Scientific research
Amin Jafari; Mostafa Bikaran Behesht
Abstract
Extended Abstract: Introduction Many governments use the Privatization process to promote their economic system. This process can have a great impact on banking sector. The need for a research in Privatization’ programs, implemented by many developed countries, is felt today more that ever ...
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Extended Abstract: Introduction Many governments use the Privatization process to promote their economic system. This process can have a great impact on banking sector. The need for a research in Privatization’ programs, implemented by many developed countries, is felt today more that ever before. In the state-owned banking system of Iran, there are only 4 banks which are considered as “private banks” The next phase of the privatization of the Iranian banking system will shift a wide range of state-owned banks to the private banks. There are many ways to privatize, and each country has its own set of methods depending on the economic structure and type of enterprises. The most common methods of privatization in the world are: a. Offer shares to the public b. Offer shares to specific groups c. Separation of unit's subject to transfer to smaller units and transfer of ownership or management d. Attracting private sector participation in new investment required by governmental units e. Transfer of Management or Lease of Assets The beneficial effects of privatization can only come from properly implemented privatizations. The key is how to privatize? The World Bank recommends in a circular for privatization: The legal framework of the country should support privatization in two respects: First, there may be laws required in the process of preparing banks for privatization and transactions; Second, the overall legal environment should be one in which newly established entrepreneurs can access credit, and compete on an equal footing with the remaining government. There are three types of transfer methods in Iran: a. Sales through the public offering of stock in domestic or foreign stock exchanges b. The complete sale or supply of block shares through public bidding c. Complete sale or block sale through negotiation Theoretical frame work This article will examin different challenges of implementing the privatization process to provide the most adaptable privatization model for Iranian banking system So, what are the legal requirements for the privatization process in a way the banks can benefit from this process? Methodology This research is under the study of public economic law. From this perspective, although from a methodological point of view, this field does not analyze economic phenomena, the framework of formative interpretations of conventional legal rules in traditional and sometimes Iranian civil law will not be considered. This is because the legal tools of public economy include a wide range of legal regulations and practices and various issuing authorities and focus on the interrelationship of economics with realistic law. In other words, the banking law system created in the context of economic law, will focus more on managerial and sometimes non-legal analysis, which is defined in line with legal and economic issues. Results & Discussion Nowadays, the function of privatization has become a tool to create a complex ownership structure in privatized banks. While government is taking control of the transferred banks, the process of privatization seems to be far from being realistic. Having said that, the process of privatization can be realized by reducing the role of the government in economic activities and promoting the efficiency and productivity of the banking system. However, it is important to bear in mind that the banking system in Iran is still under control of the government. Therefore, it is important to examin the nature of governance in the privatization process. Generally speaking, privatization of enterprises should take place through the public offering. But when there is no purchase after two auctions, privatization is permitted through negotiation and after the board approvals. lack of capacity of the non-government sector is the main reason for the privatization process of the banks that happens through any other ways rather than public offering. But, in such an economy where its main part is dominated by the public sector, how small private sector can take control of the large public sector? The challenges experienced in the first wave of privatization showed that failure to use proper privatization methods can have a devastating effect on the future of the banking industry. Therefore, choosing the right method for privatization is very important. In our country, the privatization of banks not only has not reduced the economic problems, but also has increased the problems of the banking industry and the national economy. Therefore, we need to use this experience and apply alternative ways to reconsider the privatization process and empower the private sector in a way that it becomes the dominant part of the banking industry. Conclusions & Suggestions Privatization takes place through transfer of ownership and management Due to the lack of sufficient liquidity for the buyers in the country, the first method was not successful. In this regard, the transfer committee has decided to privatize the banks in the first wave of privatization through non-public offering. However, it has not achieved the goals of privatization. On the other hand, regarding different challenges of the Iranian bankning privatization we can considere changing of methdoes and approaches at this field in both regulatory system and the banking actors. For the last one, it could happen by downsizing of banks through the transfer of assets and subsidiaries, as well as the use of bank management transfer methods to empower the private sector for buying. bank shares.
Scientific research
Mahsa Bahadoran-Baghbaderani; Ahmad Mohamadi
Abstract
Extended Abstract Introduction A contract that has highly attracted the owners of industries, private employers, and even the public sector in recent ten years in Iran is the engineering fixed-price contract, complete project supply contracts, construction provided the project be financed by the ...
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Extended Abstract Introduction A contract that has highly attracted the owners of industries, private employers, and even the public sector in recent ten years in Iran is the engineering fixed-price contract, complete project supply contracts, construction provided the project be financed by the contractor or engineering, procurement, construction, and finance (EPCF) contracts. Under this contractual term, a comprehensive agreement is compiled by combining two separate yet completely associated parts. One part includes the statement of work, the executive operation of the project, work methods and standards, inventories, commodity-procurement sources, technical plans and documents, required equipment and instruments, and other conventional elements in the EPC contracts. The other part encompasses the conditions, methods, and financing mechanisms. Theoretical Frame Work The EPCF contracts were officially introduced to the ground of various types of service agreements in 2012, following the official dispatch of “guidelines for the use of EPCF in selecting qualified firms” by the Deputy Minister of Petroleum for Trade & International Affairs. Despite its simple structure, this contract is regarded as an innovative type of contract in Iran. However, due to the multiple ambiguities and deficiencies caused by the regulations appertaining to the preparation of this type of contract, it has been subjected to several restrictions in the tendering process and execution of the contract. Regarding the popularity of this type of contract, if the said restrictions are neglected, they can both prolong the negotiation process and create some unsolvable legal and financial problems. Methodology The present study was conducted using a descriptive research method and incorporated the data with quantitative-qualitative nature. The key restrictions of this type of contract in terms of foreign investment and international project financing were legally discussed in this study, considering the written and legal documents (i.e., EPCF contracts belonging to Isfahan Mobarakeh Steel Company), face-to-face interviews with the EPCF experts, and asking them for their opinions using Likert survey questions. The study also addressed the ranking of these restrictions in the pre-assessment of the EPCF contracts compared to other usual commercial contracts. Finally, having interviews with those working in the field of EPCF contracts and considering the specific nature of the contract, the present work attempted to identify, analyse, and describe the relating