Skip to content
Open access

A Jurisprudential and Comparative Analysis of Liquidated Damages Clauses and the Court’s Authority to Modify Them

2023 · The Encyclopedia of Comparative Jurisprudence and Law · 0 citations

Abstract

Liquidated damages clauses are among the most significant contractual mechanisms used to secure performance and predetermine the financial consequences of breach. These clauses play an important role in strengthening legal certainty, reducing contractual disputes, and simplifying the compensation process. Nevertheless, the inclusion of excessive or disproportionate amounts in some contracts has raised a fundamental legal question: should courts always enforce the amount agreed upon by the parties, or may they modify it under exceptional circumstances? This study adopts an analytical, jurisprudential, and comparative approach to examine the legitimacy of liquidated damages clauses and the scope of judicial intervention in modifying them. The findings demonstrate that, within Imami jurisprudence, the validity of such clauses is generally supported by principles such as the binding force of contractual stipulations, the necessity of fulfilling obligations, and respect for party autonomy. However, this validity is not absolute. Where the clause becomes an instrument of oppression, unjust enrichment, or disproportionate harm, jurisprudential principles such as the prohibition of harm, prevention of injustice, and contractual fairness may justify limiting or moderating its enforcement. The study further shows that although Article 230 of the Iranian Civil Code apparently restricts judicial authority to alter the agreed amount, a more flexible interpretation consistent with broader legal and jurisprudential principles may allow limited judicial intervention in cases of manifest disproportionality. Comparative analysis of French law, common-law systems, and international contractual instruments also indicates that modern legal systems increasingly seek to balance contractual autonomy with the need to prevent unfair and excessive contractual terms. The article ultimately concludes that recognizing a limited and regulated judicial authority to modify liquidated damages clauses can preserve contractual stability while preventing the enforcement of oppressive and inequitable provisions.

Read PDF

Similar papers

Open access Sep 2026

Developments in the Defect of Coercion in Civil Law (A Comparative Study)

: Contemporary economic and social developments, alongside evolving legal doctrines, have increasingly required limitations on the principle of freedom of contract. Legislative and judicial interventions now play a vital role in preserving the financial balance of agreements, particularly where unfair contractual terms...

Bakhtawar Aziz Hamad Amin, Hawazin Abdul Mohsen Abdullah · 0 citations
Open access Aug 2026

PROBLEMS OF ADMINISTRATIVE JUDICIAL PROCEEDINGS REGARDING FINANCIAL SANCTIONS DISPUTES

The article examines current theoretical and practical issues of administrative proceedings in cases involving challenges to financial sanctions. It considers the legal nature of financial sanctions, their place within the system of measures of legal liability, as well as their relationship with administrative coercive...

Adik Li · 0 citations
Review Open access Sep 2026

Legislative Omissions in Constitutional Jurisprudence: Ukrainian Practice in a Comparative View

Every legal system contains, to a greater or lesser extent, legal relationships that are not regulated. However, they ought to be regulated by general legal norms and, for this reason, they constitute gaps in the law. Owing to their importance and their connection with the principle of constitutionality, legislative om...

O. Shcherbanyuk, L. Bzova · 0 citations
Open access 2023

The Role of Contract Adjustment Clauses in Confronting Severe Economic Fluctuations

This article examines the status of adjustment clauses in Iranian law, focusing on the ability of contracts to respond to severe economic fluctuations, and seeks to clarify the relationship of this institution with traditional principles of contract law, Islamic jurisprudential foundations, and developments in comparat...

Davoud Ebadi · 0 citations
Review Open access 2023

Challenges of Default Judgments in Civil Proceedings within the Framework of Imamiyyah Jurisprudence and Iranian Law

The challenges associated with default judgments in Iranian civil proceedings, viewed through the dual lenses of Imamiyyah jurisprudence and statutory law, constitute a critical issue for ensuring judicial fairness and the protection of litigants’ rights. This article, focusing on Article 303 of the Iranian Civil Proce...

Saeed Abbasi, Abbas Moghaddari Amiri, Ali Rezvani · 0 citations
Open access Sep 2026

ENFORCEMENT OF THE OBLIGATION TO CONCLUDE THE MAIN CONTRACT: A DOGMATIC AND PRACTICAL ANALYSIS OF ARTICLE 327 OF THE CIVIL CODE OF GEORGIA

The preliminary contract is an important safeguard for the stability of private-law relations and commercial transactions in Georgian civil law. However, the ambiguity surrounding Article 327 of the Civil Code of Georgia (hereafter referred to as the CCG) gives rise to significant doctrinal and practical questions conc...

LInda Shalamberidze-Verdadze · 0 citations

We use cookies to run the site and, with your consent, for analytics and to show ads. See our Cookie Policy.