A Comparative Study of the Purpose of Awarding Damages for Breach of Contract

Awarding damages is one of the usual remedies for breach of contract. Theoretically, awarding damages may seek one of the two purposes placing the injured party in the actual position before the conclusion of contract or in the hypothetical position after enforcement of the contract. The first purpose is referred to as protecting negative interest and the second as positive one. They are also called as reliance interest and expectation interest, respectively. Practically, there are various approaches regarding which of them should be seek by awarding damages in legal systems. According an approach, which could be attributed to Roman-Germanic and Common Law systems and International and European documents, awarding damages seeks to protect the injured party’s positive or expectation interest, where compensating lost gain is one of the most elements. As regards Iranian legal system, paying attention to the fact that lost gains could not be recovered, it may be thought that it seek to protect negative or reliance interest. Yet, in numerous situations, the purpose of damages is to protect the injured party’s positive or expectation interest. The article is a scientific research paper, prepared in an analytic method.