problems. Results and Discussion The study was carried out on the 60 contracting institutes. It was demonstrated that these contracts have not been practically very efficient in Iran, despite all their advantages, and ten years after their initial drawing up and application, contractors and employers still have no positive attitude towards this type of contract. Indeed, based on our findings, the main existing obstacles before the investment through EPCF contracts include: failure by the Management and Planning Organization of Iran (MPO) to draw up fair EPCF contracts, the transfer risk of the change in values, the contractor is responsible for the transfer risk of unpredictable items at the end of the project [as stated by contractors], no prediction for the excitation of the said contract by holding the tenders by the governmental organisations and the prolonged contract financing [as stated by employers], and in some cases, the inability of the contracting organisation for financing from the beginning to the end of project. Besides, there are some other problems, for instance, this contract is not recognized and prevalent for financing by foreign parties, the fixed-price EPCF contracts, early repayment following the opening of the project by the executors, financing supervision by the executor carefully , the timing of capital injection into the project, ambiguity of the financing method in the contract (organisational/project), and failure to offer proper and acceptable guarantees to the financing institutions. Compared to other prevalent commercial contracts, the EPCF is the most challenging among service/investment-based contracts. Conclusions and Suggestions To eliminate the existing restrictions in the EPCF contracts, some of the issues were presented here as the research proposals, including failure by the Management and Planning Organization of Iran (MPO) to draw up fair EPCF contracts to better clarify the aspects and functions of this contract to contractors and Iranian and foreign financing institutions, modification of the definitions provided in the guidelines for the use of EPCF system in the selection of the qualified firms by the syndicate and legal authorities in line with the integration of institutional or project financing methods, determine the possibility and impossibility of referral to the assets of employer by the EPCF contractor, modification of the mechanisms of granting of guarantees to the contractors and the financing institutions and observance of the motivations of a third contractual party to the EPCF contracts (i.e. the financing institution) to improve the attractiveness of EPCF contracts for investors, taking into account the sanctions related to dispossession or reimbursement of the procured financial resources after project profitability to prevent any intentional delays by the contractors, etc. The findings of this study can provide certain implications to investors, lawyers, parties involved in the EPCF contracts, firms acting to conclude development contracts, and procurement counselors in signing the study contract.
Scientific research
Hassan Badini; Farnaz Forouzan Boroojeni
Abstract
Extended Abstract Introduction According to studies in the field of development, in the process of achieving economic development, "Law" should also be called for. Therefore, lawyers have a prominent role to play along this path. One of the most important legal institutions in question is the ...
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Extended Abstract Introduction According to studies in the field of development, in the process of achieving economic development, "Law" should also be called for. Therefore, lawyers have a prominent role to play along this path. One of the most important legal institutions in question is the evaluation of the two areas: property law and contract law. In this, the institution of property is at the forefront and the entry of the institution of property is also the principle of "Numerus Clausus of Property Rights". Thus, in the process of extracting the underlying principles of the legal institution of property, "Numerus Clausus of Property Rights" is considered as the first fundamental principle. According to the mentioned principle, the choice of individuals to own property is possible only in the "limited number" and also in the "specific contents" identified by the legal system. In the meantime, understanding the economic foundations of this principle is important because of its role in the path of economic growth and development. Theoretical frame work Given that fundamental analysis and interdisciplinary studies lead to the development of a legal perspective, the extraction and analysis of the foundations of effective legal institutions in the process of economic development is important. One of the effective approaches in legal research is economic analysis, which along with legal analysis helps to reform and develop legal principles. This article seeks to analyze the principle of "Numerus Clausus of Property Rights"; what is crystallized in Article 29 of the Civil Code of Iran. In the meantime, its economic analysis is considered as an introduction to understanding the participation of law in the call for economic development. In this way, it is written in two parts: The first part describes the "Numerus Clausus of Property Rights" and its elements. The second part presents the legal and economic analysis of the mentioned principle. In this regard, economic analysis has been proposed with the aim of "efficiency" and "reducing transaction costs". Methodology This study attempts to answer the main questions of this research based on the descriptive-analytical method by analyzing various theories presented in the field of law and economics. In describing and analyzing the mentioned principle, examples of the Iranian legal system have been used. Results & Discussion The entrance gate of the property institution is dedicated to the Numerus Clausus of Property Rights Principle. As a result, a person cannot acquire whatever he wants in any way. Rather, he is required to proceed in accordance with the discretion of the legal system (statue and precedent) and to choose between "limited numbers" and "specific provisions". In the Iranian legal system, Article 29 of the Civil Code of Iran is one of the most important examples of the Numerus Clausus of Property Rights Principle. The analysis of this principle shows that the application of "Numerus Clausus principle" in a flexible format can bring order and predictability to motivate market participants in carrying out economic activities. Conclusions & Suggestions This article concludes that it is necessary to application of the "Numerus Clausus Principle" in the property institution. Because this principle contributes to the prosperity of the market and creates a favorable environment for economic growth and development. Of course, it should be noted that the application of this principle must have the capacity to adapt to market needs. So, it must have a flexible position. For example, we can point to develop examples of security of property, including debt and intellectual property; which helps to increase investment and increase business transactions. In this regard, the question that has been answered is why it is necessary to apply this principle? Lawyers believe that this principle provides legal certainty that is effective in promoting freedom of ownership and the free movement of goods. Legal certainty indicates what property rights can be owned and which of them can be traded in the market. In this way, the market actors can understand a kind of predictability and expectability; this leads to an increase in the motivation of economic actors to participate in the market. As a result, with more actors and more transactions, the market thrives and ultimately economic growth and development is achieved. The issue was also analyzed from the perspective of economic law and it aims to "efficiency" and "reduction of transaction costs": The first analysis based on "preventing a reduction in efficiency", calls for a "ban on the extreme fragmentation of property rights." The second analysis based on "prevention of externalities", emphasizes the issue of "reducing measurement costs". In the end, the third analysis based on "prevention of mistakes and opportunistic behaviors", describes the concept of "common understanding" of individuals in relation to their property rights. Thus, all three analyzes emphasize on the necessity to identify the types of property rights and their contents by legal system. Finally, it is recommended for the Iranian legal system, while maintaining the "Numerus Clausus Principle" in the property institution, to take a more flexible approach in responding to market needs and identifying new property, including in the field of identifying the subject of mortgage contract.
