Feasibility of Disgorgement of Profits Resulted from Breach of Contract in Iranian Law by Studying English Law

Abstract

In Iranian Law, the general rule is that damages for breach of contract are compensatory. However, punitive and deterrent damages are also regulated in some cases. Regarding the damages resulted from the contract, the issue of compensating the damages caused to the other party is a definite matter, but if the party in breach receives profits due to the breach of the contract (even if it causes damages to the other party or not), the restitution and claim of these profits is an ambiguous matter in Iranian Law. Considering that one of the important reasons for the breach of contract and the filing of numerous court cases as a result is the profiteering breach of the contract, in this article, while explaining the concept and explanation of the doctrine that governs the profits resulting from the breach of contract, conditions have been considered that these profits can be returned so that by punishing the violator of the contract, the violations that are not caused by the usual commercial hardships but with the purpose of gaining profit can be prevented. Currently, in Iranian Law, there is no place for gain-based damages, but there is a capacity to accept it, and it can be applied with a combination of conditions, these conditions are: 1. the violation must be intentional, 2. there must be an important and essential relationship between breach of contract and profit and, 3. absence of penalty clause in the contract.

Keywords

• enjoyment
• punitive damages
• unjust enrichment
• breach of contract
• intentional breach