hamid afkar; M abedi
Abstract
Objective: The bodily damages supply Fund has been established to protect the victims of vehicle accidents in order to be responsible for compensating the bodily injuries of the victims together with the insurance institution. Although several legal and jurisprudential principles justify the need to ...
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Objective: The bodily damages supply Fund has been established to protect the victims of vehicle accidents in order to be responsible for compensating the bodily injuries of the victims together with the insurance institution. Although several legal and jurisprudential principles justify the need to establish this fund, but maintaining the fund's position in society based on jurisprudential and legal criteria is not enough and examining the economic efficiency and desirability of the establishment strengthens its social foundation; Therefore, in this study, an attempt is made to assess the efficiency of the bodily damages supply Fund from the perspective of economic analysis of law and its economic justification.Research Method: The present research method is analytical and descriptive.Findings: Adopting new financing methods of compensation requires the establishment of legal institutions based on economic analysis studies. The economic analysis of a legal entity means the use of economic tools and ideas in the process of legal analysis to inject economic data into the body of the legal system to maintain the dynamism and desirability of the institution. Planning the operation of the bodily damages supply Fund in the form of the cost-benefit principle and various efficiency criteria justifies the need for the survival of the institution and increase social welfare and the evaluation of the function of the bodily damages supply Fund in the light of economic theories leads to the strengthening of the foundation of the fund based on the economic analysis of rights.Conclusion: The benefit of having social security and removing the feeling of dissatisfaction resulting from the violation of the security duty of the government covers the cost of establishing the fund based on the cost-benefit principle. Although it is difficult to match the efficiency of the fund with the Pareto efficiency criterion, the difficulty of justifying most of the social and legal institutions with the said criterion makes the lack of economic efficiency of the fund negligible, based on the said criterion. Identifying the economic optimality of a legal entity based on the Caldor-Hicks criterion requires a comparison of efficiency in the assumption of the existence or absence of that entity and the superiority of its benefits. Placing the bodily damages supply Fund in the format of utilitarianism theory instills a feeling of pleasure more than pain and suffering to the society, and despite the apparent conflict of the efficiency of this institution with the Posner criterion, the possibility of quick recovery of economic power and achieving a sense of social security is a great help to maximize social wealth. Doing public duty arising from the thinking of distributive justice in compensating damages and providing the basis for social growth and excellence resulting from the good governance of the welfare state also justifies not only the role and position of the bodily injury fund in compensating for traffic accidents, but also strengthens the idea of expanding compensation funds in non-traffic accidents.
omid mohammadinia; Ali Saatchi
Abstract
The topic of this research is about legal-economic analysis of contractual securities. Contractual securities are the most appropriate tool against violation of contractual obligations by the other party. Consumers of goods and services seek appropriate securities. This seeking is based on modules of ...
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The topic of this research is about legal-economic analysis of contractual securities. Contractual securities are the most appropriate tool against violation of contractual obligations by the other party. Consumers of goods and services seek appropriate securities. This seeking is based on modules of economic analysis like mentality, tools of preferences, maximization of appropriateness, game theory, and technical and skilled efficiency, which is an integral part of an economic agent in the market. Generally speaking, the existing securities in a contract are securities related to the time after execution of an obligation and related to the execution of a obligation. The former is more in the framework of performance bond of non-execution or delay in contractual obligation and or in the framework of third party’s securities. Also, securities of services or objects of sale are related to guarantees and warranties. In this research, sorts of securities in contracts are examined. In conclusion, from an economical and legal point of view, the more effective the will of oblige in the selection and determination of security and rule of will instead of the law, the more efficient the securities. Consequently, these securities are efficient, due to better-providing preferences. Moreover, product-oriented contracts, guarantees, and warranties based on game theory could fulfill cooperative games. The integration of all sorts of contractual securities is possible and necessary.
Iraj Babaei,; Shahin Shamiaghdam
, seyed hasan Hoseini moghadam; , hossein Hamzeh robati
, Ali Saatchi; , omid mohammadinia
Abstract
Applicable rules on Intellectual properties contracts such as innovation licenses is one of the challenging issues of legal systems. The essential question is contractual issues like the formation of contracts, the obligations of parties; methods of dissolution of the contract, etc. are subject to which ...