Scientific research
Fatemeh Kiaee; Hassan Rahpeik; mahmood bagheri
Abstract
Extended Abstract Introduction Applying general bankruptcy rules to banks might cause many legal problems. Distinct characteristics of banks and their important role in the financial system makes many countries use the recovery institution in order to prevent the banks’ bankruptcy. The assessment ...
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Extended Abstract Introduction Applying general bankruptcy rules to banks might cause many legal problems. Distinct characteristics of banks and their important role in the financial system makes many countries use the recovery institution in order to prevent the banks’ bankruptcy. The assessment of Iran regulations shows that any comprehensive laws of recovery have not ever legislated, hence it seems necessary to enact efficient laws in this regard. Due to the distinct social, economic, political, and legal characteristics of countries, it is not possible to provide a consistent model for recovery regulation in all countries. Moreover, translating and copying from other countries should not be utilized to formulate recovery regulations. Therefore, adoption of recovery institutions requires it to be completely analyzed and investigated. Theoretical frame work This study on the one hand explains the concept of recovery and introduce the most common methods of recovery. On the other hand, it analyses the Iranian regulations in the field of bank recovery and reviews the practical recovery examples in Iran and evaluates their efficiency. Finally, by understanding the legal nature of each recovery method, the one with correct legal basis according to Iranian law (i.e. appropriate to be adopted in Iran) is determined. A legal model that is consistent with the legal principles of Iran is consequently proposed Methodology This study attempts to answer the main questions of this research based on the analysis of the legal nature of the recovery. It investigates the possibility of adopting the recovery models in Iran by criticizing and comparing various statutes, regulations, and legal doctrines of different countries. Results & Discussion Bankruptcy is a judicial process that only considers the rights of creditors neglecting public benefit. Recovery, on the other hand, is an administrative process with the aim of allowing bank depositors to continue to meet their liquidity needs by accessing banking services. In addition, in this process, the bank's assets are managed in such a way that the value of the insolvent bank is maintained. In this paper, three widely used methods of bank recovery, which are mergers, purchase and assumption, and payments through the Deposit Guarantee are examined. Regarding the difference between the merger method and the purchase and assumption method, it should be noted that the latter involves the purchase of the insolvent bank’s assets and the acceptance of its liabilities, while in the former, the insolvent bank shares are sold and solvent Bank becomes the deputy director of the insolvent bank. In addition, in the purchase and assumption method the legal personality of the insolvent bank does not disappear, but in the merger model, the legal personality of the insolvent bank disappears by merging with the solvent bank. On the other hand, the difference between the payments through the Deposit Guarantee Fund and the merger model is that the assignment of the bank commitment to the fund does not remove the contractual liability from the bank. This fact is in contrast to the merger method, which is based on the transfer of the contract. In the Deposit Guarantee Fund, the insolvent bank is still recognized as a party to the contract with depositors. However, in the merger method, the legal personality of the insolvent bank is completely reserved and the solvent Bank becomes its deputy. Conclusions & Suggestions In this paper a recovery model consistent with the legal principles of Iran is proposed. It is shown that the preparation of the Bank Recovery Law should not be merely an imitation and requires an analysis of the legal nature of recovery methods. The proposed model for Iran, through the mergers as well as purchase and assumption methods, is a bilateral legal act (contract). Similar to the legal systems of some other countries, namely, US, Switzerland and Canada, the permission of debtors and creditors of the bank is not part of the basic structure of the proposed recovery model. However, the imposition of this plan on creditors can only take place if the proposed recovery plan is perfectly appropriate and in the interests of the creditors. The proposed legal model, if payment is made through the Deposit Guarantee Fund, is inherently a contract that is made solely by the will of the Deposit Guarantee Fund. Thus, there is no need for the permission of the depositors and the insolvent bank, because the bank's permission is not a condition for its validity and only deprives the fund of referring to it. In the model, the central bank or deposit guarantee fund is considered as a supervisory authority over the banking system. This authority, based on the estimated costs and conditions of the insolvent bank, takes into account the order of priority i.e. mergers, purchase and assumption, and payments through the Deposit Guarantee Fund. It then applies the proposed model to prevent the bank from going bankrupt. The adoption of an inconsistent law of recovery from other countries, in addition to its social, economic and political effects, could confuse and frustrate the legal system. Therefore, the development of efficient regulations in accordance with the nature of the recovery methods based on the proposed approach is of great importance in the Iranian legal system.
Scientific research
Saeed Mohammadi Aghdam; Ebrahim Dianatinasab
Abstract
Extended Abstract Introduction Financial markets are the markets which conditions are changing quickly with considerable intensity compared to the other markets; therefor, policy makers have to adjust their appropriate decesions and strategies based on that circumestances with the use of accurate ...
