Punitive Damages in the Liability for Contract Violation in the Legal Systems of Iran and England
Seyed Pedram Khandani, Maryam Riazipour
The punitive damages are a type of non-repairable damages which occur due to the insolence and carelessness in the damaging behavior of the defendant, paid to the interest of plaintiff by the order of the court, to punish the defendant and prevent the repetition of similar actions by him and the other members of the society. The punitive damage in the civil lawsuits (including contract lawsuits and civil liability lawsuits) are issuable and the main basis for issuance of such a damage is the deterrence and punishment. The punitive nature of such a crime has led some to consider it as having a penal nature, so they oppose awarding of it for private lawsuits. On the contrary, some totally deny the penal nature of this damage and consider it to be a fully civil case. A contract-breaching behavior and existence of an element that justifies the punishment are the indicator of application and identification of the punitive damage, be it happening in the violation of a contractual commitment or as an action causing a constructive trust. The extent of the punitive damage is determined by the court based on the case’s conditions. There are controversies and clashes of ideas on the insurability of the punitive damages, however, it should be noted that insuring such a damage is to some extent incompatible with its objectives. The current study, through the use of the descriptive-analytical method, has aimed at answering the question of whether the punitive damages can be applied for contracts` domain or not? It has also dealt with the explanation of different kinds of contract violations and compensation of the damage inflicted by the contract violation.