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Applicable rules on Intellectual properties contracts such as innovation licenses is one of the challenging issues of legal systems. The essential question is contractual issues like the formation of contracts, the obligations of parties; methods of dissolution of the contract, etc. are subject to which rules? US legal system has a problem to answer this question in the legislative, judiciary, and doctrine areas. In the legislative area, there are efforts to specialize applicable rules on license contract and particularly software. Nevertheless, the states do not approve this specialization due to its generalization and similarity to the law of goods contracts. In the judiciary area, the approach of the majority of courts is an inclination to apply laws of goods contracts on information-based contracts. However, contrary to majority’s view and according to practical doctrine, in order to determine appropriate rules, one has to address the particular subject of these contracts and mainly commercial custom of a license contract and macro policies of intellectual properties systems. Thus, in Iranian Law, we must distinguish the complementary rules from mandatory rules. In consideration of complementary rules, one must examine the commercial context of intellectual properties contracts, contractual forms of the license, and nature of subject-matter (Information). In consideration of mandatory legal rules, the legal system of innovations must be identified accurately, and its applicable rules will be analyzed and codified in the light of them.
pejman Mohammadi; Mohabbat Mozafari; Narges Keshavarz Bahadori
Abstract
Extended Abstract Introduction Economic analysis of law is globally recognized in all the main legal systems. This approach is specially known to be efficient in the common law countries. In the contrary, in civil law countries such as Iran, where the judgments must be backed by legal provisions, ...
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Extended Abstract Introduction Economic analysis of law is globally recognized in all the main legal systems. This approach is specially known to be efficient in the common law countries. In the contrary, in civil law countries such as Iran, where the judgments must be backed by legal provisions, the role of economic analysis of law appears to be less important. Despite this fact, these analyses are of paramount importance in the legislation phase or in the fields where the judges have a wider margin of appreciation such as in contracts. Theoretical frame work One of the important issues that can be tackled with the economic analysis of law is the transaction intended to escape from payment. In these transactions, debtors hold the real intention to conclude the contract, but the motivation of their conduct is to escape from the payment of their debts. Methodology From the economic point of view, sometimes third parties are affected by the contract. Although not having been considered in the estimated transaction costs and benefits, these effects can influence the welfare of the society either positively or negatively. In economics, these unaccounted effects are known as "externalities". Since, from the microeconomic point of view, the markets are competitive, such externalities can result in the market failure. Transactions intended to escape from payment are one of the main examples of these contracts that can influence potential third parties. The creditors may in fact be the third parties to this type of contracts, which thereby causes them externality. This situation can become even more complicated and vague when there is an asymmetric information distribution or access between the parties, which can in turn bring about the opportunism, too. Results & Discussion There exist some laws and provisions that deal with the transactions intended to escape from payment. Amongst the relevant provisions, article 21 of the procedure of financial penalties enforcement enacted in 2015 and the uniform judicial precedent rendered in 2020 related to the aforementioned issue are of paramount importance. Taking these laws and provisions into account, the main question that arises here is whether these available rules, provisions and jurisprudences regarding the transactions intended to escape from payment are effective and sufficient if one takes an economic point of view. Although there exists a relatively good literature on this issue, including “Protection of Creditors against Contracts with Intention of Escape from Payment of Their Depts In Iran and France’s Legal Systems” in 2012 by Qaboli Derafshani et al. and “The Economic Rights of Trade Creditors in Order to Avoid Debt” in 2013 by Saberi et.al., the adopted economic approaches are not sufficient or not in accordance with the current changes of the law. Therefore, conducting a new and thorough research on the different aspects of the formation of such contracts and their validity as well as adopting the best fit economic approach to analyze the adequacy of the existing law and provisions and their efficiencies are inevitable. In order to answer the aforementioned questions, the research methodology adopted in the present study will be mainly desk-based and the results will be synthesized using qualitative and descriptive research methods. In this regard, the authors will first examine the transaction intended to escape from payment from a general point of view. In the second place, each principal element for the formation and validity of such contracts will be economically analyzed separately and thoroughly. It should be noted that the present study will not consider the economic analysis of the criminal, as it needs to be addressed in a separate paper. Conclusions & Suggestions the research show that there are two types of solutions to deal with the effects caused by the transactions intended to escape from payment. The first one is the private solution. Through this solution, parties shall try to settle their dispute by means of negotiations and / or renegotiations. If the negotiations are vain, then the second solution, namely the public solution, comes to play. By means of such solution, parties shall bring their case before the court for judgment. If such contracts are considered as enforceable, there would be the possibility to recognize their validity, however, if they are considered as incomplete, such possibility does not exist as their legal life is not fully formed. In addition, it is noted that the cost of applying article 21 of the procedure of financial penalties enforcement enacted 2015, which is applicable in the case of the transaction intended to escape from payment, is normally very high for the creditors. This clearly renders such a solution economically inefficient. The other drawback of this article is the fact that the good faith of the counter party of the debtor in the transaction intended to escape from payment also can play a role; however, by adopting such an approach in reality, the debtor will benefit from the transaction and prejudice the creditors. Overall, the authors are of the opinion that despite the numerous economically important provisions, these solutions are not effective enough to deal with such transactions in the Iranian legal system.
mohamad abedi; abdollah khodabakhshi
Abstract
From the view point of jurisprudence and civil code, and according to what has already been inferred, we have seen in the judicial procedure in the event of the deception, the deceived person (usually the plaintiff) is limited to one of two options: "termination" or "maintaining the contract". Thus, ...