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Extended Abstract Introduction Financial markets are the markets which conditions are changing quickly with considerable intensity compared to the other markets; therefor, policy makers have to adjust their appropriate decesions and strategies based on that circumestances with the use of accurate and multilateral cognition. Designing instruments in practice, is one of the status of the changes. This change could lead to competition during the time and the variables capture a number of possible determinants of effective competition in different formats like size, types of orders, trading infrastructures, execution procedures, acceptance and listing at the domestic or international level. More importantly, that competition among market centers appears to lead to specialization and fragmentation not convergence to a single artichecture. (Lipson, 2003) That means everything that could intensify competition like listing could be useful. Theoretical frame work When the firm decides to fund raised, it has to pass general stages in finincing chain, include get the regulator's license about addmision companies' symbols, listing, initial public offering and finally secondary transactions. Each level has its own requirements and regulations. This article aimed to study and review the listing stage. Cross-listing is one of the listing types and is known as listing a security on more than one exchange and leads to increase the competition for bid and offer prices, the liquidity of the securities, the length of time in trading, (The NASDAQ Listing Rules), bonding, more fund rasing, price making, reputation.(Miao, 2012) These effects could transfere between exchanges inside or outside of the countries. Methodology In this research, reviewing the financial aspects of the phenomenon is the first stage, then we cover the rules and documents of the research by using analytical-interpretive method based on compliance with the nature and regulatory elements in the Iran and United sates of America. this methodology was done base on the logic of the comparative studies. Results & Discussion Practicing of the cross-listing depends on the adoption of different approaches, each of which has its own dimensions and effects. According to the first approach, regulator treat with a foreign applicant similar to a domestic company, despite of exceptions and exemptions in certain circumstances. Based on the second approach, known as subsituted compliant, based on the structural and regulatory similarity, the regulatory regime of the counterparty recognizes structural and regulatory similarity, if there is no conflict with internal regulations, it was accepeted. All in all, in this regime, some jurisdictions do not apply all local requirments to foreign intermediaries that engage in cross-border transactions with sophisticated investors from the host jurisdiction. The third approach is known as licensing transactions under a memorandum or international - institutional guidelines and standards which both countries are defined and accepted. It means, some jurisdictions utilize a system of unilateral or mutual recognition to deciede whether to apply local regulations to a foreign intermediary. Based on this regime, a jurisdiction generally will not apply local requirements to a foreign intermediary if the home regulatory regime to which that intermediary is subject meets certain investor protection criteria. A mutual recognition system is similar to unilateral recognition system in that the "access" jurisdiction recognize the adequacy of a foreign intermediary's "home" regulation. (IOSCO, 2004) Conclusions & Suggestions Cross-listing of securities has its own complexity with multilateral aspects in theroy and practice. In the Iranian capital market regulatory ragim, there is just mention the concept of cross-listing and dual-listing but in practice no action was done. Regulatory institution should cover fund-rasing chain by taking some steps, including define the initial public offering and secondary foreign investment transactions in the law and regulations. They sould pay attention to technical-regulatory considerations at regulatory levels, including the encouragement and protection Law, Foreign investment and related regulations, foreign investment executive regulations in stock exchanges and over-the-counter markets, various offer and registration instructions, transactions and disciplinary, and various dispute resolution procedures in the regulations. Subsequently, according to the capital market reaulation of iran, lisint of foreign securities and their transactions are within the competence of the Supreme Council of the Stock Exchange. Thus, in the second phase as the executive status, this institution can choose a similarity approach to domestic companies and increase exemptions in order to facilitate fund absorbtion and trading activitybeside that, it should be noted that the application of exemptions should be done in terms of the nature of the exemptions so as not to damage the elements of the main regulations such as commercial law or capital market law. It also has to consider general and spicific of the structure of the Iranian securities market including institutions, instruments, legal systems and regulations. In this regard, the Supreme Council of the stock exchange should classify different requirements in order to be compatible with the structure of the capital market and the general and specific legal systems and select the cases that may be exempted in term of the legal system of the target market. In addition, in case of structural and regulatory similarity, exceptions or exemptions may be applied to issuers, traders / brokers or foreign investors while contracte a memorandum of cooperation. In addition, sould be behave with those exchange that are joint members of an international institution such as the World Federation of Exchnage or IOSCO according to the standards and principles of the relevant institution. Finally, in order to solve the various challenges of this phenomenon, it has to sign the Memorandum of Understanding and state all the financial-legal considerations in the clauses of the Memorandum of Understanding in terms of different norms and technical requirements. In the near future, Iran has to consider this ability in practice and adjust its regulation and structure to be in conjuction with its consideration and chractristics and it has to improve its cognition about that
Scientific research
Mohsen Shamsollahi
Abstract
Extended Abstract Introduction Non-compliance with the disclosure requirements in the securities market incurs losses to investors such as the denial of informed decision making and stock trading at artificial (inflationary) prices. Causation between the harmful act and the loss is one of ...
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Extended Abstract Introduction Non-compliance with the disclosure requirements in the securities market incurs losses to investors such as the denial of informed decision making and stock trading at artificial (inflationary) prices. Causation between the harmful act and the loss is one of the main elements of civil liability, and compensation of investors’ losses is subject to causal relationship between the breach of the securities disclosure requirements and the loss suffered. However, there are numerous factors affecting investor decision making and the price of securities and it is not possible to determine what part of the price change is due to the violation of these requirements. This is the main reason that in Iranian Law Article 43 of the Securities Market Act (in relation to the primary market) has not been enforced until now, and in practice, despite widespread violations of disclosure requirements in recent years, the losses derived from violating of these requirements has not been compensated. Therefore, this article will examine the comparative approach to the question of what strategies are available to facilitate establishment of causation in civil liability cases for violation of the legal requirements regarding information disclosure. In summary, it seems likely to be helpful in these lawsuits providing a judicial or legal presumption about the causation between securities price differences over a specific period of time and violation of the disclosure requirements. Theoretical framework given the specific characteristics of the securities markets (where there is a risk and probability with a significant role, and always a degree of uncertainty), and the particular conditions for Civil liability (such as the need for a certain loss and the need to establish a certain causal link between the harmful act and the harm), the possibility of applying civil liability rules for compensating the damages caused by the violation of disclosure requirements is Doubtful. In this article we want to examine the legal ways for establishing a causal connection between violation of the disclosure requirements and the loss of investors. Methodology The research methodology of this paper is an analytical method and the subject will be studied comparatively (both in French and US law) in order to discover the legal ways for establishing a causal connection between violation of the disclosure requirements and the loss of investors. Results & Discussion The application of civil liability rules in these cases is faced with legal barriers, mainly due to the difficulty of proving the causation between violation of the disclosure requirements and the loss of investors. In fact, what is related to civil liability is that failure to comply with information disclosure requirements has led to a loss to the investor, and in cases where the investor has suffered losses from adverse market conditions, this loss will not be recoverable. So, the main problem with civil liability is that it can’t be determined how much the damage inflicted on the investor results from a breach of the disclosure requirements and how much of this loss derives from the venture risk. This will be a serious obstacle to obtaining a causal relationship in these cases. Conclusions & Suggestions For resolving legal problems against civil liability derived from violation of legal disclosure requirements in the securities market, it is necessary to anticipate certain mechanisms such as establishing the presumption of a causal relationship. So, concerning the establishment of a causal relationship and a certain loss I will propose a presumption upon which in the event of a breach of the legal requirements of the disclosure of information, all price changes that occur on the date of disclosure of incorrect information are caused by false information. In contrast, in Iranian law despite French law, it does not seem possible to apply the theory of loss of opportunity in these cases. This is because the theory of loss of opportunity in Iranian law is a nascent theory and has not yet been accepted by the legislature or the judiciary. So the acceptance of a particular interpretation of this theory in civil liability claims for breaches of information disclosure requirements based on the loss of an abstract opportunity seems far-fetched in Iranian law. In particular, the application of this theory to the disputed claims in French law itself has been severely criticized in various respects, such as its inconsistency with the principle of full compensation.
