Purposes and Bases of Damages for Breach of Contract with Emphesis on Judicial Decisions

Damages for breach of contract may pursue one of the two purposes to place the injured party in a position that he expected to from performance of the contract, or to place him or her in a position that he was in before the contract was entered into. In some decisions of Iranian courts, the purpose of damages for breach of contract is to place the injured party in a position he would have after the performance of the contract, but to achieve this goal, various principles such as the principle of full compensation and legitimate reliance and expectation have been resorted. This article, after mentioning and categorizing some decisions, seeks to explain that resorting to these principles is not immune to criticism and the necessary mechanisms to invoke them have not yet been developed in our country. Instead, two traditional principles of etlaaf (direct destruction) and tasbib (indirect destruction), with some qualifications, could be used in this regard.