Document Type : Original Article
Authors
1 Department of Private Law, Faculty of Law, University of Qom, Qom, Iran
2 PhD graduated of University of Qom
Abstract
Contract termination is a severe remedy that terminates the legal life of the contract. Therefore, in most legal systems, it is used as the last resort against breach of contract. Accordingly, one of the conditions for application of this remedy is the severity of breach, which is referred to in different legal systems with similar titles such as "fundamental" or "material" breach, but a normal breach of contract can’t be a sufficient reason to terminate it.
In order to terminate the contract, in national legal systems and international trade law, various criteria have been devised to determine the severity of the breach. One of these criteria is "intentionality" of breach. In fact, intentional breach destroys the trust relationship between the parties and normally deprives the obligee from relying on contract performance. Therefore, contract governing law should entitle him to terminate the contractual relationship as one of the remedies.
However, studied legal systems' approaches are different in this regard. In some legal documents such as PECL, DCFR and PICC, deliberate breach has been explicitly considered as fundamental breach. In new France and Germany civil code, the concept of breach severity is not explained but these countries judicial precedent requires intentionality as one of the criteria. In common law, intentionality of the breach is a component in addition to other circumstances which may justify contract termination. In Iran's law severity of breach is not necessary for contract termination and as a result it doesn't matter whether the breach was intentional or not. Nevertheless, according to jurisprudential principles regarding contractual and non-contractual civil liability, it is possible to distinguish between intentional and unintentional breach of contract.
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