Critical and analytical view of the procedural unity verdict no. 805, dated 1403/02/25 by Iran’s supreme court general assembly, focusing on legal doctrine, jurisprudential teachings, and judicial precedent, reveals the following conclusions:
One of the fundamental disagreements in the jurisprudence in recent years was to answer the question of whether in general representation, based on which the “representative has the authority to transfer the subject of the contract to anyone, even the representative himself at any price and under any condition he deems fit” the representative is obligated to consider the principal's best interest, or if representative, given the broad powers granted, has no duty to consider the principal's benefit. Supreme Court General Assembly by unity verdict no. 805, dated 1403/02/25 did not accept the opinion of the majority of judges in this regard, emphasized and expressed the need to respect the interests of the principal. In these terms: According to Article 307 of the Civil Law approved in 1307, it is prescribed to conduct a transaction in relation to another's property by the representative, on the other hand, according to Article 667 of the same code, the representative must respect the interest of the principal in his actions. Therefore, when a person represents another person to sell his property to any person, even the representative himself, it is assumed that the representative is acting in the best interest, and if the representative sells the original property at a low price, with reference to Article 1073 of civil code the transaction is invalid and the original can reject and void it. It is obvious that the issue of the verdict does not include the letters of representation before issuing the verdict. This opinion is acceptable because, in addition to the jurists of the Imami who have made the validity of the representation subject to the observance of the principal’s expediency, the implicit will of the parties and the principle of non-delegation and non-representation also confirm it.2. The criterion of non-observance of the principal's interest and the criterion of concluding a contract against his interest and the status of this transaction is one of the differences of opinion between legal doctrines and judicial practices. In this way, some judges and professors of civil rights considered only intentional rendering the transaction ineffective. But the verdict in question, following the opinion of the majority of Imami jurists and legal doctrine, without making a distinction between intentional or unintentional, granted the principal the right to request the court to declare the transaction void null and void. Therefore, what is important and the criterion is the non-observance of the principal's interest, not the representative's bad faith 3. Another challenge of the judicial procedure is whether it is possible to demand damages from the representative and if the answer is positive, how much it is. In this regard, some courts used the price stated in the document as a criterion, and others used the actual price of the subject matter of representation at the time of concluding the contract. Although the verdict has not been determined in this decision, without a doubt, the principal can claim damages, including the actual price, by referring to the note of Article 19 of the Criminal Procedure Law.4. Although apparently, the verdict violates the rights of third parties in good faith, the analysis of this verdict should be done in such a way that the rights of these people are not violated. One of the ways to respect the rights of third parties in good faith is to consider the official transfer of property to them as lost in law. The claim of the representative regarding the return of the property against third parties in good faith should not be accepted. Instead, the principal should be able to claim its equivalent from the representative or the third party with malintent especially when the property has changed significantly, considering that the law of Mandatory Registration of Real Property Transactions 1403 enacted by the Expediency Discernment Council has prescribed the loss in law (constructive loss) in several articles.