Rouhollah Rezaei; Ebrahim Abdipour Fard; Esmail Nematollahi
Abstract
Breach of contract may occur by the fault of party in breach. There is a variety of degrees in contractual fault and the highest degree of fault is intentional one. The breach of contract is considered to be intentional when the party in breach calculates the financial costs and benefits of the breach ...
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Breach of contract may occur by the fault of party in breach. There is a variety of degrees in contractual fault and the highest degree of fault is intentional one. The breach of contract is considered to be intentional when the party in breach calculates the financial costs and benefits of the breach and then decides not to perform his/her contractual obligations. The notion of intentional breach and its consequences are recognized in common law and civil law and also in some European instruments such as PECL and DCFR. The intentionality of breach is considered to be relevant in above jurisdictions and instruments. For example, in the case of intentional breach, common law courts allowed the specific performance. They sometimes refused to mitigate the amount of penalty clauses and to recognize the exemption clauses in favor of the breaching party. Also, in civil law jurisdictions the intentional breach works as an allowance for unforeseeable damages. The hypothesis of this contribution is that in the case of intentional breach, courts must take a stricter approach than the usual breach and they should seek to improve the position of the creditor in terms of accessing to contractual remedies.
