligations in the event of unforeseen circumstances (e.g., Article 1195 of the reformed French Civil Code), In dealings involving contracts lacking bargaining power (e.g., unfair or unconscionable clauses), and through the modification of liquidated damages or the granting of reasonable grace periods to the distressed debtor. French law explicitly grants judges the authority to modify contracts due to unforeseen difficulties. In Iranian law, explicit rules are absent, and reliance on Osr-o-Haraj (hardship) or Implied terms remains contentious. 2) Contract Interpretation: Aims at discerning the parties' common intention, interpretation is standardized in modern systems (e.g., Articles 1188 to 1194 of the French Civil Code) with explicit rules such as interpretation in favor of the debtor or the weaker party in adhesion contracts. In Iranian law, interpretation adheres to the theory of subjective will, but clear, codified rules are lacking in the Civil Code, relying heavily on judicial precedent and Islamic jurisprudence. 3) Contract Completion (Filling Gaps): When a contract is incomplete, judges introduce implied terms to ensure its enforceability. Modern systems standardize completion using law, custom, and the principle of good faith with specific guidelines (e.g., Article 1167 of the French Civil Code). In Iranian law, completion is achieved through reference to the parties' implied will, custom, and supplementary rules. 4) Contract Revision (Correction/Amendment): Distinct from modification (adjustment for Imbalance) and completion (filling gaps), revision involves changing a sound contract for better execution due to unexpected conditions (e.g., technological advances). This concept is not clearly differentiated from modification/completion in Iranian legal literature. Crucially, the study concludes that granting these powers without defined limits leads to arbitrary and undesirable outcomes. Therefore, the scope of judicial Intervention must be explicitly prescribed, in addition to identifying these powers. This framework necessitates adherence to principles of fair trial (impartiality, procedural equality, right to defense), prioritizing the principle of contractual stability, and interpreting terms in light of the entire contract. Furthermore, the development of protective statutes, standard contracts, and standard clauses is essential to provide judges with objective tools for applying relative concepts like good faith.
Conclusion
Judicial intervention in private contracts is an indispensable requirement for realizing contractual justice In modern legal systems. In the Iranian legal system, despite the absence of explicit recognition of emerging principles (good faith, economic efficiency, reliance) and intervention methods (modification, completion, interpretation, and revision) as general contractual rules, It is recommended to undertake legislative reform. This should explicitly codify these principles and methods, drawing inspiration from leading systems like the French 2016 reform. Specific legal remedies (e.g., rescission and compensation for breaches of good faith) should also be defined for each principle. The exercise of these powers must be strictly confined by an imperative framework, including mandatory compliance with fair trial principles and the use of standardized instruments, to prevent personal bias, alleviate judicial doubt, and maintain transactional stability and trust.
Highlights
- Judicial intervention in private contracts is accepted in modern legal systems based on emerging principles such as good faith.
- This intervention is carried out through methods such as interpretation, modification, and completion.
- The Iranian legislator should explicitly define the limits and methods of this authority by reforming general laws.
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