The Impact of the Reliance Theory on Compensation for Its Breach in Iranian Law and Common Law
Keywords:
reliance theory, compensation, breach of promise, obligation, liabilityAbstract
The reliance theory is considered a basis for civil liability that has not been extensively discussed or examined. The present article aims to investigate the impact of the reliance theory on compensation for its breach in Iranian law and common law. This study employs a descriptive-analytical method and utilizes library research to analyze the subject. The findings indicate that the impact of the reliance theory on compensation for its breach in common law should be sought in the legal doctrine of promissory estoppel. In essence, this theory, through promissory estoppel, has influenced compensation for damages resulting from reliance. According to promissory estoppel, when a person makes a promise, they are bound by it in relation to the party who accepts it. This obligation does not arise because the promisor has expressed a specific intent but because they have conveyed their intention in such a way that justifies the other party’s reliance on their actions and statements. In the reliance theory, what holds significance is the reliance of the promisee, not the promisor’s intent regarding their commitment. Therefore, while promissory estoppel is based on a promise, the reliance theory is grounded in an assumption of liability. In Iranian law, the most significant impact of the reliance theory can be observed in Article 336 of the Civil Code. According to this provision, even if a person has not explicitly promised to pay remuneration, they are nevertheless obligated to do so if customary practice dictates that such an act requires payment or if the performing party was prepared to carry out the work in expectation of compensation.
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