Fatemeh Rakideh
trainee lawyer at the Iranian Central Bar Association
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Claiming an agreed contractual penalty and contractual damages

Claiming an agreed contractual penalty and contractual damages

agreed contractual penalty The amount or measure of damages that the parties determine for a breach or delay in the contract. Its effect depends on the precise wording of the contract and the type of breach for which the performance guarantee is determined.

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Claiming an agreed contractual penalty and contractual damages

agreed contractual penalty The amount or measure of damages that the parties determine for a breach or delay in the contract. Its effect depends on the precise wording of the contract and the type of breach for which the performance guarantee is determined.

Practical point: The mere inclusion of agreed contractual penalty does not always mean the right to withdraw from the contract; it must be specified that the condition for delay, failure to perform the obligation or the right to withdraw from the contract is written.

Important points in contract review

Point 1

Full text of the contract, Related annexes and conditions

Point 2

Date of creation of the obligation, Deadline for execution and documents of its fulfillment or non-fulfillment

Point 3

Correspondence, Messages, Statements, Payment Receipts and Delivery Documents

Point 4

Guarantees, agreed contractual penalty, Termination clause or dispute resolution clause

Legal review of documents and disputes related to the claim contractual penalty and liquidated damages under Iranian law

Importance of a careful contract review

The legal title of the dispute must be selected based on the actual text of the contract and documents. The apparent similarity of two cases does not mean that their solution is the same; especially in matters such as termination,, invalidity, of the obligation to fulfill an obligation and claiming damages.

Related topics

Compelling performance of contractual obligations

Follow up on the implementation of an obligation that has become due and the obligor has refused to perform it.

damages for delayed contractual performance under Iranian law

Investigating the effects of delaying the commitment deadline, proving breach and guaranteeing contractual or legal performance.

termination or rescission of a valid contract under Iranian law

Reviewing the right to terminate, Options, Contractual terms, How to notify termination and its effects.

contractor–employer agreement and dispute under Iranian law

Subject matter, Status report, Delivery, Delay, Guarantee of good performance and disputes between the employer and the contractor.

  • Iranian Civil Code («قانون مدنی»)

  • Iranian Code of Civil Procedure («قانون آیین دادرسی دادگاه‌های عمومی و انقلاب در امور مدنی»)

This list, shows the main provisions related to the subject of the page. The governing law and subsequent amendments must be adapted to the time of occurrence, of the subject and the situation of each case.

The official text and latest amendments of the laws are available at National Information Database of Laws and Regulations of the Country is available to view.

Frequently asked questions

agreed contractual penalty The amount or measure of damages that the parties determine for a breach or delay in the performance of an obligation. To claim, The text of the condition, The type of breach, The deadline and other terms of the contract must be examined.
Sometimes agreed contractual penalty is imposed for delay and is called a late payment penalty in everyday language; but it can also be foreseen for failure to fulfill an obligation or other violation.
The answer depends on the typeagreed contractual penalty and the exact wording of the condition. agreed contractual penalty Delay may be recoverable by implementing the principle of obligation, but in the case of agreed contractual penalty failure to fulfill the obligation, the text and intention of the parties must be carefully examined.

Methods of contact

Contact us for advice and follow-up of the case through the following ways

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