A Comparative Analysis of the Role of Fault, Statutory Interest Rate, and Time of Claim in Late Payment Damages under Iranian, French, and English Legal Systems

Abstract

Late payment damages constitute one of the most significant financial remedies in monetary obligations and have long been a subject of debate across different legal systems. Divergences arise not only from their theoretical foundations but also from the conditions governing their realization, particularly regarding the role of fault, the determination of statutory interest rates, and the time from which damages become claimable. This article adopts a comparative approach to examine these three core elements within the legal systems of Iran, France, and England, aiming to identify their functional convergences and divergences. In Iranian law, late payment damages are shaped by specific statutory and jurisprudential constraints, including the requirement of a formal claim by the creditor and the establishment of unjustified delay by the debtor. These conditions have often led to interpretative ambiguity and inconsistent judicial practice. By contrast, French law relies on predetermined statutory interest rates and presumes the occurrence of damage upon delay, thereby offering a more predictable and streamlined framework. English law, focusing on the compensatory nature of interest for delay and assigning a limited role to fault, presents a flexible and economically efficient model. The central question addressed by this study is how differing conceptions of fault, statutory interest rates, and the timing of claims affect the realization and assessment of late payment damages, and what implications these differences hold for contractual justice and legal certainty. Using a descriptive–analytical and comparative methodology grounded in authoritative legal texts and judicial practice, the article demonstrates that the objective-oriented approaches of French and English law provide greater efficiency in compensating actual loss and reducing procedural complexity compared to the more restrictive Iranian framework. The findings offer a basis for reconsidering the interpretation and application of late payment damage rules in Iranian law, with a view toward greater alignment with comparative legal standards.