Legal-Economic Analysis of the Acceptability of Gain-based Damages

Document Type : Original Article

Authors

Private Law, Faculty of Law, Shahid Beheshti University, Tehran, Iran.

10.52547/lawresearch.23.89.399

Abstract

Gain-based damages, as a new and exceptional criterion for assessing damages, is placed against loss-based (or compensatory) damages. Rather than focusing on the losses suffered by the aggrieved party as a result of breach, this criterion places emphasis on the profits derived from breach by the breaching party. The most salient question in relation to this criterion is whether such a focus on the benefits derived from breach could constitute a valid basis for the assessment of damages in cases of breach of contract; and if so, whether such a criterion could be acceptable in the Iranian legal system. Emplying an analytical approach, this article attempts to answer these questions. Based on the findings of this research, it is submitted that first, bearing in mind the legal and economic aspects of the issue, accommodating such a criterion in a legal system is a must in any comprehensive regime for contractual liability to compensate for damages. Second, there does not seem to be a significant barrier for accepting this criterion in Iranian legal system, particularly given the fact that, based on Article 3 of the 1960 Law on Civil Liability, determining the amount of damages and the manner of compensation is at the judicial discretion of a judge.

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References

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History

  • Receive Date: 19 November 2018
  • Revise Date: 23 April 2019
  • Accept Date: 24 April 2019

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