A Comparative Study of Absurd Penalty Clauses in Iran and France Law

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Mahmoudi Harandi Mostafa; Shariati Farani Saeed; Entezari Najafabadi Alireza

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Journal Paper

Paper Information

Journal: ENCYCLOPEDIA OF COMPARATIVE JURISPRUDENCE AND LAW Year:2023 | Volume:1 | Issue:2 Page(s): 17-33

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Title

A Comparative Study of Absurd Penalty Clauses in Iran and France Law

Author(s)

Mahmoudi Harandi Mostafa | Shariati Farani Saeed | Entezari Najafabadi Alireza | Issue Writer Certificate

Keywords

absurd

clause

France

penalty

Abstract

This study, using a descriptive-analytical method, conducts a comparative analysis of absurd (irrational) penalty clauses in Iranian and French law. Undoubtedly, rationality is a fundamental feature of all legal acts. Sometimes the acts and omissions of legally competent individuals are deemed, from a customary perspective, to lack a rational purpose, and are described by reasonable people as irrational or absurd. Absurdity is not exclusive to contracts of sale but also applies within the scope of commutative contracts, ancillary contractual conditions, and unilateral juridical acts. The inclusion of absurd conditions in contracts, such as a penalty clause where there is no rational or customary proportionality between the stipulated contractual damages and the actual damages, can be considered an example of absurd contractual clauses. In Iranian law, the legislature has made no reference to absurd conditions, and there is disagreement among jurists and legal scholars regarding their legal status. Some hold that such conditions are valid, while others consider them absolutely void. In French law, juridical acts deemed absurd in the sense recognized in Iranian law do not exist; however, Articles 1152, 1230, and 1231 of the French Civil Code and Clause 5 of Article 1231 of the French Law of Obligations address this type of clause and permit judicial control over penalty clauses, allowing the judge to increase or decrease the amount of an excessively high or unreasonably low penalty.

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