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What is Mu'awadhi Daman? | Difference Between Mu'awadhi Daman and Darek Daman in Iranian Civil Law

In the intricate world of civil law, concepts like Mu'awadhi Daman and Darek Daman play a crucial role in balancing contracts and transactions. Rooted in Shia jurisprudence and Iran's Civil Code, these terms serve as mechanisms for compensating damages in deals. But what is Mu'awadhi Daman and what is the difference between Mu'awadhi Daman and Darek Daman? This comprehensive article delves into definitions, conditions, legal effects, practical examples, and references to provide a thorough answer. Whether you're a law student or involved in commercial transactions, this is essential reading.

The Importance of Daman in Iranian Civil Law

Iranian civil law is founded on Shia fiqh and rational principles. Daman refers to the obligation to pay money (typically the price or consideration) for damage caused to another. Under Article 384 of the Civil Code, daman can be contractual or tortious. Mu'awadhi Daman pertains to exchange contracts (e.g., sale, lease), while Darek Daman relates to unauthorized sales or post-contract defect discovery. Understanding these distinctions is vital for lawyers and traders to mitigate legal risks.

What is Mu'awadhi Daman?

Mu'awadhi Daman, or liability arising from exchange contracts, is the legal responsibility imposed on parties (e.g., seller in a sale) to return received consideration if the counterpart is not delivered. Simply put, if the sold item (mabi') is destroyed or lost before delivery to the buyer, the seller is liable and must refund the price (thaman).

Fiqh and Legal Basis of Mu'awadhi Daman

Fiqh Basis: Based on narrations from Imam Sadiq (AS) and opinions of scholars like Sheikh Ansari in "Makasib," the seller owns the mabi' until delivery and bears liability for its loss. This daman is inherent to the exchange contract, not purely tortious.

Legal Reference: Article 390 of the Civil Code: "If the mabi' is destroyed before delivery, the seller is liable unless the destruction is due to the buyer's act." Article 387 emphasizes that delivery effects ownership transfer.

Conditions for Mu'awadhi Daman

For Mu'awadhi Daman to apply:

A valid exchange contract (e.g., sale or barter) is concluded.

Consideration (thaman) is paid by the counterparty.

The mabi' is destroyed or lost before delivery.

Destruction is not attributable to the counterparty (e.g., buyer).

Legal Effects of Mu'awadhi Daman

Primary Obligation: Refund of thaman without proving fault.

No Additional Damages: Unlike Darek Daman, only the price is returned; no ancillary losses (e.g., lost profits).

Timeframe: Immediate upon destruction; buyer can rescind or claim thaman (Article 391, Civil Code).

What is Darek Daman?

Darek Daman (or liability for undisclosed defects) occurs when, after the transaction, it is revealed that the property is defective or belongs to a third party (unauthorized sale). Here, the seller must not only return the price but also compensate for defect-related damages. This daman is primarily tortious, aimed at remedying the "discovery" (darak) of the defect post-contract.

Fiqh and Legal Basis of Darek Daman

Fiqh Basis: Based on the hadith "The sale is between the exchangers until they separate" and Imam Khomeini's view in "Tahrir al-Wasilah," the seller is liable for hidden defects.

Legal Reference: Article 422, Civil Code: "In unauthorized sale, if the owner rejects the price, the seller is liable." Also, Articles 355-362 on the option of defect.

Conditions for Darek Daman

Contract concluded, but property is third-party owned or defective.

Defect discovered after delivery.

Buyer unaware of defect (gross deception).

Legal Effects of Darek Daman

Broad Obligation: Return thaman + compensate damages (e.g., repair costs or lost profits).

Options: Buyer can rescind or claim compensation (arsh) for defect.

Civil Liability: Seller may face fraud charges (Article 1, Law on Aggravated Punishment for Bribery and Embezzlement).

Difference Between Mu'awadhi Daman and Darek Daman

For clarity, key differences are compared in the table below:

These differences highlight that Mu'awadhi Daman is preventive, while Darek Daman is compensatory.

Practical Examples of Mu'awadhi Daman and Darek Daman

Mu'awadhi Daman Example: Mr. Rezaei sells a car for 500 million tomans and receives payment. Before delivery, the car is lost in a flood. Rezaei must refund 500 million, without extras.

Darek Daman Example: Ms. Ahmadi buys a house that later reveals hidden moisture in walls. She can reclaim the price + repair costs (arsh).

Conclusion: Practical Application in Everyday Transactions

Grasping Mu'awadhi Daman and Darek Daman can prevent legal disputes. In deals, always use written contracts with delivery and defect inspection clauses. Consult Us for advice. These concepts have deep fiqh roots and have been interpreted in Iran's Supreme Court.