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From the view point of jurisprudence and civil code, and according to what has already been inferred, we have seen in the judicial procedure in the event of the deception, the deceived person (usually the plaintiff) is limited to one of two options: "termination" or "maintaining the contract". Thus, a difference in the value of the subject of transaction cannot be demanded if termination of the contract is not plausible for the deceived person. The deceiver, could not, however, prevent the termination of the contract by paying the difference in value of the disputed subject.
Economic analysis while preserving justice demands a strategy that must be adopted and to be presented a new plan; formulating a rule that can impede the termination of the transaction by asking for or paying the price difference and to move on in accordance with the principles of Pact Sent Servando and retention of contract, which is rooted in economic custom and the community's desire for stability and security of contracts. This line of argument has been initiated in the judgment of the Court of Appeal of Markazi Province, where the court heard the claims of the price difference from deceived person (judgment number 9609978617000383, 22 November 2016). This is a wise view that seems to be against the established principles of Iranian law, but the economic and fair analysis of the basis of the judgment and some jurisprudence and legal trends confirms that.
The innovative effort of the Court of Appeal of Markazi Province has not yet been reported in judicial procedure. Judicial procedure is even more important in the law-based legal systems, because in the face of economic developments and customary precedence, new ways are found that lead to better and more meaningful compensations, namely the maintenance of contract and the economic equilibrium of both parties.
The question arises as to why the deceived person should control the termination of the contract and acquire the economic value of the subject of the date of the contract at deceiver expense? We know that the value of property in the majority of cases increases over time. In this case, if the deceived person is not able to compensate the difference between the actual price and the contract price, he will actually be losing and the Pacta Sunt Servando is also distorted. From a legal point of view and with respect to proper economic considerations, the contract should remain and prevent the revocation of documents, because compensation of the deceived person is a solution that results in more efficiency. The result that the deceiver must adhere to that.
It is noted that lawyers are used to traditional systems and principles, especially procedural laws in the current century with more than a thousand years history (in jurisprudence) regarding deception and so, change is not always welcomed. In particular, the fundamentals of the right to terminate are not so much strictly linked with economic developments, whilst the courts have a little information about these developments. In this case, it is difficult to change and re-design the basic principles. The analysis of some academic lawyers is that the right to revocation of the contract is based on the implicit condition and some based on the rule of Prohibition from harm. It seems that the preference should be given to the recent rule and the provisions of civil code should be justified on this basis, because this is based on economic analysis and, for example, if the base of the deception is for the compensation of the damages, why paying the difference between the price cannot be prevented from dissolving the contract? Some jurists and legal professors answer this question positively but this time, a judicial procedure has also come into force which recognizes the right to receive money in return for payment.
In economics, there is a theory of "exchange cost", which includes those unforeseen costs which are imposed on the other party due to the non-compliance of one of its obligations. In other words, the costs of the exchange are those that parties incur in the process of economic exchange to define and guarantee their property rights. It will include the cost of obtaining information about the seller and the buyer and the quality of the goods or the service that is exchanged, the costs of contract and oversight of the opposing party and, most importantly, the costs of defining property rights and ensuring the enforcement of these rights. Such analysis also affects the foundation of deception.
In economic developments, instead of insisting on the technical rules of the contract and its dissolution instruments, solutions move toward balance and efficiency. However, when efficiency gains are prioritized over the rule of abuse of the right, one hopes that contracts change the way to balance and better compensate for the weaker (deceived) party and flexible and efficient rules replace those which are technical and non-flexible.
Ali Ansari; Hassan Badini; ahad shahi
Abstract
One of the basic issues in the economic analysis of contract law is the position of remedy enforcement concerning the specific performance along with its connection to the termination of contract and payment of damages which are presented in this study. In fact, the common law and civil law systems have ...