Scientific research
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.
Scientific research
َAli Saffary; Razieh Saberi; Aref khalili Paji
Abstract
Extended Abstract Introduction Money in the sense of a tool for exchange has a long history. The use of commodity money, mintage of metal coins, the printing of gold-backed banknotes, and finally the formation of unsupported banknotes can be considered as a summary of the evolution of money in ...
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Extended Abstract Introduction Money in the sense of a tool for exchange has a long history. The use of commodity money, mintage of metal coins, the printing of gold-backed banknotes, and finally the formation of unsupported banknotes can be considered as a summary of the evolution of money in national and transnational monetary systems. The current monetary system was established in all countries after the transition to the Bretton Woods system and the formation of "unsupported money". Despite the development of commercial and economic capacity in the area of the new order emerging from the global economy, this order has always been the focus of fundamental criticism by critics of the status quo because of its harmfulness. Inflationary nature of unsupported money, lack of intrinsic value, ill distribution policies and its transformation into a tool in the hands of governments to impose policies that have detrimental consequences for the middle and poor class people, mismanagement of existing regulators leading to economic crises, the negative consequences of which are also borne by the mentioned class, form the axis of criticism of the new monetary order. Altogether, these form a range of ideas, from reforming while maintaining the existing structure to transformational and revolutionary ideas to overthrow the existing order and to establish a new alternative. Hence, the provision of models to modify the status quo or to replace it, at least at the academic level, has been a topic for debate. The economic crisis of 2008 and the introduction of the new technology of "Bitcoin" as an alternative or virtual currency, with the function of money or payment system, paved the way for the creation of new dimensions that a year later, i.e. in 2009, with the beginning of its use, has attracted more and more attention which necessitate the need to change the current situation. Theoretical frame work Virtual currencies can be considered as influential actors and messengers of fundamental developments and changes in the field of technological exchanges, which with the completion of the independent financial chain, on the basis of blockchain technology, has rung the alarm for a new stage of democracy in the context of financial democratization. Consequently, the various dimensions of this technology, obvious and hidden features of Bitcoin and its various capacities have been the subject of political, economic, legal and criminological discussion. In each of these fields, thinkers have evaluated this emerging technology from their own point of view and expertise, in terms of its different use, functionality and capacity. In this context, the unique features of virtual currencies intriguing different criminal activities have been considered by researchers in criminal law and cyber criminology. Traditionally, research on cyberspace from a legal and criminological point of view indicates the existence of features that have always made this space a suitable platform or an effective means of committing a crime. Virtual currencies are also used as a technological tool in the virtual space context. In this regard, the unique features of this technology and its combination with some other technologies in the context of cyberspace have created additional attractions that have attracted the attention of criminals more than ever. Methodology The present paper tries to offer a comprehensive criminological analysis of the important dimensions of virtual currencies by a deep and critical review of the existing literature based on some existing theories with descriptive and analytical methods. The review includes studying the scope of criminal activities related to virtual currencies and attractive criminal features of this technology. An analysis of criminological etiology and providing preventive solutions against criminal risks of virtual currencies is another dimension of this study. Results & Discussion The salient features of virtual currency technology; such as flexibility and anonymity of identity, the potential to be used transnationally, in addition to facilitating exchanges and conventional uses, can lead to potential and actual criminal activities. To be concise, virtual currency as a service, facilitates delinquency, increases the number of ways by which delinquent activities can be committed and can create new types of delinquency. Thus, the benefits of virtual currencies, along with all their positive functions, can lead to significant challenges for those involved in, or in charge of the criminal justice system. In this context, the attractiveness of virtual currencies has created an opportunity for criminals to carry out their criminal activities with greater ease and security. Individuals identified as dangerous or high-risk in society can easily replace virtual currencies, as a technological tool that is outside the control of governments, by traditional financial services and instruments, which are explicitly included in the regulatory body, hence reducing the risk of crime detection and increasing the likelihood of a crime being committed successfully. This means that illegal funds or the purchase of goods and services from criminal markets will form easier and securer instruments which, in turn, provides grounds to improve criminal methods. Therefore, despite all the benefits of using virtual currencies, one should not forget negative potential, particularly criminal risks associated with it. This is because cryptocurrencies along with some advantages, are also actively used in criminal activities. Conclusions & Suggestions Few suggestions are made to reduce the criminal effects of virtual currencies. These include legal recognition and determination of the nature of virtual currencies as an asset, providing a specific tax model for virtual currencies, development of hardware and software infrastructure necessary for the safe and controlled presence of virtual currency operators, and finally, continuous monitoring of a system of informing, warning and raising public awareness of the criminal dangers of virtual currencies.
Scientific research
mohsen sadeghi; Atefeh Ajori Atask
Abstract
Extended Abstract
Introduction
One of the essential prerequisites for success in privatization is the implementation of principles governing it. Identifying and introducing these principles to the legislator has the benefit of making legislation subject to a specific policy in the country's legal system. ...
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Extended Abstract
Introduction
One of the essential prerequisites for success in privatization is the implementation of principles governing it. Identifying and introducing these principles to the legislator has the benefit of making legislation subject to a specific policy in the country's legal system. In privatization, according to its nature and objectives, the most important principle to be considered is the principle of monitoring. The necessity of monitoring on privatization is obvious, but what this article addresses is its analysis based on the Principle of Balance of Triple Interests; Because for the privatization to be successful, in addition to the benefit of the parties to the contract, the interests of third parties affected by the contract, including workers of the privatized companies, the consumers of the products of these companies, and on a wider scale, the general public must be considered in the assignment contracts. It is clear that the interests of the government as a party to the contract are respected, and the government has more power to secure its interests because it regulates privatization contracts. For a successful privatization, given the widespread impact of the privatization program on interests of the general public, in addition to securing the interests of the parties to the contract, interests of the general public (consumers) must also be considered. In such a way that after the transfer, goods and services are offered to the people with lower costs and superior quality and the private sector does not abuse the situation and, for example, does not create a monopoly in the market and does not distort competition. To realize this basic principle, other principles are governing privatization including the principle of monitoring, which is examined in this article.
