Compensation for Damages Arising from the Imposition of Extra-Contractual Obligations on Contractors: A Comparative Study in Iranian and English Law

Abstract

The present study aims to examine the legal foundations and mechanisms for compensating damages resulting from the imposition of extra-contractual obligations on contractors through a comparative analysis of Iranian and English law. The research adopts a descriptive–analytical methodology based on a review of library and documentary sources. Within this framework, the concept of extra-contractual obligations in contractual construction relationships and the theoretical foundations prohibiting the imposition of additional obligations on contractors are first examined. Subsequently, the legal bases for compensation in Iranian law are analyzed with emphasis on the general principles of contract law, civil liability, and the regulations governing the General Conditions of Contract. The study then investigates the legal and contractual mechanisms for compensating losses arising from contractual modifications under English law, including concepts such as contractual variations, constructive changes, and quantum meruit, while also considering the role of standard construction contracts in managing project changes. The findings indicate that both legal systems recognize the principle of compensating damages arising from the imposition of obligations beyond the contractual framework; however, significant differences exist regarding the legal foundations and the scope of recoverable damages. In Iranian law, compensation is primarily grounded in the general principles of contract law and civil liability, and recovery is generally limited to direct and provable losses. By contrast, English law, through its developed case law, specialized construction law doctrines, and standard-form contracts, has established more precise mechanisms for managing project changes and compensating contractors for additional costs. The results further demonstrate that one of the major challenges in Iranian law in this area is the absence of a coherent framework for identifying and managing practical changes occurring in construction projects, as well as the limited scope of recoverable damages. In this regard, the development of standard contractual models, the strengthening of specialized dispute resolution mechanisms, and the utilization of experiences from advanced legal systems may contribute to improving the legal framework governing compensation for damages in construction contracts.