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One of the basic issues in the economic analysis of contract law is the position of remedy enforcement concerning the specific performance along with its connection to the termination of contract and payment of damages which are presented in this study. In fact, the common law and civil law systems have predicted a set of different regulations in this regard. in common law, damages are taken into account as a general remedy for the breach of contractual obligations where in some exceptional cases, an execution of the specific performance is possible. Nonetheless, in civil law systems, a public remedy for breaching contractual obligations is equal to the execution of the specific performance and the termination of contract as well as considering damages as exceptions.
A group of experts in economic analysis of contract law emphasize the efficiency of the precedence of executing the specific performance. To prove their theories, they have cited the neutrality principle and the reliance on the contract as well as the moral obligation of adherence to the obligation. To explain these reasons, it must be pointed out that (1) according to the neutrality principle, the legislator must foresee the remedies of breach of the contractual obligation in a manner that the promisee would remain absolutely neutral between the execution of the specific performance and its termination, in which the precedence of the former on the latter could place the promisee in such a situation; (2) Given the principle of reliance on the contract, both parties would trust the execution of obligation by one another and consequently, various costs would be at stake. Hence, with the precedence of executing the specific performance, such a reliance can be supported while wasting the costs of trusting a contract can be avoided as the execution of obligation is prioritized; (3) According to a common view, morality requires both parties to remain faithful to the obligation and a contract breach is frowned upon. As a result, the precedence of executing the specific performance can terminate motivations toward the breach of contract.
In return, the most important reasons put forth by the advocates of the efficiency in the precedence of termination of contract against the specific performance include the principle of promisee’s self-reliance in the remedy of contractual obligations as well as the fact that such contractual remedies lead to motivation. Consequently, (1) according to the self-reliance principle in contractual remedies, both parties should foresee the probability of the breach of contract with regards to the contractual conditions and states, hence, the contractual remedies must provide self-reliance to both parties when faced with a breach of contract; (2) Based on the principle of providing motivation via contractual remedies, they must be predicted in a way that both parties’ motivations would remain intact in case of perform or breach as well as the payment of damage; meanwhile, with the precedence of executing the specific performance, the promisor would not be motivated to perform or breach the obligation as it must be performed in any case, and the promisee also would not have any motivation to mitigate the damages inflicted upon himself in case of a contract breach.
Considering the methodology of the present study, the authors will employ a combination of methods including explanatory (stating the reasons put forth by both parties regarding the efficiency of the precedence of executing the specific performance or termination of contract), analytical (presenting the selected theory, given the examinations and expressed reasons), comparative (comparison between Iranian and American Law), and formal (difference between the characteristics of contracts concerning the priority of executing the specific performance or the termination of contract). Albeit, given the requirements of the main approach in this paper, first an economic analysis must be employed and eventually, its results must be explained using the aforementioned analysis.
An impediment expressed toward the reasons put forth by the advocates of the precedence of the execution of the specific performance or the termination of contract and the payment of damage is that, overall, the precedence of the execution of the specific performance or the termination of contract cannot be accepted unless it is done according to the contracts’ characteristics such as being regular, consumable, or commercial. The result obtained from the comparative theory is a combination of the reasons put forth by the advocates and the opponents of the precedence of executing the specific performance over the contract termination which is more compatible with the economic components such as efficiency, efficient specification of resources and their optimal usage, increase in social wealth, and the internalization of foreign expenses resulted from the breach of contract.
According to the formal theory, in regular contracts with the subject of transporting present goods, the precedence belongs to the execution of the specific performance; however, in regular contracts with orders on manufacturing goods and providing services, the promisee must be able to choose between the necessity of executing the specific performance or termination of contract. Furthermore, in consumable contracts, the precedence should also belong to the execution of the specific performance, while in commercial contracts, the termination of contract is prioritized.
Given section 2 of Article 716 in the Uniform Commercial Code presented by American legislators, the execution of the specific performance is not accepted as a general remedy of the breach of contractual obligation and, the precedence of executing the specific performance over the payment of damages are taken into account with regards to the certain conditions and states of both claims, leaving the final authority to the judge. As a result, contemporary legislative developments are inclined toward accepting the formal theory on the precedence of executing the specific performance or the termination of contract.
In addition, the factor proving the efficiency of the formal theory is that contractual remedies of necessitating the execution of the specific performance and the termination of contract are closely connected to the majority of legal institutions such as the civil liability of a third party intervener in breach of contract, efficient breach of contract, the rules of the game concerning contract execution/breach, and the ability to accumulate contractual remedies. In this regard, the precedence of executing the specific performance would prevent the realization of these institutions. Meanwhile, accepting the formal theory would provide the context to the Iranian law in which such institutions are realized.