Theoretical frame work
In addition to monitoring the privatization process, the government should not forget to monitor the management of the non-governmental sector after the privatization and should monitor economic activities and their consequences. Therefore in this study, privatization monitoring is examined in two stages; The first stage is monitoring during privatization, which must be done by an independent entity to ensure its health. Ignoring this rule in the “Law on Implementation of General Policies of Principle (44) of the constitution” had had negative consequences and needs to be reconsidered. Second stage is post-privatization monitoring to ensure the implementation of the provisions of the contract by the assignee, and the desired supply of goods and services to the consumers.
Methodology
This study attempts to answer the main questions of this research based on a descriptive-analytical method and tries to analyze various related statutes and regulations with a comparative study.
Results & Discussion
One of the tools for governments to implement the principle of monitoring is the regulation and drafting of standard assignment contracts, which is also foreseen in Iran's privatization program, but it has shortages that need to be corrected. One of the most important drawbacks is the criteria of assignee competence in the privatization process and how they are achieved are ambiguous in most privatization methods and are not accepted by the monitoring systems, which need to be corrected. Another prerequisite for monitoring the implementation of privatization contracts is the provision of necessary legal guarantees. Requiring the private sector to submit activity reports at specified times after privatization, commitment to expand the firm's activities, commitment to increase the company's capital after a specified period are some of the guarantees that the government must obtain from the private sector. The stipulation of these guarantees in the law regulates the exercise of supervision. However, according to the Principle of Balance of Triple Interests, these guarantees should not be made in such a way that the investment incentives of the private sector are reduced and the sector finds itself faced with heavy and unconventional tasks; For example, the commitment that the private sector is required to retain all employees of the state-owned enterprise and to add some staff to the complex each month is an unusual obligation that is included in privatization contracts and should be reviewed.
Conclusions & Suggestions
In this paper, the basis and mechanism of its application are examined, and suggestions are provided for efficient monitoring during privatization and implementation of privatization contracts:
An independent entity must be assigned in the “Law on Implementation of General Policies of Principle (44) of the constitution” to monitor the privatization process.
The criteria for transferee competence in the privatization process must be clearly defined.
For drafting privatization contracts, it is also suggested to add a legal expert to the composition of the transfer board members.
The government must obtain appropriate legal guarantees to ensure the implementation of privatization contracts.
Scientific research
ghasem nabizadeh kebria
Abstract
Extended Abstract For a long time, due to the specialization of affairs and the division of labor in a society, people have to communicate with each other to meet their needs. In view of these widespread and inevitable social changes, the principle of contractual freedom, which is based on assumptions ...
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Extended Abstract For a long time, due to the specialization of affairs and the division of labor in a society, people have to communicate with each other to meet their needs. In view of these widespread and inevitable social changes, the principle of contractual freedom, which is based on assumptions such as the independence of individuals in relation to each other and their equality in contracts, has faced serious challenges. It is the duty of governments to implement this principle, while applying minimal intervention, to provide the ground for the flourishing of creativity and talent of individuals, in order to improve the welfare of individuals and, consequently, society. It is now clear that the assumption of equality and independence of persons in referring and concluding contracts with each other is closer to illusion than to reality (Kauffman and Macdonald, 2004: 4 & Aghion, 1990: 381-385). These changes have caused the principle of contractual freedom to lose its former validity and sanctity in today's law and face serious allocations and restrictions. The main purpose of imposing these restrictions is to restore balance to contractual relations and to establish a just social order. One of the examples of these restrictions is the establishment of "unfair conditions". In this establishment, if an obligation is deemed to be unfair in accordance with the declared legal rules, its imposed effect on the other party (generally weaker) will be removed. In fact, although under the principle of contractual freedom the obligor is bound by such a contract, in practice and according to the legislature, the obligation arising from "unfair terms" will be removed from the condition against it. After the industrial revolution in industrialized countries and before of early years of the present century in Iran and, major changes have taken place in the social status and economic power of the parties to consumer contracts. The diversity of contracts, the complexity of markets, the specialization of knowledge of production, supply and use of goods seem to indicate the lack of complete information and reasonable choice by the weak contracting party (Mainly the consumer). Afterward the weak parties of contracts under traditional contract law have no longer been able to balance their interests and obligations under the contract and allocate the resources efficiently. (Hayek, 2003: 212) In other word, within the framework of traditional contract law and based on the principle of autonomy of contracts, most transactions or contractual terms led to the loss of the weak party and inefficient allocation of resources systematically. (Tajarloo, 2008: 206). These shortcomings in the whole world and in a few cases in Iran, led governments to intervene in these contracts in the form of new legislation about the unfair terms with the new regulations and thus seek to eliminate them. These shortcomings are in fact the disability of the traditional system of contract law to achieve the purposes of political and legal systems, which are stems from the fundamental values and intellectual traditions that govern these societies. Because of the various shortcomings in this area, governments are involved in contracts containing unfair terms based on a variety of principles, including economic efficiency (efficient resource allocation) (Aghion, 1990:382). Therefore, this article tries to study the legislator's intention to classify some obligations as "unfair terms" based on the concept of economic efficiency of contracts. However, principles such as the principle of the rule of wills and the correctness of transactions are still fundamental principles in various legal systems of the world, but today it does not have the scope of its former territory. What has been achieved as a result of the specialization of science and services, widespread social change, and economic and transactional inequalities is the guidance of legal systems toward the delimitation of the territory and the various allocations of the above principles. Unfair terms, which are unfamiliar with the principle of freedom of contract, are one of the most important exceptions to this principle. Identifying and guaranteeing the implementation of such obligations in law is the product of government intervention and public rules in the private contractual relations of individuals. Traditional (formalist) law, which deals only with the external aspect of contracts, cannot eliminate the defect in the market that leads to irrational or unjust choices. Therefore, the legislator's action in enacting laws should be such as to distribute the resources of the parties to the contract in accordance with their accepted obligations. This instrumentalist approach to contract law can eliminate their unjust or irrational obligations. Therefore, it seems that one of the justifying principles of government interventions in the private transaction relations of individuals, in addition to social necessities and ensuring maximum justice, is to reach effective agreements from the perspective of economic analysis of contracts. Studying the limited cases of discussing unfair terms in domestic law, it is understood that if a contract leads to the maximum allocation of its resources to each of the parties at the lowest cost, such an effective agreement will not be subject to legislative intervention. However, it seems that governments and public forces in limiting the scope of unfair terms and, consequently, restricting the principles of validity and freedom of contracts should limit their involvement to the necessary (contract efficiency) to pave the way for the emergence of talent and capacity. Be available in the open market. Introduction Given the rule of free will, traditional contract law cannot always lead to efficient contracts. In unjust commitments, non-interference by the government systematically promotes the position of one over the imposition of excessive aggression on the other. The main question is whether it is necessary to limit this principle based on the economic