Mostaffa i mohaghegh ahmadabadi; homayoon rezaeinejad
Abstract
When a debtor does not perform his monetary obligation، there is no doubt that the creditor should be compensated. Nevertheless, the main question is what type of compensation should be provided. While in some cases, parties agree to a certain amount for damage, in some other cases, the interest is ...
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When a debtor does not perform his monetary obligation، there is no doubt that the creditor should be compensated. Nevertheless, the main question is what type of compensation should be provided. While in some cases, parties agree to a certain amount for damage, in some other cases, the interest is defined as a legal interest by the law. Also in some occasions, damage is based on and limited to the inflation rate. The stipulated interest is qualified as usurious and is prohibited. The legal interest permits usurious agreements and hence, it has been abolished. Besides, inflation rate encounters with some problems, that is, it almost does not completely compensate the creditors. Thus, Iranian legal system and the jurisprudence have never achieved reasonable coherence in this case. In this article, the main question is about proper damages for late payment and it deals with question of whether domestic monetary depreciation will suffice. It seems that in the absence of legal interest, it is possible to apply the mechanism of judicial interest by which the full compensation will be fulfilled and the problem of usurious contracts could be avoided.