Sam Mohammadi; Majid ABBAS TABAR FIROOZJAH; Ali Sedaghati
Abstract
The purpose of legal rules and procedures is to regulate social relationships and maintain order in a community to pave the way for economic and social improvements. Based on this, legal rules are to be adaptable to different contexts, and the legislator is to be well-aware of the realities of the society ...
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The purpose of legal rules and procedures is to regulate social relationships and maintain order in a community to pave the way for economic and social improvements. Based on this, legal rules are to be adaptable to different contexts, and the legislator is to be well-aware of the realities of the society and observe them carefully. Rules and regulations concerning unauthorized transactions, which have been dealt with in the Iranian law since a long time ago, are established based on the assumption that supporting the owner would lead to the prevention of theft and fraud. Accordingly, the rules associated with unauthorized transactions set the principle that no one can grant nor sell anything that does not belong to them whatsoever. This principle has enjoyed great integrity and use in the past, now, however, the world of business calls for a change due to the transformed nature of trades and transactions which clings on the decision-making speed.
This paper aims to investigate the ineffectiveness of the rules and regulations concerning unauthorized contracts from philosophical and economic points of view. To do so, first we will deal with the issue of Domain of Knowledge, which posits that knowing the real owner is not logically possible for the potential buyers. Alternatively, we will illuminate the notion that the principle of Yad (the principle which considers the owner to be the one who currently possesses the possession) in the realm of contracts is closer to the theory of appearance comparing to the rules concerning unauthorized transactions. Finally, we will analyze the issues at hand from an economic point of view to see which one can maintain the transactional order in a society.
In this day and age, it goes without saying that human cannot grasp the naked truth, and can only resort to the appearance of things. Knowing this, it is obvious that no potential buyer would be ensured of the real owner, so the transaction is to be carried although there is no way to know whether the seller is the owner of the possession or not. The transactions are chiefly done based on a mere conjecture rooted in the compelling evidence showing that the possessor is the owner. In other words, people cannot be expected to thoroughly investigate the ownership of the seller before a purchase; however, they are to look for it to a standard minimum extent so as to know the owner and observe the principle of speed in the transactions. That is why people would always trust the appearance of things and regulate their behavior based on that. In view of that, the rules concerning unauthorized contracts impose responsibilities on people which are beyond their capabilities. Legal rules and procedures should be set in accordance with the common behavior of people. Otherwise, transactional order would disturb and people would always be in stress whether the possession they have purchased belonged to others or not.
The documents regarding the principle of Yad do not accord with the interoperations given for this principle. One instance of the documents, which is used a lot in fatwa-decreeing (religious decrees), is the one related to Hafs Bin Ghayas, in which the Imam has used certain terms [لولم یجز هذا لم یقم للمسلیمن سوق] to justify this principle indicating the transactional order. This would only make sense if we believe in the validity of an authorized transaction. The main evidence of this is the principle of common sense (manner of the wise). The common sense does not consider an unauthorized contract to be nullified and calls for more evidence in this term.
In an economic examination of the issue at hand, the acceptable rule concerning unauthorized contracts is to be the ones which reduce theft and crime in the society, and impose less cost on the parties. Executing the rules concerning unauthorized transactions and supporting the owner would increase the negligence on the part of the owner and thus impose unnecessary costs and problems on people who have not made any mistakes. On the other hand, in case of executing the theory of appearance and supporting those who trust the appearance, the owner would be more careful and avoid negligence in cases like not registering the transaction, and he/she would protect his/her possession; secondly, the buyer would be more meticulous in knowing the real owner to be later supported by the law. This happens because the commodity will be given to the purchaser in good faith. In this way, we will observe both transactional order and a reduction in the possibilities of theft and fraud, and thus an acceptable social security will be seen in the society. In addition to this, the acceptance of the rights of a purchaser in good faith will enable the parties to sign a given contract after conventional examination of the ownership. However, in case of mere supporting of the owner, buyers should do more than the conventional examinations, and investigate to see whether the seller is the real owner or not. This would reduce the contract costs and, as there is no way to know the real owner, would undermine trust in the market and thus it will lose its credit, which is of great importance economically speaking.
The purpose of owning a commodity is no just the mere possession of it, but the usages it can bring. Accordingly, insisting on the tangibility of the concept of ownership is kind of neglecting the truth. It is because by an appropriate compensation, the owner will get back what he/she has lost. Accepting the theory of appearance would dismiss many of the legal rules; however, we should bear in mind that the aim of legal rules is to meet the demands of the society, and currently the society calls for it. What is actually practiced in the society is based on supporting the ones who trust the appearance, while the law has not provided an answer for this yet.