analysis of contracts? Can the government make a mandatory regulation to adjust the obligations of the parties? Are there examples of economic adjustments of obligations in current Iranian law? Theoretical frame work On the one hand, this study points to the need for government intervention in the contract and the restriction of the principle of free will in unfair terms, On the other hand, legal examples explain the interference based on the economic efficiency of the government in contracts. Finally, the assumption of the necessity of government intervention has been expressed based on the economic analysis of the obligations in the contracts. Methodology This study tries to explain the necessity of efficiency-based intervention by examining the drawbacks of government interference in private contracts and by examining the existing legal examples, to answer the main questions of this research based on a descriptive-analytical method. Results & Discussion The variety of contracts, the complexity of markets, the specialization of knowledge of production, supply and use of goods seem to indicate the lack of complete information and reasonable choice by the weak contractors (usually the consumer). Weak parties to transactions governed by traditional contract law are no longer able to balance their interests and obligations in the contract and efficiently allocate resources. Within the framework of traditional transaction law and based on the principle of freedom of contract, most transactions or contractual conditions systematically lead to the loss of the weak party and inefficient allocation of resources. These shortcomings worldwide and in limited cases in Iran, led governments to intervene in the agreements in the form of identifying unfair terms with the new regulations, and in this way seek to eliminate those shortcomings. Government interference in contracts with unfair terms is based on a number of factors, including economic efficiency (efficient resource allocation). Conclusions & Suggestions Identifying and guaranteeing the implementation of unfair obligations in law is the result of government intervention and public rules in the private contractual relations of individuals. Traditional (formalist) law, which deals only with the external aspect of contracts, cannot eliminate a defect in the market that leads to irrational or unfair choices. Therefore, the legislator's action in enacting laws should be such as to distribute the resources of the parties to the contract in accordance with their accepted obligations. This instrumentalist approach to contract law can eliminate their unjust or irrational obligations. Therefore, it seems that one of the justifying principles of government interventions in the private transaction relations of individuals, in addition to social necessities and ensuring maximum justice, is to reach effective agreements from the perspective of economic analysis of contracts. Studying the limited cases of discussing unfair terms in domestic law, it is understood that if a contract leads to the maximum allocation of its resources to each of the parties at the lowest cost, such an effective agreement will not be subject to legislative intervention. However, it seems that governments and public forces in limiting the scope of unfair terms and, consequently, restricting the principles of validity and freedom of contracts should limit their involvement to the extent necessary (contract efficiency) to pave the way for the emergence of talent and capacity. Be available in the open market.
Scientific research
Mostafa Rezaei; Assadalloh Yavari
Abstract
Extended Abstract Introduction Public Procurement involves a large amount of government economic activity, and because they are financed from the public budget, the principle of transparency must rule to them. Transparency is an important element in public procurement policy and law. Particularly ...
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Extended Abstract Introduction Public Procurement involves a large amount of government economic activity, and because they are financed from the public budget, the principle of transparency must rule to them. Transparency is an important element in public procurement policy and law. Particularly given the socially significant nature of the system needed for the proper use of public money by all public institutions and commercial companies, the basic principles governing such spending should be well defined, and the most important of these principles is transparency. In all aspects of public procurement the public sector can influence the market structure, affect the competitive process between the market participants, and affect significantly the economic behavior of the participants in procurement processes. As a rule, contracting authorities rely on the competitive environment in public procurement to achieve the most efficient use of their budgets. They are interested in buying goods and services at low prices and of high quality, since their resources are usually more constrained than the needs to be met. In a market economy, an effective competitive process can lead to lower prices or higher quality, or more innovation in the goods or services offered. So transparency promotes competition, guarantees equality and equal treatment prevents corruption and achieves legal certainty. Therefore, one of the most important reasons for legislation in this area is transparency. In general, transparency in public procurement includes six rules: 1. Advertising contracts throughout the country, 2. Establishing competition among tenderer’, 3. Excluding tenderer from participating in the tender only for legal reasons, 4. Observance of time periods in different stages of the tender to ensure the presence of all companies in the tender, 5. Awarding the contract based on the results of the competition based on the criteria mentioned in the law and contract notice, and 6. Informing the decisions about the tender to the tenderer. However, despite the fact those more than two decades, enacting of the public procurement law in Iran, an analysis of this law and its regulations in the light of the rules of the World Trade Organization and the European Union show that public procurement in Iran has many weaknesses in terms of transparency. Theoretical framework This study first of all analyzes the relationship between the transparency principle and other principles of public procurement like equal treatment, competition and integrity. Then, the relationship between the transparency principle and confidentiality and protection of trade secrets is discussed. Finally, we focus on elements of transparency in public procurement like a publication of laws and regulations, documentation, a publication of contract notice and contract award notice, access to all information and documents about the process of procurement and access to verdicts of the judicial and quasi-judicial authorities. Methodology This study attempts to answer the main questions of this research based on the descriptive-analytical method by criticizing and analyzing laws and regulations regarding public procurement with a comparative study of European Union and WTO law. Results & Discussion Analysis of laws and regulations regarding public procurement regulations in the light of the rules of the WTO and the European Union show that public procurement in Iran has many weaknesses in terms of transparency, including the lack of obligation to announce cost in the contract notice, lack of clear criteria on the proliferation of newspapers, lack of obligation to inform qualitative selection, the non-publication of regarding regulations and verdicts of judicial and quasi-judicial authorities and lack of contract award notices. So these elements of transparency there aren’t in public procurement law and its regulation of Iran and these rules should be amended. This situation provides grounds for increasing corruption in public procurements and hurts to integrity of public procurements. In addition to, rights of tenderer might be violated in this circumstance. Therefore, in addition to documenting and protection of tenders’ information, it is necessary to inform the public and access information. In fact, the purpose of transparency and documentation is to make people aware of the events so that they can hold officials and executive bodies accountable based on this awareness. Also, information about tenders is important in terms of tenderers' rights in order to ensure the integrity of the procurement process; otherwise they can use this information to claim the right. So, to make transparent of public procurement process, it is necessary to document and inform this process, publish all laws and regulation, publish contract notice and contract notice and all information and documents about the process of procurement and verdicts of the judicial and quasi-judicial authorities is accessible. It should also be noted that transparency governs all stages of the public procurement process and that information about that must be equally available at all times. Conclusions & Suggestions According to Findings of this research is necessary to codify and amend the relevant laws and regulations: contracting authorities are required to announce the cost of the transaction in the contract notice; Instead of publishing public procurement in newspapers, they should all be published in a single official system or journal; Qualitative selection criteria should be announced in the contract notice; The verdicts of the judicial and quasi-judicial authorities should be published in this regard and the contract authorities should be required to publish the contract award notices.
