Stipulating the Option of Defect Despite Knowledge of the Defect: A New Approach to Balancing Contractual Power

Document Type : Original Article

Authors

1 PhD Graduate in Private Law, Razavi University of Islamic Sciences, Mashhad, Iran.

2 Department of Private Law, Islamic Azad University, Taybad Branch, Taybad, Iran.

Abstract

Iranian rules on defects and the option of defect contain limitations and conditions for exercising this right. One condition is that the defect exist at the time of the contract and be hidden; another is that the buyer be unaware of the defect at the time of sale. This raises the question whether stipulating the option of defect remains valid when the buyer already knows of the defect, and what effect such a stipulation has on the contract. Fiqhi texts reveal three views: both the condition and the contract are valid; both are invalid; or the stipulation is invalid while the contract remains valid. Through descriptive analysis, this study develops a comprehensive criterion. Given the complexity of modern goods and the inequality of bargaining power, a buyer may know that a defect exists yet be unable to predict its future impact on value or use. In such cases, stipulating the option of defect can moderate bargaining inequality and is consistent with distributive justice.

Keywords

References

 

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Studies of Islamic Jurisprudence and Basis of Law
Volume 19, Issue 52 - Serial Number 52
January 2025
Pages 121-149

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