Scientific research
Ali Shahabi; Seyyed Hossein Safaei; Behrooz Akhlaghi; mansour amini
Abstract
Extended Abstract Abstract: Minimal contemplation of damages under Iranian legal and contractual liability systems is the reason leaves the constant temptation of a legal study (compared to other legal systems and the common experiences especially formed in the field of international trade). Consequently, ...
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Extended Abstract Abstract: Minimal contemplation of damages under Iranian legal and contractual liability systems is the reason leaves the constant temptation of a legal study (compared to other legal systems and the common experiences especially formed in the field of international trade). Consequently, review of the methods for evaluation of damages and reconsideration of the notions brought in modern world (with a glance at the economic requirements of the developing countries such as Iran) seems inevitable. Having studied the methods of evaluating the damages caused by non-performance of the obligations in English legal system (as well as exploring the latest studies in this field) and also a number of most reputable international legal instruments such as CISG, Undroit, PECL and DCFR, we tried to support an interpret under Iranian law which goes beyond the current contemplations regarding the damages. Analyzing the economic outcomes of Restitution, Expectation and Reliance methods as well as more recent theories such as Incomplete Contracts and Efficient Breach (besides the studies based on economic analysis of law during the years of 20th century), with due regard to the necessities of the local market and during the short term at least, we can rely on a justifiable basis like Expectation. Extended Abstract Introduction: Minimal contemplation of the institution of damages under Iranian legal and contractual liability systems is the reason leaves the constant temptation of a legal study (compared to other legal systems and the common experiences especially formed in the field of international trade). Consequently, review of the methods for evaluation of damages and reconsideration of the notions brought in modern world (with a glance at the economic requirements of the progressive countries such as Iran) seems inevitable. Theoretical Framework: This study attempts to reconsider, at the very first point, the concept of “actual harm” under the Iranian legal system (as well as the contractual liability system) which leaves a major impact on our economic ambiance. We, as the Iranian lawyers, are acquainted with the phrase “there remain the possibility for the actual harms only to be compensated” (or claimed to be compensated). In light of the modern world progresses (as well as the theories rendered during the same) and the complexities of the relations therein, we have to apparently reconsider the veracity of the said phrase. The point, in our view, is laid in our contemplation of the institution of damages as a remedy for breach which lead us to go beyond the restitution of the aggrieved party’s former status. This is, indeed, the role of economic notions in modern world which enables the similar construes. Methodology: During this article and having studied the methods of evaluating the damages caused by non-performance of the obligations in English legal system (as well as exploring the latest studies in this field) and also a number of most reputable international legal instruments such as United Nations Convention on International Sale of Goods, Undroit Principles of International Commercial Contracts, Principles of European Contract Law and Draft Common Frame of Reference, we tried to support a construe under Iranian law which goes beyond the current contemplations regarding the damages. Results & Discussion: United Nations Convention on International Sale of Goods (“CISG”), having considered the methods for valuation of damages in Articles 75 and 76, has also invalidates both the subjective and objective tests in claiming the damages. In other words, the modern world necessitates to even remove the subjective test in the course of appraisal of damages (as referred in Article 76 of CISG). In addition, other major international instruments have almost paved the same path and approved the methods of “buying the goods in replacement” and “current price of the goods”. This point reveals when we come up with Article 7.4.13 of the Undroit Principles of International Commercial Contracts (“Unidroit”) and compare the same with Article 230 of IRI Civil Code. Thus, the institution of damages is mainly designed to cover the expectations of the parties before entering into a contract and we can, consequently, come to conclusion that “Restitution Basis”, as a minimal construe of the same, shall stand in exterior of the territory of damages. Analyzing the economic outcomes of “Restitution”, “Expectation” and “Reliance” methods as well as more recent theories such as “Incomplete Contracts” and “Efficient Breach” (besides the studies based on economic analysis of law during the years of 20th century), with due regard to the necessities of the local market and during the short term at least, we can rely on a justifiable basis like “Expectation”. Conclusions & Suggestions: Taking the foregoing into account, we have to remark on a few points as follows: 1) The legislator’s approach to the institution of damages shall be varied at the very first stage so as the efficiency of the contractual liability system be improved (in terms of legal view point and more particularly in terms of economic point of view). Providing a set of certain and practical methods for valuation of damages, empowers the parties to measure the risks (and the scope thereof) and cover the same through the means such as insurance. Accordingly, the proposed techniques by the international instruments are so close to our dominant notions under Iranian (and Fiqhi) framework. Having done the same, the given approach in our system will become more consistent with the prevailing methods in Common Law (realization of “Expectation Basis” as the pioneer ways suggested by the classic division of Fuller and Perdue). 2) Concentration on the criminal feature of the liquidated damages assists us to guide the appetite of the legal system to Expectation and Reliance Basis as the real outcomes of the concept of damages while the Restitution Basis may be analyzed within the area of termination and the consequences thereof. 3) Insofar as we know, the law on adjustment of the contractual terms has a major impact on modern theories raised in this respect. However, even if the re-negotiation of the said terms enables the parties to achieve a sort of post efficiency, this kind of adjustment would certainly damage the former distribution of the contractual risks as considered by the parties in prior. So, in order to design an efficient scheme for the parties, we have to consider (inasmuch as viable) the nature of the given risks and the manner to cover the same. By the way, comparing the effects of such studies with the key notions of the Iranian legal system, the economic impacts of the relevant methods on a progressive economy such as Iran shall not be ignored. That is the reason we propose not to copy the ultra-modern theories such as “Incomplete Contracts” and “Efficient Breach” and focus on the “Expectation Basis”.
